Nigeria Advances Towards Meeting 2024 Oil Budget Benchmark, Misses Target by 210,000bpd

Emmanuel Addeh in Abuja

Although the country in August produced its second highest crude oil volume since January, it is still missing the 2024 budget benchmark of 1.78 million barrels per day by as much as 210,000 bpd, a THISDAY analysis of available data has revealed.

Latest information from the Nigerian Upstream Petroleum Regulatory Company (NUPRC) indicated that the combination of crude oil and condensates output by Nigeria reached 1.57 million bpd during the month under review.

At a point in the past, the gulf between expected and actual production was up to 700,000 bpd when outputs fell to as low as 1 million bpd.

However, condensates, which accounted for 218,993 bpd in August as against the actual oil production of 1.35 million bpd are outside the monthly calculation of the Organisation of Petroleum Exporting Countries (OPEC).

 Nigeria has consistently failed to meet its oil production target for the 2024 budget as well as the OPEC quota of 1.58 million bpd, but in August it made progress towards the mark, with the 1.57 million bpd, even though it continued to lag.

In a draft document, tagged: “Accelerated Stabilisation and Advancement Plan (ASAP),” last June, the federal government said its ability to achieve the 2024 budgeted revenue step-up of 77.4 per cent from 2023 was at risk if oil production remained 27.0 per cent below budgetary provisions.

“Our ability to achieve the 2024 Budgeted revenue step-up of 77.4 per cent from 2023 actual is at risk should oil production remain 27.0 per cent below budget. Fifty per cent of the annualised year-to-date variance suggests a lower-than-budgeted revenue of N15.7 trillion at the current run rate,” it said.

It added that the oil production, which it put at 1.4 million bpd compared to the 1.78 million bpd budget assumption and the OPEC quota of 1.58 million bpd, resulting in federal government revenue shortfalls.

Overall, it explained that the oil sector, as the fiscal anchor for the Nigerian economy, has underperformed due to years of underinvestment, inefficiency and opacity, leading to lost revenues and jobs and a grossly underserved local energy market.

However, with the significant improvement from 1.4 million bpd to 1.57 million bpd since that time, a rise in production by about 170,000 bpd, the government may soon need to heave a sigh of relief even though it also continues to have a deficit between actual dollar budget of $77/barrel to the current circa $70 to $72 per barrel.

According to the NUPRC data, Nigeria produced oil and condensates of 1.643 million in January, the highest this year; 1.539 million bpd in February; 1.438 million bpd in March; 1.447 million barrels in April and 1.468 million bpd in May.

In June, Nigeria produced a total oil of 1.5 million bpd oil and condensates; 1.533 million bpd and 1.57 million bpd.

In all, 50.9 million barrels were produced in January; 44.6 million in February; 44.5 million in March; 43.4 million in April; 45.5 million in May; 45.0 in June; 47.5 million in July and 48.6 million in August.

Most of the production for the month of August came from the Bonny Terminal with 5.4 million barrels; Brass which had 897,737 barrels; Qua Iboe with 3 million; Forcados which produced 9 million barrels; Excravos produced 4.2 million barrels, while output from Odudu was 2.58 million.

The country’s low production has been attributed to massive crude oil theft in Nigeria’s oil-rich Niger Delta, ageing oil fields, poor crude oil terminal maintenance, shutdowns, and reduced investments in the upstream oil and gas sector.

The federal government has said it is sustaining efforts to reinforce pipeline surveillance and clamp down on oil theft.

Earlier this month, the Minister of State, Petroleum (Oil), Senator Heineken Lokpobiri, stated that the latest upstream deal in Nigeria’s oil sector was expected to help boost crude production in the country to 2 million bpd by the end of 2024.

“I will ensure that I do everything humanly possible to create the best environment for Oando and other companies operating in the Niger Delta region to increase production, which we seriously need now.

“Our target is to hit at least two million barrels production by December,’’ the minister added during a visit to his office a team from Oando.

Also, the Nigerian National Petroleum Company (NNPC) declared a state of emergency on production in Nigeria’s oil and gas industry as Africa’s largest oil producer struggles to boost output.