Will Nigeria attain higher crude production in 2025?

Nigeria, a key player in the global oil market, aims to achieve a production target of 2.1 million barrels per day by 2025 despite facing challenges in maintaining its current production levels. In a recent interview with Kelvin Emmanuel, the Chief Executive Officer of Dairy Hills, key insights were shared regarding Nigeria's oil production, global market dynamics, and the implications of current geopolitical events on oil prices. The discussion highlighted the impact of OPEC's influence, the rise in U.S. oil production, and the pricing strategies in the Nigerian petroleum sector. Emmanuel discussed the diminishing influence of OPEC in determining oil prices compared to previous years when the organization had more control over the market. With the United States now producing 13.3 million barrels per day and plans to increase this further, the dynamics of the oil market have shifted significantly. The interview also touched on President Donald Trump's stance on climate change and offshore drilling, indicating potential changes in U.S. oil production and its impact on global prices. Regarding Nigeria's production targets, Emmanuel expressed skepticism about the country's ability to reach the projected 2.1 million barrels per day by 2025. With current production levels at around 1.5 million barrels net of condensates, he suggested a more conservative estimate of adding 200,000 barrels of crude oil by 2025. Structural issues within Nigeria's domestic market, such as unresolved joint ventures and production contracts, were identified as challenges that must be addressed to support increased production. The conversation then shifted to recent developments in the Nigerian petroleum sector, specifically the 5% adjustment in the ex-depot price of petrol by Dangote. Emmanuel highlighted the complexity of pricing strategies in a deregulated market, emphasizing the need for efficient logistics and commercial equalization funds to manage rising crude oil prices. He commended Dangote's efforts in navigating these challenges while expanding its supply chains and partnerships. In assessing the future trajectory of oil prices, Emmanuel took a bearish stance due to anticipated increases in U.S. production and the potential for a supply glut. He noted OPEC's role in balancing output to stabilize prices and emphasized the high production costs associated with shale oil in the U.S. Furthermore, he discussed Nigeria's participation in BRICS (Brazil, Russia, India, China, South Africa) and its limited leverage within the bloc due to internal market constraints. Overall, the interview provided valuable insights into Nigeria's oil production targets, global market dynamics, and the challenges facing the industry. As the country strives to enhance its oil output and navigate evolving market conditions, addressing structural issues and fostering strategic partnerships will be crucial for sustainable growth in the sector.