Nigeria’s crude oil revenue witnessed a substantial surge in 2024, reaching an impressive N50.88 trillion. This figure, derived from data provided by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and corroborated by Statista Research Department, represents the total value of 408.68 million barrels of crude oil produced throughout the year, calculated using an average price of $80.53 per barrel and an exchange rate of N1,546 to the dollar. Including condensate, total oil production reached 566.79 million barrels. This revenue significantly surpassed the initial projections outlined in the 2024 budget, which had anticipated a lower average price of $78 per barrel, an exchange rate of N750 to the dollar, and a higher production target of 649.7 million barrels. The unexpected surge in revenue can be attributed primarily to fluctuations in global crude oil prices and the depreciation of the naira against the dollar.
The N50.88 trillion generated from crude oil sales represents the collective earnings of the Nigerian National Petroleum Company Limited (NNPCL), international oil companies (IOCs), and their indigenous counterparts. The distribution of this revenue involves a complex interplay of factors, with allocations made to various stakeholders, including the three tiers of government. The volatility of global crude oil prices in 2024 played a significant role in the final revenue outcome. Prices fluctuated throughout the year, influenced by geopolitical events such as attacks on Russian refineries by Ukrainian forces, which led to price increases in March. Conversely, prices experienced a downturn in September, with Brent crude falling below $70 per barrel for the first time since December 2021.
Despite the revenue exceeding projections, Nigeria’s crude oil production in 2024 fell short of its targets. The country aimed for an average daily output of 1.78 million barrels per day, but NUPRC data reveals a lower daily average of 1.484 million barrels in December, indicative of the overall trend throughout the year. This shortfall below the OPEC quota allocated to Nigeria underscores challenges in achieving production goals. The December figure also reflects a slight dip from November’s 1.485mbpd. While the inclusion of condensate boosts total production figures, the focus remains on increasing crude oil output to reach the desired 2 million barrels per day target in the near future.
A closer examination of monthly production data reveals the fluctuating nature of Nigeria’s oil output in 2024. Production started at 1.42 million barrels per day in January, dipped to 1.23 million barrels per day in March, and then gradually improved to reach 1.48 million barrels per day in November and December. This data contradicts claims made by the NNPCL and the Ministry of Petroleum Resources of reaching 1.8 million barrels per day (including condensate) in November. The NUPRC data confirms that Nigeria did not meet its OPEC quota at any point during the year, and the highest recorded production, including condensate, reached only 1.69 million barrels per day.
Prior to the 2024 budget’s passage, NNPCL Group Chief Executive Officer, Mele Kyari, expressed confidence in the projected crude oil price benchmark of $77.96 per barrel and the production target of 1.785 million barrels per day (including condensate). He justified the price projection based on market dynamics and anticipated that oil prices would remain above $70 per barrel. Kyari also clarified that the production target encompassed both crude oil and condensate, explaining that the OPEC quota applied only to crude oil production, while condensate production consistently contributed an additional 250,000 to 300,000 barrels per day.
In essence, while Nigeria benefited from favorable crude oil prices and a weaker naira, resulting in higher-than-projected revenue in 2024, the country faced persistent challenges in meeting its production targets. The fluctuating global oil market, combined with internal production limitations, contributed to a complex and dynamic year for Nigeria’s oil sector. Moving forward, the focus remains on boosting crude oil production to reach desired levels while navigating the uncertainties of the international oil market and maximizing revenue generation for national development. The discrepancies between official statements and NUPRC data highlight the need for greater transparency and accuracy in reporting production figures.
