NIGERIA’s budgetary provision of 1.78 million barrels per day (bpd) of crude oil production will fall below the benchmark projected in 2024 and lower the country’s revenue prospect for the year.

On Wednesday, November 22, the Senate approved the medium-term expenditure framework (MTEF) for ‪2024-2026 and the fiscal strategy paper (FSP), which contains projections for budget appropriations over the next three years.

A daily crude oil production of 1.78 million bpd at $73.96 per barrel was projected for 2024, subject to the Nigerian National Petroleum Company Limited’s (NNPCL) confirmation.

Also approved was the Federal government’s proposed spending of N26 trillion in 2024, with N16.9 trillion in retained revenue, a N9 trillion budget deficit, and N7.8 trillion in new borrowings, besides other figures.

However, a recent report by the African Energy Chamber (AEC) shows that Nigeria’s daily crude production will fall below the 1.78 million bpd approved by the Senate.

According to the AEC report, ‘The State of African Energy 2024 Outlook,’ Nigeria is expected to achieve daily crude oil output of 1.51 million bpd in 2024.

Compared with the approved benchmark of 1.78 million bpd, it then means that Nigeria will lose 270,000 per day of crude oil production, which will reduce its revenue and, therefore, impact its fiscal expenditure.

The ICIR reports that despite the Organisation of the Petroleum Exporting Countries (OPEC) quota reduction system, Nigeria still needs to meet its daily crude production target, as shown in OPEC’s monthly oil market reports (MOMR).

In October, the country’s oil production stood at 1.35 million bpd, the highest production level since the beginning of the year and the most considerable volume since January 2022. The low outputs have been occasioned by insecurity, pipeline vandalism, militancy, and resulting force majeures imposed by operators, exacerbated by declining legacy fields and a lack of new start-ups.

In a statement by the AEC on November 19, its executive chairman, NJ Ayuk, said a flat market was likely in store for Africa, but with a gradual decline in oil production in 2024.

“As for Africa, our 2023 – 2024 output is expected to stay relatively flat at about 6.77 million bpd. But month-on-month production looks a bit bleaker, with production declining from 6.9 million bpd in January 2024 to approximately 6.62 million bpd in December 2024.

“We are forecasting global output to total more than 84 million barrels per day (bpd) next year, which is a 1.6% increase over 2023. The Americas, both north and south combined, are expected to see a marginal four per cent growth in output year over year (YoY) in 2024, while the Middle East is expected to see a smaller two per cent YoY growth over 2023 output,” Ayuk noted.