African Energy Chamber has suggested that Nigeria’s incoming president, Bola Ahmed Tinubu, may pursue a different oil policy than his predecessor, President Buhari. The AEC made this known in a report published on May 9.
According to AEC, Nigeria has good reasons to expect a certain amount of policy change that will affect the oil industry in 2023. The group explained that one of the reasons cited is the commissioning of the Dangote Refinery, which is expected to reduce Nigeria’s reliance on imported fuels and could stimulate the development of other industries. The group argued that Tinubu’s oil policy will not be a mere carbon copy of Buhari’s.
The reasons the AEC gave for this assumption include:
Dangote refinery
Tinubu’s inauguration will occur a week after the commissioning of the Dangote Refinery, the 650,000-barrel per day (bpd) oil-processing plant. The plant is expected to reduce reliance on imported fuels.
Recall that Nairametrics has also reported that the refinery’s production of critical products like naphtha and polypropylene will stimulate the development of other industries, such as cosmetics, plastics, and textiles.
A shift in upstream operations
According to the AEC, conditions are shifting in the upstream sector and Nigeria appears to be making some headway in reducing crude oil production losses due to theft, sabotage, and pipeline vandalism.
The group says Nigeria is on track to bring output levels back up to the 2021 level of 1.3 million barrels per day (bpd) in 2023, an increase from 1.18 million bpd in 2022.
So, Tinubu’s administration will have some relief from falling oil production rates, as long as the status quo keeps improving. A part of the report stated:
- “In short, Nigeria appears to be headed towards lower fuel imports and higher oil production this year.”
What you should know
The African Energy Chamber also highlights the fact that the outbreak of war between Russia and Ukraine in February 2022 presented an opportunity for Nigeria – as with other major producer nations – to reap the benefits of high oil prices, but the country’s oil production continued to be hampered by crude oil theft and pipeline damage.
- However, in an effort to curb crude oil theft and vandalism, the federal government announced a new approach in collaboration with host communities to protect critical pipeline systems, with a pipeline surveillance contract awarded to protect oil assets.
- It is important to note that in December 2022, Bala Wunti, the Chief Upstream Investment Officer at the NNPC Upstream Investment Management Services (NUIMS) said that in the fight against crude oil theft, the government makes use of a new security architecture that is anchored on rectangular architecture, reliant on a command-and-control center technology that brings together the security and intelligence agencies, the regulators, and the community.
Source: Nairametrics
