Nigeria has consistently failed to meet oil production targets outlined in national budgets over the past decade, indicating challenges in the oil sector.
This is despite the enormous crude oil resources the West African country has underground.
Crude oil sales constitute approximately 90% of Nigeria’s foreign exchange earnings, making it crucial for economic stability.
Data from 2013 to 2023 reveals persistent shortfalls, ranging from 300,000 to 600,000 barrels per day. Various factors such as force majeure declarations, oil theft, and illegal bunkering contributed to these deficits, an investigation by Daily Trust showed.
The trend continued with projections versus actual production mismatches in subsequent years, leading to significant revenue losses.
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Issues with Nigeria’s petrochemical refineries, coupled with crude oil theft and pipeline vandalism, further exacerbate the challenges.
A recent report by the Nigerian National Petroleum Company Limited (NNPCL) highlighted 127 crude oil theft incidents in a single week.
In response to these challenges, experts suggest deploying Artificial Intelligence (AI) in pipeline surveillance to enhance security and prevent theft.
The Dangote Refinery’s full operationalization is expected to alleviate transportation challenges once products become available for nationwide distribution via trucks.
Addressing both production shortfalls and refining capacity is imperative for Nigeria to harness its oil wealth effectively and mitigate economic losses.
