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+---- Thread: Nigeria’s crude oil production to witness eight per cent decline (/showthread.php?tid=21830)
Nigeria’s crude oil production to witness eight per cent decline - Edoman - 09-05-2019
Nigeria’s crude oil production to witness eight per cent decline
![[Image: oil-pipelines.jpg]](https://guardian.ng/wp-content/uploads/2019/09/oil-pipelines.jpg)
Nigeria’s crude oil production may witness a steady decline to approximately 7.93 per cent before 2025, a new research, conducted by U.S.-based Orbis Research has said.Being the same year Nigeria has targeted to increase oil reserve to about 40 billion and daily production to about three million barrels per day, the current revelation raises doubts over the achievement of the target.
Nigeria has been facing reduction in investments into the oil and gas sector due to unaddressed uncertainties in regulations, as well as growing security tension in the country.
The Nigerian Natural Resource Charter (NNRC), had earlier disclosed that Foreign Direct Investment (FDI) in Nigeria’s oil sector dropped by $17.12 million in the third quarter (Q3) of 2018 from $24.85 million in Q2.
Similarly, the Executive Director of the Institute for Oil, Gas, Energy, Environment and Suitability (OGEES), Prof. Damilola Olawuyi, had also predicted an uncertain outlook for the sector in 2019, given the triple challenges of policy uncertainties, security challenges, and slump in crude oil prices at the international market.
The new report indicated that oil and gas production had been hampered in Nigeria in the past few years, due to the attack on oil and gas infrastructure by militants as well as oil theft, which has remained one of the major issues faced by oil & gas operators in Nigeria.The development, according to the Nigerian National Petroleum Corporation (NNPC), led to the loss of over 22 million barrels of crude in the first six months of this year, as the rate of vandalism rose to about 77 per cent in June.
“Lack of infrastructure, uncertainties in regulations, and security concerns have led Nigeria to underutilize its refining capacities, thereby pushing the country to become a net importer of refined petroleum products,” the report noted.However, Nigeria is on the edge of altering refined products’ supply dynamics in the region with the help of the upcoming Dangote Refinery, and is expected to become the regional refining hub in the coming years.
While top government officials had stressed on the need for a gas based economy, considering the huge gas resources in the country, the report noted that the shift to gas is also supported by the fact that major oil reserves are likely to get dry in coming three to four decades.
“The oil market is considered to be one of the most vulnerable markets where natural gas has the highest potential to penetrate. Moreover, gas production has become a major focus for the oil and gas companies, in response to strong investment in gas-to-power projects, across the region,” it added.