Nigeria’s oil production: We must do more

Nigeria's crude oil production has seen a modest rebound, reaching around 1.66 million barrels per day. While this recovery is a welcome development after years of decline, it is far from a cause for celebration. The Federal Government is merely resuming duties it should never have neglected, indicating that the progress is a necessary catch-up rather than a significant victory.

The gains are largely due to enhanced security measures around oil facilities, improved pipeline surveillance, and the delayed implementation of key aspects of the Petroleum Industry Act. These are essential steps, but they address issues that have plagued the sector for years. Between 2005 and 2010, Nigeria consistently produced around 2.2 million barrels per day, a level it has yet to approach again. Falling short of its OPEC quota and significantly below past peaks underscores the vast losses incurred and the substantial work ahead.

The most persistent challenge remains organized crude oil theft, which has evolved into an industrial-scale criminal enterprise involving international networks, compromised officials, and influential local figures. Merely increasing surveillance and military presence is insufficient. Effective prosecution targeting the masterminds behind these operations, not just low-level operatives, is crucial. Nigeria cannot achieve meaningful oil sector reform while those responsible for large-scale theft evade serious consequences.

Furthermore, regaining investor confidence requires more than just security assurances. Persistent uncertainty regarding joint venture funding, volatile foreign exchange policies, and slow contract approvals continue to deter investors. Businesses prioritize reliability and clear regulations over government pronouncements. Until the operating environment demonstrates these qualities, capital will continue to flow to more predictable markets.

Infrastructure improvements are equally vital. Aging pipelines, underperforming export terminals, and a severely underdeveloped local refining industry leave Nigeria vulnerable. Enhancing synergy between oil production and local refineries is essential to end the paradox of an oil-producing nation heavily reliant on fuel imports. Returning to 2.2 million barrels per day would not only boost government revenue, support the naira, and create jobs but also signify Nigeria's regained control over its most critical economic resource. The Tinubu administration deserves commendation for halting the decline, but the focus must now shift to fully reclaiming past achievements.