Emeka Okoro
Fri, Sep 1, 2023 11:05 PMNigeria's Oil Output Surges to 1.67 Million Barrels per Day on Improved Security
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Nigeria's oil production has surged to 1.67 million barrels per day, thanks to improved security measures in the Niger-Delta region. President Bola Tinubu's re-engineered security approach has led to significant changes in the oil industry, which has been plagued by large-scale oil theft. The removal of the costly petrol subsidy has also contributed to savings for the country. However, Nigeria's oil sector still lags in contributing to the country's economic growth due to years of underinvestment and pipeline vandalism.
Abuja, September 1 - Nigeria's oil output has soared to 1.67 million barrels per day, up from just under a million barrels per day a few months ago. This significant increase is mainly attributed to the improved security situation in the Niger-Delta region, according to Mele Kyari, the group chief executive of Nigeria's state-oil firm NNPC.
In recent years, Nigeria's oil production has been hindered by large-scale oil theft from pipelines and wells, which has had a detrimental impact on the country's finances. However, with President Bola Tinubu's re-engineered security approach, the Nigerian oil industry has witnessed notable changes in its production environment.
According to the National Bureau of Statistics, Nigeria recorded an average daily oil output of 1.22 million barrels per day in the second quarter of 2023. This signifies a positive upward trend for the country's oil production.
One of the key challenges faced by President Tinubu was the costly petrol subsidy, which consumed a staggering $10 billion in 2022. Tinubu took the bold step of scrapping the subsidy, a move aimed at saving costs for the Nigerian economy. Mele Kyari revealed that in today's market conditions, Nigeria would have been spending approximately 1 trillion naira ($1.3 billion) monthly on the subsidy. However, the removal of the subsidy has significantly reduced petrol consumption by 30% to 46 million liters.
Furthermore, the foreign exchange demand for petrol imports has also declined, alleviating some pressure on Nigeria's foreign currency reserves. As a result, the country is saving substantial financial resources and facing the realities of what it can truly afford.
Despite the recent improvements in Nigeria's oil sector, it still has a long way to go in contributing positively to the country's economic growth. In the second quarter of 2023, the dominant oil sector, which accounts for the bulk of government revenue and 90% of foreign exchange reserves, contracted by 13.43%. This can be attributed to years of underinvestment, crude oil theft, and pipeline vandalism.
Addressing these challenges should be a priority for Nigeria. Increased investment, enhanced security measures, and improved infrastructure will be crucial in unlocking the full potential of Nigeria's oil sector and ensuring its positive contribution to the country's economic growth in the long run.
Source of content: OOO News 2023-09-01 News
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