Nigeria's Oil and Gas Sector Records Significant Growth in 2024


By Adakoriko Adaviriku Adumaza



Despite persistent challenges, the Nigerian Oil and Gas sector achieved remarkable milestones in 2024, driven by government policies aimed at enhancing production, attracting investments, and promoting sustainability.

Key Achievements:
Revival of Refineries: The Port Harcourt and Warri Refineries resumed operations in November and December 2024, respectively, after decades of dormancy.
- OPEC Quota Compliance: Nigeria achieved 99% compliance with its OPEC production quota of 1.5 million barrels per day (bpd).
- Increased Oil Production: Crude oil production levels increased from 1.2 million bpd in February to 1.7 million bpd by August 2024.
- Decarbonization Policies: The government introduced policies to reduce carbon emissions and promote renewable energy sources.
- Foreign Investment: Nigeria attracted $4 billion in foreign direct investment (FDI) into exploration and production.

Impact of the Achievements:
- Enhanced Domestic Production: The revival of the refineries enables Nigeria to process more crude oil domestically, reducing dependence on imported refined products.
- Economic Benefits: Local refining reduces foreign exchange outflow, potentially stabilizing the national currency and improving the trade balance.
- Energy Security: Increased refining capacity ensures a reliable supply of petroleum products, mitigating global supply chain disruption risks.
- Market Dynamics: The resumption of refinery operations is expected to lead to a drop in fuel prices, benefiting consumers and stimulating economic activity.

Challenges Ahead:
- Underinvestment in Infrastructure: The sector still faces underinvestment in infrastructure, high production costs, and environmental degradation.
- Fuel Subsidy Removal Backlash: The sudden removal of fuel subsidies in May 2023 led to increased petrol costs, which the government aims to mitigate through the compressed natural gas (CNG) initiative.

Overall, 2024 marked a significant turning point for Nigeria's oil and gas sector, with the government's proactive reforms paving the way for increased investment, production, and economic growth.

AAA

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