Nigeria, Africa’s largest oil producer, has set an ambitious target to increase daily crude and condensate production by nearly 60% to 2.7 million barrels per day (bpd) by 2027, according to Olu Verheijen, special adviser on energy to President Bola Tinubu.
This increase aims to enhance the nation’s revenue stream and address economic challenges such as widespread poverty and inadequate infrastructure.
A significant portion of this production surge will come from oil condensate, a lighter, more volatile hydrocarbon, rather than just crude oil.
This strategic move allows Nigeria to stay within its OPEC+ quota of 1.5 million barrels of crude per day, while leveraging condensate production, which is not subject to the cap.
“The OPEC quota does not include condensate. The target we’ve set for ourselves is a combination of condensate and crude.
“The idea is to try and demonstrate the capacity for a higher quota as required.”
Olu Verheijen, Special Adviser on energy to President Bola Tinubu
One of the major factors contributing to the planned rise in production is enhanced security around oil production and transportation sites.
Nigeria has historically struggled with oil theft, pipeline vandalism, and militant attacks, which have significantly hindered production levels. Addressing these security challenges is expected to facilitate a steady increase in output.
Nigeria’s production levels dropped as low as 1.1 million bpd in 2022, but recent improvements have led to an increase. By December 2023, the country produced 1.67 million bpd, of which 1.48 million barrels were crude.
The government hopes to build on this momentum by implementing further security measures and improving infrastructure.
Nigeria’s push to boost oil production aligns with its broader economic recovery strategy. As an oil-dependent economy, increased production is essential for generating foreign exchange, funding government budgets, and stabilizing the economy.
Refining Oil Production Reforms
Olu Verheijen, Special Adviser on energy to President Bola Tinubu
Nigeria is also on course to become a net exporter of refined petroleum products, thanks to the Dangote Refinery, owned by billionaire Aliko Dangote.
As the refinery ramps up production, the country aims to reduce its dependence on imported fuel and strengthen its refining capacity.
Verheijen noted that the removal of fuel subsidies has played a crucial role in fostering investment in local refineries. The decision to remove subsidies has historically been met with resistance, but the government argues that the move has long-term economic benefits.
“What that has done is allowed the downstream, mainstream downstream of that sector to now become commercially viable for the first time in decades.
“Investments in refineries now make sense when they didn’t before.”
Olu Verheijen, Special Adviser on energy to President Bola Tinubu
With greater investments in refining capacity, Nigeria could reduce its fuel import bills and stabilize domestic fuel prices, reducing dependency on volatile global markets.
Nigeria’s plan to increase its oil production by 2027 represents a strategic effort to revitalize its economy, enhance revenue generation, and improve energy security.
By leveraging condensate production, improving security measures, and fostering investment in refineries, the country aims to navigate the complexities of the global oil market.
The success of this initiative will depend on effective policy implementation, sustained security improvements, and continued investment in infrastructure. As Nigeria takes steps toward energy self-sufficiency and economic stability, its oil sector remains central to its development agenda.
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