Brent, the global benchmark for crude oil, witnessed a rise in price in the past three days, crossing $84/barrel on Friday, after trading for an average of $80/barrel in the past weeks.
Its price rise came at a time the Nigerian government announced a new crude oil production target of 2.5 million barrels per day, a development that would really grow the foreign exchange fortunes of the country if met.
Nigeria’s oil output rose by 91,476 barrels per day to hit 1,426,574 barrels daily in January 2024, when compared to the production figure of 1,335,098bpd in December 2023, according to latest data from the Nigeria Upstream Petroleum Regulatory Commission, an agency of the Federal Government.
Figures from the NUPRC showed that with the addition of condensate, Nigeria’s oil production rose to 1.64 million barrels per day in January 2024, up from the 1.55 million barrels per day recorded in December 2023.
Global oil price data seen on Friday showed that the cost of a barrel of Brent as at 5.38pm Nigerian time was $84.14. The commodity increased in price by $2.23, representing 2.72 per cent when compared to its cost the preceding day.
It was also observed that other oil grades, for instance the WTI crude and Murban crude appreciated in price, as they were traded at $80.74 and $84.07 respectively on Friday evening.
They also appreciated in price, with WTI crude gaining $2.48, representing 3.17 per cent increase from the previous day’s price, and Murban crude appreciating by $1.85, representing 2.25 per cent increase when compared to its cost on Thursday.
The rise in crude oil prices occurred when the government revealed through the NUPRC that Nigeria’s oil production target was now 2.5 million barrels per day.
This is contained in a document on Nigeria’s oil sector obtained from the NUPRC in Abuja on Friday, where the Chief Executive of the commission, Gbenga Komolafe, also pointed out that Nigeria holds significant oil and gas reserves in Africa.
He said, “The commission has been working assiduously to ensure that the Petroleum Industry Act is effectively implemented for growth in oil and gas reserves as well as achieving the national average daily production target set at 2.5 million barrels of oil and condensate per day in the near term.
“The oil and gas reserves in Nigeria represents 30 per cent and 34 per cent of the African oil and gas reserves respectively. Our vast reserves hold immense potential for sustainable development and prosperity.
“Although the actual national production currently averages 1.33 million barrels of oil per day and 256, 000 barrels of condensate per day, the national technical production potential currently stands at 2.26 million bpd while the current OPEC quota is 1.5 million bpd.”
He noted that closing the gap between the actual oil production and the technical potential presents a window of investment opportunities for investors and a significant opportunity for Nigeria to unlock additional revenue streams, address the current foreign exchange gap and strengthen economic resilience.
Komolafe stated that aside from hydrocarbon resources, Nigeria is blessed with potentials for green and blue hydrogen, solar, wind, biomass and critical minerals for development of clean energy technologies as well as growing population predominated by young people.
“With a coastline along the Gulf of Guinea, market size of more than 200 million people projected to reach between 390 million and 440 million people in 2050, Nigeria represents hope for Africa.
“Interestingly, about 70 per cent of the Nigerian population are under 30, and 42 per cent are under the age of 15, representing a huge economic asset. Indeed, Nigeria’s potentials are derived from its human, natural and material resources which must be mobilised to propel her on a path of economic growth and development and for her sustainable energy future,” the NUPRC’s boss stated.
Recall that the Federal Government recently declared to Western nations in Europe and America that Nigeria would not stop the exploration of fossil fuels despite the pressure being mounted by the West for the discontinuation of investments in fossils.
It also stated that some of the countries in Europe and America had been investing in fossils but were asking Africa to stop further exploration of crude oil on the continent.
The Minister of State for Petroleum Resources, Heineken Lokpobiri, who disclosed this at a summit in Abuja on Tuesday, had also revealed that the Federal Government was working hard to halt the complete divestment of International OIl companies out of Nigeria.
He said, “I was in Davos in January and I was privileged to participate in several panels and everybody was talking about the abandonment of fossil fuels, and that people should not invest in fossil fuels. And I ask one American diplomat by saying look, why don’t you start with America?
“America is the highest producer of oil, they are ramping up production but they are asking us to stop. Remember that last year, the United Kingdom, under the present prime minister, gave about 100 licences for oil exploration.
“This means that the West is not slowing down in exploration, but we are being asked to slow down or stop investments in fossil fuel. I’ve always told them that we are not the problem, we are the victims and we will transit at our own pace.”
The minister also urged stakeholders to support the Federal Government in its drive to develop Nigeria’s oil and gas sector, so as to adequately harness the benefits from the natural resources for the betterment of Nigerians.
