The ongoing plan by the Federal Government to increase crude oil production to 2.062 million barrels per day could potentially lead to a confrontation with the Organisation of Petroleum Exporting Countries, a report by Bloomberg has projected.
The report also pointed out that Nigeria recently emerged from a prolonged output slump, thanks to improved security conditions.
However, this recovery has now placed the government in a difficult position, as it faces the challenge of balancing increased production with OPEC’s output restrictions.
Although the government needs the extra revenue from higher oil exports to improve badly stretched public finances, the country is also under pressure to adhere to OPEC+ production limits, which have helped keep global crude prices above $70 a barrel.
The PUNCH reports that crude output reached 1.48 million barrels per day last month, according to data from the Nigerian Upstream Petroleum Regulatory Commission.
This represents a fraction below the country’s 1.5 million barrel-a-day OPEC+ output quota, and a major turnaround from a low of 1.1 million barrels a day reached in 2022, when oil majors were selling assets and pipelines ran dry due to theft and vandalism.
Before then, Nigeria had failed to meet the crude oil production quota approved by OPEC throughout 2022 and 2023.
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