info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
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Nigeria, the largest oil producer in Africa, is implementing an ambitious plan to double its oil production by 2025 with the goal of increasing oil production by 4 million bpd in six years.
OPEC member Nigeria currently pumps around 2.2 million bpd in crude oil and condensate. In March, Nigeria's crude oil production stood at 1.733 million bpd, up by 11,000 bpd from February.
Although the number of militant attacks on oil infrastructure in Africa's biggest producer has been down over the past two years, oil theft from pipelines is still plaguing facilities and leading to leaks that often force operators to shut down export pipelines for days and weeks, resulting in reduced Nigerian oil exports—and reduced oil income for the government.
The oil and gas sector accounts for about 10 percent of Nigeria's gross domestic product (GDP), while petroleum export revenues make up nearly 83 percent of the country's total export revenue.
The revived plan to double oil production in six years may sound great, but according to analysts, the goal is overly ambitious and Nigeria will have a hard time achieving it, also because of security concerns. Those security concerns and the continuous oil theft and resulting oil spills in the Niger Delta have been affecting the operations of oil supermajors like Shell and Exxon. The lingering concern about security is not helping the investment climate in the upstream sector in Nigeria.
Therefore, the 4-million-bpd production target could be way too optimistic.
Nigeria is working with the private sector to add another 450,000 bpd of refining capacity in order to fill in the domestic demand-supply gap.
Nigeria is also looking to OPEC's largest producer Saudi Arabia to secure potential investments in its downstream sector. This past weekend, Nigeria's Oil Minister Emmanuel Ibe Kachikwu met with Saudi Energy Minister Khalid al-Falih and said that the top Saudi oil official had expressed "the strong readiness of the Kingdom of Saudi Arabia to sign a definite and high value Memorandum of Understanding (MoU) with Nigeria for oil sector development."
