Despite concerted efforts to boost crude oil production since the third quarter of 2022, Nigeria incurred a substantial loss of $13.5 billion due to its failure to meet its Organization of Petroleum Exporting Countries (OPEC) quota between January and October 2023, as estimated by THISDAY.
Although the OPEC allocation for the year remained at 1.74 million barrels per day, equating to about 522 million barrels over the 10 months, Nigeria fell short by 150.4 million barrels, resulting in an output of 371.6 million barrels. This production deficit, coupled with an average oil price of $90 per barrel, suggests a gross loss of $13.5 billion during the period.
The ongoing liquidity crisis in Nigeria’s foreign exchange market might have been alleviated if the country had produced its OPEC quota. In an attempt to address the situation, Nigeria has sought financial support from countries like Saudi Arabia and the United Arab Emirates, with negotiations for new loans and a debt-for-oil deal.
Despite recent promises to increase production and meet OPEC quotas, Nigeria’s output, while on an upward trend, remains below the set benchmark. Challenges such as oil theft, pipeline vandalism, and diminished investment in the oil and gas sector have impeded efforts to fulfill international obligations.
The Minister of Petroleum Resources, Senator Heineken Lokpobiri, emphasized the importance of gradually increasing production to reach 2 million barrels per day by the end of the year. While there has been a marginal increase in output, the use of alternative means to transport crude, bypassing problematic pipelines, has played a role in this uptick.