Concerns that Nigeria’s financial liquidity may run into more murky waters may have been justified by latest developments in its oil exploration sector
Crude oil remains the major source of revenue for the country and there are usually concerns any time there are shocks in the international oil supply and pricing sector.
The global cartel for oil producing countries, the Organisation of Petroleum Exporting Countries (OPEC) oil report for September captures a year-on-year, YoY, drop by 6.7 per cent of oil exploration activities in the country, which may imply reeducation in oil incomes.
The reduction is on the back of limited investment in the upstream sector of the Nigeria’s petroleum industry, according to OPEC’s October 2024 Monthly Oil Market Report.
From the 15% it was in the corresponding period last year, the oil rigs for exploration dropped to 14, though on a month-on-month, MoM basis, the number of rigs deployed remained 14 in September 2024, as it was last month.
The Eagle reports that by 2023 statistics, Nigeria has crude oil reserves of 37.1 billion
barrels with a production capacity of 2.5 million barrels per day.
Nigeria primarily exports light lowsulphur (sweet) crude oil, with 79.63% of total
exports in Q1:2023 attributed to crude oil, however, potential in the sector is being hampered by amongst other issues, crude oil theft and pipeline vandalism, which lead to production disruptions and by extension limited export.
Experts point out that Nigeria could not maximize its oil and gas sector potential when international oil companies dominate the sector, accounting for over 80 per cent of activities.
Leading professional services firm, PwC Nigeria, in its 2024 executive summary of economic activities in the country, had undertaken an overview of developments in the sector affirming that it would be defined in 2024 by seven key issues.
These, according to it, include, executing fiscal reforms: balancing ambition with budgetary implementation; evolving monetary policy stance: finding the right framework and instruments to achieve price stability, investors, and undulating pathways to unlocking productivity in the economy.
The others, according to it, are, persisting vulnerability to external pressures with potential of ‘shocks’, as consumers may likely adjust better to the evolving policy and macro realities, and improved sectoral development riding on reforms.
SOURCE: theeagle.com.ng