- Oil Output: FG Abandons Four-million-barrel Target
Seven years after the production target of four million barrels of oil per day was set, the Federal Government has given up hope of achieving that output by 2020 as the country struggles to retain its Africa’s top producer status.
The Federal Government now aims to achieve 2.5 million barrels per day by 2020, according to an Economic Recovery and Growth Plan released by the Ministry of Budget and National Planning on Tuesday.
The nation’s oil output had hit a peak of 2.88 million bpd in October 2010, according to data from the Central Bank of Nigeria. But it suffered declines on the back of a slew of militant attacks, natural decline in production from existing fields, and lack of exploration activities occasioned largely by regulatory uncertainty.
Following the resurgence of militant attacks in the Niger Delta last year, the nation’s crude oil production fell to as low as 1.3 million bpd in May, according to the Ministry of Petroleum Resources.
“With regard to the oil and gas sector, the intention is to increase the production of crude oil and gas while adding value in the downstream petroleum sector,” the ERGP indicated.
The government plans to “restore production to 2.2 million bpd in the short term and 2.5 million bpd by 2020 to increase export earnings and government revenues by additional N800bn annually.”
According to the economic plan, in 2012-2015, crude oil production was stable at an average of 2.2 million bpd.
“But in 2016, repeated attacks on oil pipelines and production facilities by militants in the Niger Delta reduced production from 2.1 million bpd in January to 1.1 million bpd in August.
“However, oil production averaged 1.8 million bpd by end 2016. This was attributed to the repairs of damaged facilities and agreements to cease sabotage and related vandalism.”
The Federal Government had in 2010 set the target of 40 billion barrels of crude oil reserves and a production of four million bpd by 2020.
The Group Managing Director, Nigerian National Petroleum Corporation, Dr. Maikanti Baru, had in February at a conference in Lagos said to achieve the target, the country would need an increment of at least one billion barrels in reserves year-on-year till 2020 and half a million barrels in incremental production capacity per day within the same time frame.
He said, “Considering our quest for revenue generation as a nation, it is a given that we need to increase our exploration efforts in order to sustain our reserve base and grow production.
“It, therefore, behoves us to continue to invest in our industry to address declining production rates and future increase in demand. The current global demand forecast for oil is expected to increase to about 17 million barrels per day by 2040. For us to be a part of this and remain relevant, we need to find more to produce more.”
According to Baru, as part of government’s commitment towards ensuring that Nigeria remains the number one producer and exporter of crude oil in Africa, the Federal Government has continued to sustain the amnesty programme to ensure youth restiveness is stemmed.
“There is also increased effort towards ensuring adequate security within the Niger Delta region in order to continue to attract investors as engagement with various stakeholders remains ongoing,” he added.
