Can Nigeria surpass 1.7mbpd oil target in 2024?

Nigeria is gearing up to meet and surpass the 2024 crude oil budget benchmark of 1.7 million barrels per barrel despite facing a marginal decline in oil output in November this year. Kola Karim, the chairman of Shoreline Group, shared insights on this ambitious goal and the overall oil market dynamics in a recent interview with CNBC Africa. During the interview, Karim highlighted the significance of Nigeria's oil production in generating essential revenue for the country. He emphasized that the government is intensifying efforts to enhance performance in all producing assets through negotiations and collaborations with key industry stakeholders. The aim is to optimize production levels and maximize the impact on the nation's economy. One of the key challenges faced by the oil market in the current year has been oversupply, with major oil-producing nations like Russia and Saudi Arabia voluntarily reducing their outputs to stabilize prices. Karim acknowledged this issue and pointed out that Nigeria has an opportunity to boost its domestic consumption of crude oil significantly. With plans for new refineries and increased refining capacity, Nigeria can effectively utilize excess production outside OPEC quotas within its local market. Looking ahead to 2024, Karim expressed a cautiously optimistic view on oil prices, projecting a range between $75 and $100 per barrel. He attributed this forecast to factors such as growing demand from major economies like China and India, as well as Nigeria's emerging role as a significant player in global refining. The potential rise in Nigerian refining activities could fuel additional demand for crude oil in the market. Regarding OPEC plus' commitment to production cuts in the first quarter of 2024, Karim believed that further reductions are feasible to support price stability. He underscored the necessity of ongoing cuts to counterbalance the substantial increase in oil production from the United States, which has emerged as a leading global producer in recent years. In terms of investments in Nigeria's oil and gas sector, Karim expressed enthusiasm for the opportunities arising from international companies restructuring their portfolios. He emphasized the importance of local companies securing the necessary capital to sustain investments and urged the government to provide support for independent oil firms. Karim also highlighted the potential for growth in the gas sector, emphasizing the benefits of increased investment in gas processing and infrastructure. As the interview drew to a close, Karim addressed the security situation in the Niger Delta, acknowledging efforts by the government to enhance stability and engagement in the region. While he noted improvements, Karim emphasized the ongoing need for further measures to ensure a conducive environment for oil production. In conclusion, Nigeria's ambition to surpass the 1.7 million barrels per day oil target in 2024 reflects a commitment to leveraging its oil resources for economic growth. Despite global uncertainties and market challenges, the country aims to capitalize on its refining potential and strategic partnerships to navigate the evolving landscape of the oil industry.