The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has unveiled its 2025 budget, which is based on a target crude oil production of 2.062 million barrels per day at a price of $75 per barrel. Currently, Nigeria’s production stands at approximately 1.7 million barrels per day, leaving a gap of about 350,000 barrels that needs to be filled to meet the ambitious production goal.
This update was shared by Mr. Gbenga Komolafe, the Chief Executive Officer of the NUPRC, during the inaugural Petroleum Industry Stakeholders’ Forum in Abuja, an event organized by the Ministry of Petroleum Resources. Komolafe provided details on the strategies the Commission is implementing to bridge this production shortfall and ensure Nigeria’s oil sector continues to significantly contribute to the country’s economy.
The “One Million Barrel per Day” Initiative to Boost Production
In an effort to address the deficit and prevent a revenue gap, the NUPRC launched the “Project One Million Barrel per Day Incremental Production Initiative” during its third anniversary celebrations in 2024. This bold initiative aims to optimize the operations within Nigeria’s upstream oil sector by shifting from a siloed approach to a more integrated and collaborative system. The goal is to increase operational efficiency, allowing all participants in the upstream value chain to maximize their capabilities and economies of scale.
To support this, the NUPRC has developed a comprehensive plan to identify and address the needs of various players in the value chain. This strategy is designed to create synergies and enhance collaboration, thereby improving overall productivity and boosting crude oil production.
Key Regulatory Actions and the 2024 Bid Round
In 2024, the NUPRC rolled out a Regulatory Action Plan (RAP) aimed at promoting industry stability and growth. This plan includes critical areas such as regulatory predictability, future licensing rounds, and their effective implementation.
As part of these efforts, the Commission hosted the 2024 Commercial Bid Conference in December, which saw the selection of successful bidders for available oil blocks. Notably, the conference was conducted online in real time, marking a significant milestone in Nigeria’s oil sector. This innovative approach utilized technology to ensure transparency and efficiency, and was attended by representatives from the Ministry of Petroleum Resources, the Ministry of Finance, the Nigeria Extractive Industries Transparency Initiative (NEITI), and the public. This process aligns with the Petroleum Industry Act (PIA) 2021, which mandates an open and competitive bidding process for oil blocks.
The real-time online nature of the Commercial Bid Conference was unprecedented in Nigeria’s oil exploration history and represents a major step toward enhancing transparency and increasing investor confidence in the country’s oil industry.
Strengthening Nigeria’s Role as Africa’s Energy Hub
In line with Nigeria’s goal of becoming the energy hub of Africa, the NUPRC has taken a significant step by providing space within the National Data Repository (NDR) for the Africa Energy Bank (AEB) Headquarters in Abuja. This initiative is expected to fast-track the operationalization of the AEB, supporting job creation and providing financial backing to the oil and gas sector.
Growth in Reserves and Rig Activity
Komolafe highlighted several positive developments in Nigeria’s upstream sector for 2024. The country’s oil reserves grew by 1.45%, while gas reserves increased by 0.206%. Additionally, the number of active rigs in the country rose from an average of eight in 2021 to 38, reflecting a 79% increase in drilling activity. This growth in rig activity is crucial to meeting Nigeria’s production goals and bolstering oil output.
The NUPRC also worked closely with security agencies to reduce incidents of oil theft and deferment, resulting in a remarkable 40% reduction in such occurrences in 2024. This achievement is critical for safeguarding Nigeria’s oil assets and optimizing production.
Industry Leadership and Future Prospects
Komolafe commended the leadership of the Ministers of State for Petroleum Resources for their guidance and commitment to advancing the sector during this pivotal period. With Nigeria’s economy increasingly reliant on oil revenue to meet the 2025 budget, the initiatives led by the NUPRC are critical to closing the production gap and ensuring fiscal stability.
The Petroleum Industry Stakeholders’ Forum provides an important platform for industry leaders to assess the state of Nigeria’s oil sector, identify challenges, and collaborate on solutions for sustainable development. The forum highlights the collective effort needed to strengthen Nigeria’s oil and gas industry and achieve the country’s economic objectives.
Conclusion: Moving Towards a Sustainable Oil Future
Nigeria’s oil and gas sector is undergoing significant transformation, driven by strategic initiatives designed to increase production and improve operational efficiency. The NUPRC’s efforts to close the crude oil production gap, streamline regulatory processes, and encourage greater collaboration across the upstream value chain are essential steps toward meeting the 2025 budget goals.
As Nigeria strives to position itself as Africa’s energy hub, the collaboration between the NUPRC, security agencies, industry stakeholders, and investors will be vital to sustaining growth in the oil and gas sector. By continuing to innovate and address challenges head-on, Nigeria is well-positioned to strengthen its oil industry and drive economic growth for years to come.
