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By Adewale Sanyaolu
Experts have called on the Federal Government to be cautious on its 2023 oil production projection that pegs daily output at 1.69 million barrels per day.
The call is coming on the back of ongoing massive oil theft and vandalisation of pipelines and other critical national assets that has tapered production to an oil time low.
President Muhammadu Buhari, while presenting his N20. 5 trillion 2023 Appropriation Bill to the joint session of the National Assembly on Friday, projected a 1.69 million barrels per day oil production(inclusive of condensates of 300,000 to 400,000 barrels per day).
Nigeria’s inability to meet its Organisation of Petroleum Exporting Countries (OPEC) production quota is seen as a national albatross that often brings government’s optimism to doubt.
This is worrisome given that for months running, Nigeria has failed to meet its production target, leading to loss of revenue.
OPEC and its allies, had increased Nigeria’s oil quota to 1.830 million barrels per day in September 2022, from 1.826 mb/d in August 2022.
But on October 5, 2022, OPEC slashed Nigeria’s oil output by 4.6 percent to 1.742 million barrels per day, excluding condensate, for November 2022 market, from 1.826 mb/d in August 2022.
According to OPEC’s recently released Monthly Oil Market Report for September, the country’s crude oil output fell to 900, 000 barrels per day (b/d) in August.
The report showed that Nigeria’s crude oil production (according to data reported by direct sources) dropped from 1 million b/d recorded in July, to 900, 000b/d in August.
Commenting on the 2023 oil production estimate, Chief Executive Officer Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the 2023 oil output benchmark of 1.69 million barrels per day is rather too optimistic given the dilemma of oil theft facing the country among other challenges.
He expressed concern that oil theft and vandalisation of oil production facilities have done enormous damage to the entire oil production ecosystem, saying it is a challenge that the oil companies have been grappling with for years, nothing that it is worrisome that it took this long for an effective response to happen.
The former Director General of Lagos Chamber of Commerce and Industry(LCCI), also said it will take sometime for oil production to be restored to normal levels.
According to him, many oil companies have exited the country while others have abandoned their onshore operations and moved offshore.
‘‘Sadly, the reality is that we are dealing with a criminality phenomenon that is already deeply entrenched. It will take time to restore normalcy in the production systems.”
For his part, Partner, Bloomfield Law Practice, Dr.Ayodele Oni, said the target is quite optimistic considering the current volumes, adding that being very optimistic, however, doesn’t mean it is not realistic.
‘‘It just means a lot needs to be done to ramp up production and eliminate or substantially reduce those things that have led many upstream companies to shut in or reduce production.
The country should continue its drive to reduce crude theft and the discovery of infrastructure for stealing crude and the involvement of host communities are steps in the right direction.
