Why Nigeria Has Been Experiecing Low Crude Oil Output – FG

The Federal Government has said the country has been experiencing low crude oil output due to underinvestment.

Naija News reports that the Minister of Budget and Economic Planning, Abubakar Bagudu, made this known on Wednesday at the Ministerial Sectoral Briefing in Abuja, the nation’s capital.

The former Governor of Kebbi State said the government initiated a macroeconomic reform as part of the renewed hope agenda to address the root causes of low investment and revenues.

He said: “We embarked as part of the renewed hope agenda on a macroeconomic reform because that was what was responsible for low investment, low revenues, and our economy size was shrinking. It was too small compared to our needs.

“That is why we are not even producing crude oil in the quantity we used to before or as allowed by international convention, which is our OPEC quarter, because of underinvestment, whether in the physical infrastructure itself or security.”

Recall that on May 14, the Organisation of Petroleum Exporting Countries (OPEC) said Nigeria’s average daily crude oil production rose to 1.28 million barrels per day (mbpd) in April.

This is below the 1.78 million bpd estimate adopted by President Bola Tinubu in the 2024 budget and the production quota of 1.5 million bpd set for the country by OPEC in 2024.

However, on May 19, the Group Chief Executive Officer (CEO) of Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, said the country’s oil production volume is close to 1.7 million bpd.

Kyari stated that Nigeria has the potential to produce two million barrels per day but the country is unable to due to pipeline vandalism and oil theft.