Nigeria’s crude oil sector achieved a remarkable milestone in 2024, with revenues reaching an estimated N50.88 trillion, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The nation produced a total of 408.68 million barrels of crude oil during the year, contributing significantly to this revenue surge.
A January 9, 2025, report by Statista Research Department highlighted that the average price of crude oil in 2024 stood at $80.53 per barrel. Multiplying this price by the volume of crude oil produced translates to $32.91 billion. At the exchange rate of N1,546 per dollar, this equates to approximately N50.88 trillion.
With the inclusion of condensates, Nigeria’s total oil production in 2024 rose to 566.79 million barrels. This performance exceeded initial budgetary projections, where the nation had planned to produce 649.7 million barrels of oil at an average daily output of 1.78 million barrels per day (mbpd), with a benchmark crude oil price of $78 per barrel and an exchange rate of N750 per dollar.
Despite falling short of its daily production target of 1.78mbpd, Nigeria surpassed its revenue projections due to favorable fluctuations in crude oil prices and the depreciation of the naira.
Revenue Allocation and Market Dynamics
The revenue generated from crude oil sales in 2024 was shared among the Nigerian National Petroleum Company Limited (NNPCL), international oil companies (IOCs), and indigenous oil producers. Allocations were guided by established fiscal frameworks to ensure equitable distribution among stakeholders, including the federal, state, and local governments.
The global crude oil market witnessed significant price volatility in 2024. Prices surged in March following geopolitical tensions, including attacks on Russian refineries during the Ukraine conflict. For instance, Brent crude rose from $82.44 per barrel on March 11 to $86.87 shortly after. Similarly, Nigeria’s Brass River and Qua Iboe crude sold at $90.07 per barrel on March 13, reflecting a significant price increase.
However, by September, Brent crude prices fell below $70 per barrel for the first time since December 2021. This decline was mirrored across other crude benchmarks, with Nigeria’s Brass River and Qua Iboe crude dropping to $74.57 per barrel from earlier highs.
Despite these fluctuations, the year ended on a relatively stable note, with the average price of Brent crude oil in December standing at $74 per barrel.
Production Challenges and OPEC Quota
Nigeria’s crude oil production averaged 1.484mbpd in December 2024, slightly below the Organisation of the Petroleum Exporting Countries (OPEC) quota of 1.5mbpd. The NUPRC reported that while the country’s daily production levels fluctuated throughout the year, the highest output was recorded in December at 1.667mbpd (including condensates).
The country’s production journey in 2024 was marked by notable challenges. Crude production dropped from 1.42mbpd in January to a low of 1.23mbpd in March before gradually rebounding. By November and December, production had improved to 1.48mbpd, although it still fell short of the OPEC quota.
Government Optimism and Future Projections
Mele Kyari, Group Chief Executive Officer of NNPCL, expressed optimism about Nigeria’s ability to achieve its production and revenue targets in the 2024 budget. He highlighted that the country’s production estimates, including condensates, remained realistic and achievable.
Kyari noted, “The cumulative production figure of 1.785mbpd includes both crude oil and condensates. While OPEC quotas only account for crude oil, our total production figures align with the nation’s aspirations.”
Despite the challenges faced in meeting OPEC quotas, the Minister of State for Petroleum Resources, Heineken Lokpobiri, stated that production levels had improved significantly since the beginning of the year. However, data from the NUPRC indicated discrepancies in the reported figures, with the highest combined output for crude and condensates standing at 1.69mbpd.
Looking Ahead
As Nigeria strives to ramp up crude oil production to 2mbpd in the coming year, the government has reiterated its commitment to addressing challenges in the oil sector. These include improving operational efficiencies, curbing oil theft, and ensuring compliance with industry regulations.
The oil and gas sector remains pivotal to Nigeria’s economy, and the record-breaking N50.88 trillion revenue in 2024 underscores its significance in driving economic growth and development.
