New analysis suggests that while oil production is on the rise in the country, Nigeria is unlikely to meet its 2.6 mmbpd crude production target by 2027, instead forecasting 1.9 mmbpd by 2030.
London, UK, – Latest analysis from Westwood Global Energy Group (Westwood), the specialist market research and consultancy firm, uncovers a positive outlook for the Nigerian oil and gas sector, following a decade of unmet potential. However, success will hinge on timeliness of project completion, along with nation-wide infrastructure and security improvements.
With a newly elected president, Nigeria aims to boost crude production from 1.3 mmbpd produced in 2022 to 2.6 mmbpd by 2027, hoping to benefit from energy deficits in Europe and the hydrocarbon demand from industrialising nations such as China and India.
However, Westwood analysis shows that in the current state of play, the country is not likely to surpass 1.9 mmbpd of liquids production by 2030. Even with several notable near-term offshore developments on the horizon, Nigeria is only forecast to reach 2.6 mmboepd of oil and gas output by 2030 if projects are progressed on schedule, which has not been the case historically. Data also reveals that any further delays could cause a permanent dent in Nigeria’s production ambitions.
Michela Francisco, Onshore Energy Analyst, Westwood said: “Nigeria has traditionally been Africa’s largest oil producer, although the last 10 years have been characterised by cuts to upstream capex, security instability and oil theft. However hopes are high for revitalising the country’s oil and gas sector. While progress has already been made, Nigeria must continue to put measures in place to create an attractive business environment and entice local players and international energy companies to pave the way for the expected success.”
In late 2022, Nigerian National Petroleum Corporation (NNPC) announced a mini-exploratory bid round for seven ultradeep offshore blocks. Following bidding in January 2023, Westwood anticipates an average of 140 development wells to be drilled year-on-year until 2030 from the development of these new discoveries, which could see production increase beyond current expectations.
Michela continues: “While the country may not yet be in a position to hit its targets, Nigeria is making significant strides to transform its oil and gas industry and reap the benefits of its bountiful reserves. The coming years will pose an invaluable opportunity for domestic oil companies to take the front seat in onshore and shallow water exploration, and experience an upturn in fortunes.”
The analysis comes ahead of Westwood’s inaugural Wells & Production Outlook, a series of regional reports on both on and offshore performance, that will be available to download in 3Q 2023.