June 18, 2024
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OIL & GAS RENEWABLE ENERGY

Nigeria Sets Ambitious Target of 2.6 Million Barrels Per Day Oil Production by 2026

Nigeria’s upstream oil regulator declared a bold objective on Monday, outlining plans to achieve an annual oil and condensates production of 2.6 million barrels per day (bpd) by 2026. This represents a significant increase from the 2023 production levels of around 1.6 million bpd. As Africa’s largest oil exporter, Nigeria has faced challenges such as crude theft, pipeline vandalism in the Niger Delta, and inadequate investment, resulting in declining production and impacting government revenue.

President Bola Tinubu’s administration asserts that major oil companies, including TotalEnergies, Shell, and Exxon Mobil, have committed to investing $13.5 billion in the short term following discussions with senior executives. In its 2024-2026 action plan, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) outlined strategies to direct oil asset development to areas less susceptible to theft and vandalism. The plan also emphasizes providing regulatory support for alternative crude oil evacuation routes, for which oil firms require NUPRC approval, according to Reuters.

The NUPRC envisions oil production rising from 1.8 million bpd in the current year to 2.6 million bpd in 2026. However, two of the three consultancies appointed by OPEC+ to verify Nigeria’s output expressed doubts in November about the country meeting its production target for this year.

To achieve these goals, the NUPRC is actively working to reduce the cost of oil production to about $20 per barrel, down from the current range of $25 to $40. The regulator plans to implement incentives for oil producers, establish a framework for standardized crude oil and gas transportation costs, and introduce an open-access regime for upstream oil and gas pipelines and related facilities.

Additionally, the NUPRC aims to attract more investment and boost oil production by reducing high signature bonuses—one-off fees paid to secure exploration blocks. This strategic move aligns with broader efforts to revitalize the Nigerian oil sector and enhance its competitiveness in the global market.

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