Nigeria Can Hit 3mbpd of Crude Supply, Says Babalola

Last updated: 2023/02/19 at 7:08 AM

Staff Admin 2 years ago

By Goddy Ofulue

A retired Deputy Director of the now-defunct Department of Petroleum Resources, Sunday Adebayo Babalola, has said that Nigeria can surpass its quota from the Organisation of Petroleum Exporting Countries and its allies (OPEC+) with the right environment.

He specifically said Nigeria can produce or supply three million barrels of crude oil per day, if it harnesses its crude resources, operate within the right environment and address oil theft, insecurity and vandalism of pipelines and other oil installations.

He also said that Nigeria was losing a lot of revenue by not meeting its OPEC+ quota, calling on the Federal Government (FG) to intensify the fight against oil theft and vandalism. He added that the government should activate and energise all necessary mechanisms and strategies to address the menace.

“Though Nigeria’s oil production has increased, the country is yet to meet its oil supply quota by the OPEC, which is 1.84 million barrels per day (mbpd).

“Nigeria’s crude oil production figure in January 2022 was 1.39 million bpd, which was the highest in the year. However, oil production decreased to 1.25 million bpd, in February; 1.24 million bpd in March; 1.22 million bpd, in April; and 1.02 million bpd in May.

“Oil production rose to 1.15 million bpd in June but declined to 1.08 million bpd in July. In August, production supply was at an all-time low of 972,394 bpd. It further dimmed to 937,766 bpd in September. In October, 1.014,485mbpd; Nov, 1.186mbpd; and December, 1.235mbpd.

Babalola said: “I am happy that Nigeria’s crude production is rising above one million bpd. It should get better by the day because we are losing so much money with Nigeria not meeting its quota by the OPEC. We are losing much money and the oil companies are losing much money.

“When I was in the DPR, I called it deferred revenue, but whichever way you look at it, whether it is lost revenue or deferred revenue, there is no money to lose. Now, if our productions are improving and Nigeria earns those revenues, it will be a good development, which can translate to the provision of infrastructure and good welfare for the people and improved living standards.

“We can reach three million barrels per day. Now if our production is improving and we have the facilities to reach almost three million barrels per day and we have the OPEC go-ahead, the more we produced, the better for the economy of this country. It is a positive development that we are improving our production.

“To reach it, we need to overcome the current challenges. We need to make security very good so that people will not tamper with the pipelines or the flow lines.

He said that there are many causes of the crisis, which include comatose refineries, and the fallen value of the Naira to the Dollar.

He said that though there are fears that the price of petrol will skyrocket after deregulation, it would later stabilise as was the case in the telephone sub-sector.

Babalola said: “We will continue to have this situation of petrol crisis until we deregulate. We have to recognise that the pricing is not the same as the scarcity. If you have your money and you cannot see it to buy, think about it. The government has to implement deregulation of the downstream sector. If we do not do that, and if the market is not a willing buyer, and a willing seller kind of a thing, which is a free market, we will continue to have this same problem that we are having currently.”

Source: The Guardian