The Central Bank of Nigeria (CBN) has revealed that the country’s goal of achieving a 2 million/barrel oil production target is under threat.
According to the CBN’s latest economic report, oil revenue plummeted by 24.72% to N1.30 trillion in the third quarter of 2024, compared to N1.73 trillion in the second quarter.
The CBN identified ageing pipeline infrastructure and operational inefficiencies as the primary causes of the sharp decline in oil revenue. Frequent shutdowns due to deteriorating pipelines and installations also contributed significantly to the revenue shortfall,, which fell 75.39% short of the quarterly target.
Despite the challenges in the oil sector, Nigeria’s economy grew by 3.46% in Q3 2024, driven primarily by the non-oil sector. However, the oil sector’s performance remained sluggish, with year-on-year growth slowing to 5.17%.
Global market conditions also played a role in the decline, with the average spot price of Nigeria’s Bonny Light crude falling by 5.45% to $82.23 per barrel during the quarter, reflecting weaker global demand.
The CBN warned that urgent measures are necessary to address infrastructure and operational challenges in order to achieve the 2 million/barrel oil production target by the end of 2024.
Nigeria’s Minister of State for Petroleum Resources, Heineken Lokpobiri, had earlier expressed optimism about achieving this target, citing the government’s efforts to combat crude oil theft and address security concerns in the Niger Delta.
