Nigeria expects 30% rise in crude output by year-end with new deals
(Bloomberg) 鈥 Nigeria expects a 30% increase in crude and condensate output as authorities strengthen security around the nation鈥檚 oil infrastructure and incentives in the sector attract investment, even though the gain could cross its OPEC+ commitment to limit production.
Output will reach 2 million bpd before the end of the year from 1.54 million bpd in September, according to the Nigerian Upstream Petroleum Regulatory Commission. 鈥淎s of today the country鈥檚 crude oil production plus condensate is 1.8 million bpd and we鈥檙e pushing, working with everyone to increase it to two million bpd before December,鈥 Enorense Amadasu, executive commissioner for the Abuja-based agency said at a conference in Lagos on Monday.
While the regulator didn鈥檛 disclose the proportion of crude to condensate in its projection, a higher level would push output closer to or over the 1.5 million bpd quota that Nigeria agreed with OPEC+ not to exceed. The 23-nation group has implemented the production limits to stave off a surplus and shore up crude prices.
Not all members have followed the plan. The group鈥檚 leadership has pressed members like Iraq, Kazakhstan and Russia to fully implement output cuts pledged at the start of the year, and make additional reductions in compensation for over-producing.
Africa鈥檚 largest oil producer has stayed below its OPEC+ quota for more than two years due to a lack of investment and widespread theft and vandalism in the oil-rich Niger Delta. President Bola Tinubu鈥檚 government has made efforts to draw investors to the sector by offering tax breaks to producers as well as approving pending asset sales.
The upstream regulator is looking to open bids for 31 oil and gas blocks spanning the country鈥檚 onshore and offshore acreage as part of measures to further increase production, Amadasu said, without giving a timeline. 鈥淭hese blocks have been carefully selected for its potentials to boost our reserves and stimulate economic activities,鈥 he said.