The Organization of Petroleum Exporting Countries (OPEC) has reported a further decline in Nigeria’s average daily crude oil production for the month of March, signalling challenges for the nation’s crucial oil sector.
According to OPEC data obtained through direct communication, Nigeria’s average daily production fell to 1.2 million barrels in March, down from 1.3 million barrels recorded in February.
The decrease in production has raised concerns about Nigeria’s revenue outlook, with Isaac Botti, an industry observer, expressing alarm over the significant drop in expected revenue. Botti highlighted the reliance on oil revenues and emphasized the urgent need to diversify the country’s income sources to mitigate economic vulnerabilities.
Nigeria’s government had set a target of achieving a daily production of 1.7 million barrels, including condensate, in 2024. However, persistent challenges such as pipeline vandalism and theft have hampered efforts to meet this target.
Given the heavy reliance on crude oil sales to fund its budget, Nigeria faces mounting pressure to address the underlying issues affecting production levels. Botti called for a reevaluation of the country’s economic priorities, urging a return to sectors like manufacturing and agriculture, which have historically been pillars of the Nigerian economy.
In response to the production challenges, Minister of State for Petroleum Resources, Heineken Lokpobiri, attributed the low output in the first quarter of the year to issues with the Trans-Niger pipeline, a critical infrastructure component for oil transportation in the country, as well as maintenance activities undertaken by oil companies.
Lokpobiri assured stakeholders of swift measures to address the production setbacks and restore output levels. However, the ongoing volatility in Nigeria’s oil sector underscores the need for sustained efforts to address infrastructure vulnerabilities and diversify the economy to reduce dependence on oil revenues.
As Nigeria grapples with fluctuating oil production and revenue uncertainties, stakeholders are urged to prioritize long-term solutions to promote economic resilience and sustainable growth beyond the oil sector.