The plan by the Nigeran government to raise crude oil output to 2.062 million barrels daily could lead to a clash with the Organisation of Petroleum Exporting Countries (OPEC).
A report by Bloomberg claims that Nigeria recently came out of a prolonged production slump due to improved security conditions.
However, the boost in crude production has now placed the country in a challenging position as it faces the problem of balancing increased output with the organisationâs output restrictions.
Nigeria is under pressure to abide by the OPEC+ production limit, which analysts say has helped to keep global oil prices above $70 per barrel.
However, this recovery has now placed the government in a difficult position, as it faces the challenge of balancing increased output with OPECâs output restrictions.
Data from the Nigerian Upstream Petroleum Regulatory Commission says that Nigeriaâs crude oil production hit 1.48mbpd in December.
The figure represents a fraction below Nigeriaâs 1.5mbpd OPEC+ quota and a significant turnaround from a low of 1.1mbpd in 2022.
Before the resurgence, Nigeria failed to meet the crude oil output quota by OPEC all through 2022 and 2023
Punch reports that the improved security situation, buoyed by government efforts to attract investment, has changed the scenario.
Nigeria now expects output to reach 2mbpd, the highest in 10 years.
Nigeriaâs crude oil recovery was due to enhanced security initiatives put in place several years ago to deal with theft and vandalism, targeting the network of pipelines in the Niger Delta region.
Two years ago, security deteriorated to the extent that the Trans-Niger Pipeline carrying 180,000 barrels per day was illegally tapped in about 150 places, with producers only receiving a small percentage of the volumes pumped through the system.
The country has also gained significantly from security improvements as investment in the upstream sector improved drastically.
Angola was reportedly forced to exit OPEC in December 2023 after it rejected a tighter restriction on its output, whereas the United Arab Emirates (UAE) was granted a generous quota six months later due to increased output.
TimesNow.com.ng earlier reported that the Dangote Refinery retained 13% of Nigeriaâs crude oil exports and domestic supply in 2024.
A new report disclosed that the development increased Nigeriaâs domestic share of oil exports by 2% in 2023 and marginally cut its European exports.
Despite being a significant oil producer and net exporter, Nigeria imported 47,000 barrels daily of US oil in 2024, which experts describe as unusual for an oil-producing country.
Source: TimesNow.com.ng
