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Nigeria is producing 1 million barrels daily less than it can produce, local media reported today, citing the country’s federal government.
The government cited a lack of investments, a shortage of funding sources because of the energy transition, and insecurity among the factors driving the situation.
The Nigerian Upstream Petroleum Regulatory Commission served the warning, with its chief executive noting that the challenges the industry was facing “range from insecurity, low investment, and de-prioritisation of funding of hydrocarbon development arising from the energy transition.”
“Currently, Nigeria has the technical allowable capacity to produce about 2.5 million barrels of oil per day. However, arising from the highlighted challenges, our current production hovers around 1.5 million barrels of oil and condensate per day,” Gbenga Komolafe also said, as quoted by Punch.
The Western African producer is the biggest on the continent but it has struggled to boost its output and put an end to pipeline vandalism, which has made the investment environment in the country additionally challenging.
Earlier today, the Upstream Petroleum Regulatory Commission reported that oil production in Nigeria had slipped below 1 million barrels daily in April. The drop was at least in part the result of strikes at Exxon facilities that led to the company declaring force majeure on several assets, including the Qua Iboe export terminal.
Now the dispute with the workers has been settled and this month’s production rate will likely be higher but it would still fall short of what Nigeria has the capacity to produce.
Meanwhile, the UK’s Supreme Court ruled in favor of Shell in a lawsuit brought against the supermajor by Niger Delta communities and individuals regarding an oil spill from 2011. According to the court, the claimants had been too late in filing their suit and had missed the deadline for such filings.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.