The Federal Government has announced that about $22.82 billion is expected to be invested in 1,068 oil and gas projects approved between 2022 and 2023.
These projects, which span across the nation, mark a pivotal moment for the sector, promising substantial economic benefits and enhanced production capabilities.
This announcement was made during a panel session at the 7th Nigeria International Energy Summit in Abuja, where the spotlight was on Nigeria’s journey to maximising its oil production potential.
Recommended reading: What to expect from the Oil and Gas sector in 2024
Nigeria’s 2.26 million BPD potential
The Chief Executive Officer of Nigeria Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, noted the nation’s technical capability to produce 2.26 million barrels of crude oil per day.
Komolafe shared insights into Nigeria’s strategy to align closer to the oil production quota set by the Organisation of Petroleum Exporting Countries (OPEC), emphasising the country’s ongoing efforts and the significant progress made in the oil sector.
Noting the achievements so far, Komolafe said:
- A total of 51 Field Development Plans (were) approved in the year 2022 – 2023, expected to attract a total $17.64 billion investment inflow as well as deliver cumulative oil recovery and gas recovery estimated at 2.12 billion barrels and 13.13 trillion cubic feet respectively in the next five years.
- “A total of circa $2.5 billion investment in 175 wells drilling in the year 2022 – 2023. A total of $2.68 billion investment in 842 well workovers and other well intervention activities in the year 2022 – 2023 resulting in increased average oil production.
- “275% growth in rig count from just eight in 2021 to average of 30 in the past one year. Early first oil achieved in recently streamed fields through accelerated FDPs.
- “Some of the fields include: Ikike (Total), Efe field (Newcross), Utapate, (NEPL), Akubo Field (SEEPCo), Oyo (General Hydrocarbon) and several others streamed under Extended Well Tests including Ethiope, Omefejo, Ofa, Olure, Ibom, Apani, Kalaekule, etc.”
Komolafe pointed out the current gap between Nigeria’s actual oil production, averaging 1.33 million barrels per day, and its technical potential. He identified this as a golden opportunity for investors to tap into, offering a chance to bolster the nation’s revenue, bridge the foreign exchange gap, and enhance economic resilience.
He added:
- “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 her economic resilience. So, there is opportunity in every disability.”
Komolafe also said the commission is intensifying efforts to collaborate with the International Oil Companies to ensure faster maturation and development of some high volume deep offshore assets.
More Insights
- The Nigerian oil industry, integral to the nation’s economic framework, is currently navigating through a myriad of challenges. These issues have sparked widespread discussions and necessitated decisive actions on both the domestic and international fronts. Despite these hurdles, the Federal Government is actively implementing strategies to overcome obstacles and propel the sector forward.
- In anticipation of a much-improved oil sector, the Federal Government plans to achieve a 214% surge in Petroleum Profit Tax (PPT) collections in 2024.
- Data from the Federal Inland Revenue Service (FIRS) reveals the government’s ambitious plan to amass N9.96 trillion from PPT. This figure represents a significant jump of 214% from the N3.17 trillion generated in 2023, and an 89% increase over the initial projection of N5.26 trillion for the same period.
- To support this ambitious revenue target, the Federal Government set an oil price benchmark of $77.96 per barrel for 2024, coupled with a production estimate of 1.78 million barrels per day (mb/d).
