Nigeria, Africa’s largest oil-producing country, has committed to an ambitious plan to double its oil production by 2025, aiming to pump as much as 4 million BPD in six years’ time.
“For the upstream, we are committed to aggressive production growth, and our target is to achieve a reserve level of 40 billion barrels of crude oil, and producibility of four million barrels of crude oil per day by 2025,” said Maikanti Baru, Group Managing Director at the Nigerian National Petroleum Corporation (NNPC).
Currently, the Organization of the Petroleum Exporting Countries (OPEC) is producing an estimated 2.2 million BPD in crude oil and condensate. In March, Nigeria’s crude oil production stood at 1.733 million BPD, up by 11,000 BPD from February, according to OPEC’s secondary sources. According to OPEC figures, the oil and gas sector accounts for about 10 percent of Nigeria’s gross domestic product (GDP), while petroleum export revenues make up nearly 83 percent of the country’s total export revenue.
Challenges
Analysts, however, argue that achieving this goal is unlikely. Nigeria currently has operating refineries with a total processing capacity of 445,000 BPD and it often struggles to keep them at full-capacity operation because of underinvestment in maintenance. Furthermore, the oil refineries are currently at a capacity too low to meet this goal.
“Nigeria has not met a single production target for at least a decade now, in many cases because of security concerns,” Cheta Nwanze, an analyst with Nigerian firm SBM Intelligence, told Bloomberg. Oil theft from pipelines is a major issue in Nigeria, as it can lead to leaks and thus pipelines being temporarily shut down for maintenance.
To address the shortfalls in refining capacity, Baru said: “NNPC is adding 215,000 BPSD of refining capacity through private sector-driven co-location at our existing facilities in Port Harcourt Refining Company (PHRC-100,000 BPSD), and Warri Refining and Petrochemicals Company (WRPC-115,000 BPSD) respectively.
“Additionally, NNPC through its new initiative of establishing Condensate Refineries with private sector participation is providing clusters for in-country refining capacity totaling about 250,000 BSPD, which closes the PMS supply-demand gap, and creates positive margins to the investors.
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