Nigeria’s crude oil production has been insufficient to generate the required oil export revenues over the last few months of 2023. Between January and May 2023, the net oil export revenue recorded a 66% (Y-o-Y) decline to US$11bn from the corresponding $34bn in 2022 due to reasons including fluctuating crude oil output and increased cases of crude oil theft in the Niger Delta. Low crude oil production has also dropped the country’s OPEC quota from 1.8 million barrels per day to 1.3 million barrels per day in May. Moreso, the renewed threats by the Niger Delta Militancy group, Creek Reform Warriors, to attack major oil facilities operated by the Shell Petroleum Development Company is further increasing market uncertainty and reducing investors’ confidence in the oil industry. Whereas Nigeria has many onshore and shallow water fields, the International Oil Companies (IOCs) which the Nigerian oil sector relied heavily upon, have largely divested to the offshore fields. Analysts believe these challenges have accounted for the low growth and contribution of the sector to GDP. With plans to renegotiate the country’s OPEC quota, the relevant agencies must work to tackle the incidence of oil theft, resolve maintenance issues, resolve host communities’ hostilities, and reduce the overall
