How Nigeria can ramp up oil production
Data from the Nigerian Upstream Petroleum Regulatory Commission shows the country produced 159.15 million barrels of crude oil in the first four months of this year. Meanwhile, Nigeria is wooing investors from the United Arab Emirates for a new oil exploration deal. Oyeyemi Oke, Partner at A02 Law joins CNBC Africa to discuss these and more.
Thu, 23 May 2024 14:20:58 GMT
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AI Generated Summary
- Discrepancy in oil production figures between NUPRC and NNPC raises concerns about data accuracy and budget projections.
- Security challenges and oil theft continue to impact oil production in Nigeria.
- Attracting investments to Nigeria's oil industry requires addressing security concerns and providing attractive fiscal incentives.
Nigeria's oil production has been a subject of contention with conflicting figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian National Petroleum Corporation (NNPC). While the NUPRC reports that Nigeria produced about 1.28 million barrels per day of oil in the first four months of this year, the NNPC puts the figure closer to 1.7 million barrels per day. This disparity raises concerns about the accuracy of the data and its implications for the country's budget projections and benchmark for fiscal authorities. Oyeyemi Oke, Partner at A02 Law, suggests erring on the side of caution by relying on the regulator's figures due to its regulatory oversight and broader data access, even though it falls short of the country's target of 1.7 million barrels per day. The issue of oil theft in the oil-producing areas remains a challenge, with reports of sabotage points, illegal refineries, and theft continuing to plague the industry. Security concerns pose a significant threat, leading to disruptions in production and necessitating alternative transportation methods like barging and trucking to maintain operations. In a bid to attract investments, Nigerian authorities are courting investors from the United Arab Emirates to the oil industry. However, competition for investment funds is fierce, with investors weighing various risks, including security challenges and fiscal incentives. The recent example of Total Energies committing a $6 billion investment to Angola highlights the importance of addressing security and fiscal concerns to retain investor interest in Nigeria's oil and gas sector. Addressing these challenges is crucial to not only attract investments but also to ensure the sustainability and growth of Nigeria's oil industry.
