Nigeria’s Crude Oil Production Increases to 1.3 Million Barrels per Day in July 2024: OPEC’s Report vs. Government Claims

Nigeria’s crude oil production experienced a modest rise in July 2024, according to the latest data released by the Organisation of the Petroleum Exporting Countries (OPEC). The country’s average daily output reached 1.307 million barrels per day (mbpd), reflecting a slight improvement from the 1.27 mbpd recorded in June 2024. This increase, though modest, is crucial for Nigeria’s oil-dependent economy, as it grapples with ongoing challenges in the sector.

The figures released by OPEC stand in contrast to the more optimistic numbers cited by Nigerian officials, including President Bola Tinubu and the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe. Both officials have claimed that Nigeria’s oil production surged to 1.6 mbpd in July, a figure significantly higher than OPEC’s reported output.

In his August 4, 2024, nationwide broadcast, President Tinubu praised what he described as a resurgence in Nigeria’s oil and gas sector, attributing the alleged increase in production to reforms implemented by his administration since taking office in May 2023. “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act,” Tinubu stated. “Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve.”

Similarly, NUPRC’s Gbenga Komolafe cited a daily production figure of 1.61 mbpd as of July 23, 2024, during a public statement on July 26. These assertions have sparked debate, especially in light of OPEC’s more conservative data, which suggests that Nigeria’s oil production remains far below the government’s reported figures.

The discrepancy between the Nigerian government’s reported production figures and those provided by OPEC highlights the challenges the country faces in accurately reporting and managing its oil production. Critics argue that this gap underscores the need for greater transparency and reliability in the country’s energy sector, which is critical to its economy.

OPEC’s Monthly Oil Market Report for August 2024 indicates that Nigeria added an average of 30,000 barrels per day to its production, bringing the output from 1.27 mbpd in June to 1.307 mbpd in July. The report, based on direct communication with Nigerian authorities, also estimates Nigeria’s daily crude production at 1.38 mbpd in July, according to secondary sources.

These figures, while showing a slight increase, fall short of the government’s ambitious targets and highlight the ongoing challenges within the Nigerian oil industry. Issues such as oil theft, pipeline vandalism, and fluctuating global oil prices continue to hinder the country’s ability to reach its full production potential.

Despite the challenges, the Nigerian government remains committed to boosting oil production. Speaking at a recent meeting with maritime stakeholders, Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC), reiterated the government’s goal of increasing oil production to two million barrels per day by the end of 2024. He emphasized the importance of continued collaboration with security agencies to combat oil theft and pipeline sabotage, which have been significant obstacles to achieving higher production levels.

“The target is to increase production to two million barrels by the end of the year, and we are fully committed to doing that,” Kyari said. “I appreciate the support of the Nigerian Navy in making this possible. Pipeline vandalism has also decreased significantly, and there is a lot currently happening in the industry.”

The oil and gas sector remains a cornerstone of Nigeria’s economy, accounting for a significant portion of the country’s revenue and foreign exchange earnings. As such, any fluctuations in oil production have a direct impact on the nation’s economic health. The slight increase in production reported by OPEC is a positive sign, but it also highlights the need for continued efforts to address the structural challenges facing the industry.

The discrepancy between government-reported figures and those from OPEC could also affect investor confidence in Nigeria’s oil sector. Transparency and accuracy in reporting are essential for attracting foreign investment and ensuring that Nigeria remains a competitive player in the global oil market.

As Nigeria continues its efforts to boost oil production, the focus must remain on implementing effective reforms and ensuring accurate and transparent reporting of production figures. The government’s ambitious targets will require not only significant investments in infrastructure and security but also a commitment to addressing the underlying issues that have plagued the sector for years.

In the coming months, all eyes will be on Nigeria’s ability to close the gap between its reported production figures and the realities on the ground. Achieving the target of two million barrels per day by the end of 2024 will be a significant milestone for the country, but it will require coordinated efforts across all levels of the oil and gas industry.

Nigeria’s slight increase in crude oil production in July 2024, as reported by OPEC, provides a glimpse of progress in the nation’s oil sector. However, the discrepancies between government claims and OPEC’s data highlight the ongoing challenges and the need for greater transparency in reporting. As the government works towards its ambitious production targets, ensuring accurate data and addressing the sector’s structural issues will be crucial for sustained growth and stability in Nigeria’s oil industry.