With substantial improvement in security against oil theft, Nigeria has gradually opened the path to improved revenue as exemplified recently by crude oil production that increased by 400,000 barrels per day within a period of five months.
According to the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s crude oil production, which was 1.2mbpd in February increased by 500,000 bpd to 1.6mbpd in June.
The increase was attributed to check in oil theft by the Chief of Naval Staff, Emmanuel Ikechukwu Ogalla. He described the feat as substantial, considering that using direct communication, according to the Monthly Oil Market Report of the Organisation of Petroleum Exporting Countries, Nigeria’s oil production was 1.327mbpd in December, 2023; 1.427mbpd in January, 2024; 1.322mbpd in February; 1.231mbpd in March, 1.281mbpd in April, 1.251mbpd in May and 1.276mbpd in June.
The Navy chief added that the force has blocked channels for the sale of illegally refined petroleum products. Ogalla said: “We have stepped up surveillance and enforcement in the oil producing areas.
“Right now, as we speak, the Nigerian Navy has 12 vessels on the sea to protect oil production and stem oil theft. We have arrested over 16 vessels, so far.” Ogalla said the force has blocked channels for the sale of illegally refined petroleum products.
Recall that President Bola Tinubu during his nationwide address on the #EndBadGovernance protest has said that the nation’s oil production had risen to N1.6mbpd.
He said: “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act.
Last month, we increased our oil production to 1.61million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
“We are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for, and subsidise its use. “To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down.
This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80 per cent of the imported PMS (fuel) and AGO (diesel).”
Reacting to the development, an oil and gas governance consultant, Mr. Ademola Adigun, said that the increase would boost revenue earning for the government to address its duties and obligations.
He also said that it would increase the availability of crude for Dangote refinery and other domestic refineries. Adigun, who is the Chief Executive Officer, AHA Consultancies, in an interview with New Telegraph over the weekend, also called for the sustenance and even intensification of the resultoriented strategies that have led to the growth of the nation’s oil output.
While identifying more strategies, he also advised security agencies to combine kinetic with non-kinetic approaches so as to ensure more efficiency.
Adigun said: “The increase of Nigeria’s crude oil production is a good development. The increased oil output will lead to more sales and more revenues. That for us is proof of more oil in the market. But it is a good thing.
That means their (government) efforts are working. It means that the government will have more revenue to address its governance obligations. It will also ensure more oil for Dangote refinery and other domestic refineries.
It is a positive move for Nigeria. “The government should sustain its strategies, it should keep addressing oil theft, ensure more licenses are given out for oil exploration and ensure that we make our environment competitive enough to bring more investments.
“It is also important to continue to address host communities’ concerns to avoid restiveness. The Petroleum Industry Act (PIA) has a lot of strategies to address restiveness by host communities.
Those strategies should continue to be addressed. Host communities should continue to get the focus of the benefits by allowing oil to be produced and ensuring that there is growth in production to benefit their communities. So those strategies in the PIA should be continued.”
He added: “You cannot bring more investments unless your environment is enabling and good. Also your fiscals should be good and you can ensure that there is safety. So the main thing you have to do to allow investment to come is to settle all outstanding issues and divestments.
You should ensure that your fiscals are competitive which we already have. Finally you should reduce restiveness in host communities. “For security agencies, they should combine war with education and engagement.
War alone will not solve the problem.it should be a mix of war, engagement and education.” Recall that President Bola Tinubu during his nationwide address on the #EndBadGovernance protest had said that the nation’s oil production has risen to N1.6mbpd.
He said: “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act.
Last month, we increased our oil production to 1.61million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
“We are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for, and subsidise its use.” The 1.6mbpd oil out of the country is an impressive development given that oil production by Nigeria had been below the target.