Latest report by Meristem Research has projected an increase in Nigeria’s oil production in 2024 barring any significant, unexpected shock to the sector in the year.
The 2024 Annual Outlook entitled: ‘Setting Sail for Gradual Recovery’, lamented the persistent challenges, including pipeline vandalism, illegal oil bunkering that led to the Rumuekpe-Nkopu explosion, oil theft, and oil workers’ strike in 2023, noting that these factors led to the decline of the oil sector’s output in the first half of the year by 8.97 per cent year-on-year.
It, however, noted that in Q3:2023, the oil sector recorded a lesser contraction of 0.85 per cent compared to 22.67 per cent in Q3:2022. This comes on the heel of a surge in the average oil production by 18.17 per cent to 1.45 mbpd in Q3:2023, marking the sector’s most robust performance since Q2:2020.
It further stated: “Looking ahead into 2024, barring any significant unprecedented or unexpected shock to the sector, we expect oil production to be higher at 1.55mbpd (vs 1.46mbpd 2023), premised on several factors. We envision that Federal Government’s dedicated efforts to improve output will be crucial in enhancing oil production.
“Strategic initiatives, such as introducing the Nembe Oil grade to the global market, combined with intensified efforts to curb oil theft are poised to boost production significantly,” it stated.
Additionally, the report stated that noteworthy advancements in the oil and gas sector, such as Nigeria’s $533.00m memorandum of understanding with Saudi Arabia; the ongoing $2.80b Ajaokuta–Kaduna–Kano gas pipeline project by Oilserve Limited, and the commencement of operations at the Dangote Oil Refinery are anticipated to serve as critical drivers of progress in the country’s oil and gas sector in the medium to long term.
“Furthermore, we note that the Federal Government’s heightened focus on expanding the country’s natural gas production and utilisation (evidenced by various agreements signed with international companies and countries, including Indorama Eleme Petrochemicals Ltd and Germany) is likely to be instrumental in propelling the output for Nigeria’s oil and gas sector in 2024.
“Lastly, we project that the low base effect will also be reflected in the oil sector growth numbers, especially in the first half of 2024,” the report stated.
