The continuous drop in Nigeria’s oil production is spelling serious doom and raising concerns among stakeholders over the 2024 budget, which relies heavily on crude oil revenue.
The Organisation of Petroleum Exporting Countries’ (OPEC) monthly data, yesterday, showed that the nation’s oil output, which fell in January to 1.419 million barrels per day, has further dropped to about 1.3 million barrels per day in February.
With the development, Nigeria recorded a production shortfall of about 400,000 barrels per day in January, with a monthly accumulated shortfall of 12.4 million and another 500,000 million barrels per day shortly, translating to 14.5 million barrels per day in February when compared with the 2024 budget benchmark of 1.78 million barrels per day.
These shortfalls, which translated to 26.9 million barrels in the last 60 days of January and February, would have earned the country’s oil industry about $2.1 billion if sold at the average oil price of $80 per barrel.
Last month, oil production dropped slightly to 1.419 million barrels per day against the 1.422 million barrels per day it was in December.
While the President is projecting to raise revenue from oil and gas which was N2.23 trillion in 2023 to N7.69 trillion in 2024, representing an increase of 344 per cent, relative to 2023, this can only be achieved if oil production moves to 1.78 million barrels per day against the current 1.419 million.
From 2022 to 2024, the country’s oil production has only seen an increase of 200,000 barrels per day, going by OPEC data. The production averaged 1.2 million in 2022, 1.3 million per day in 2023 and 1.3 million barrels per day in 2024.
In OPEC’s Monthly Oil Market Report (MOMR) for March, the country’s output slid to 1.32 million barrels per day in February 2024, from 1.42 mb/d in January 2024, representing a loss of 104, 000 barrels per day all through February.
Tinubu had last year sought approval of the Senate for a $8 billion loan as part of the 2022-2024 external borrowing plan, with an approval in December by the Senate, even as the government planned to borrow about N21 trillion in 2024.
Energy expert, Henry Adigun, noted that the poor performance of the nation’s oil production might increase borrowing, as revenue from the sector faces uncertainties.
Managing Partner at Kreston Pedabo, Ajibade Fashina, had said there might be concerns about the feasibility of oil outlook in the 2024 budget, especially considering the downward trend in oil prices.
He said the inability to diversify the economy from oil after many attempts remained worrisome, considering that over-reliance on the resource exposes the economy to volatility in global oil prices, as well as other risks such as geopolitical tensions and environmental concerns.
