Babalola asserts that Nigeria’s crude production can reach 3 mbpd

According to Sunday Adebayo Babalola, a retired deputy director from the now-defunct Department of Petroleum Resources, Nigeria can exceed its quota from the Organization of Petroleum Exporting Countries and its allies (OPEC+) given the appropriate circumstances.

According to him, Nigeria can provide or produce three million barrels of crude oil per day if it uses its natural resources effectively, operates in a secure environment, and combats oil theft, insecurity, and destruction of pipelines and other oil equipment.

In addition, he said that Nigeria was losing a lot of money by failing to achieve its OPEC+ quota, urging the Federal Government (FG) to step up its efforts to combat oil theft and vandalism. He continued by saying that the government should activate and rev up all essential processes and tactics to deal with the threat.

“Though Nigeria’s oil production has increased, the country is yet to meet its oil supply quota by the OPEC, which is 1.84 million barrels per day (mbpd).”

“Nigeria’s crude oil production figure in January 2022 was 1.39 million bpd, which was the highest in the year. However, oil production decreased to 1.25 million bpd, in February; 1.24 million bpd in March; 1.22 million bpd, in April; and 1.02 million bpd in May.”

“Oil production rose to 1.15 million bpd in June but declined to 1.08 million bpd in July. In August, production supply was at an all-time low of 972,394 bpd. It further dimmed to 937,766 bpd in September. In October, 1.014,485mbpd; Nov, 1.186mbpd; and December, 1.235mbpd.”

Babalola also stated that: “I am happy that Nigeria’s crude production is rising above one million bpd. It should get better by the day because we are losing so much money with Nigeria not meeting its quota by the OPEC. We are losing much money and the oil companies are losing much money.”

“When I was in the DPR, I called it deferred revenue, but whichever way you look at it, whether it is lost revenue or deferred revenue, there is no money to lose. Now, if our productions are improving and Nigeria earns those revenues, it will be a good development, which can translate to the provision of infrastructure and good welfare for the people and improved living standards.”

“We can reach three million barrels per day. Now if our production is improving and we have the facilities to reach almost three million barrels per day and we have the OPEC go-ahead, the more we produced, the better for the economy of this country. It is a positive development that we are improving our production.”

“To reach it, we need to overcome the current challenges. We need to make security very good so that people will not tamper with the pipelines or the flow lines.”

He claimed that the problem had multiple roots, including paralyzed refineries and the depreciation of the Naira against the dollar.

Although there are concerns that the price of gasoline may soar after deregulation, he claimed that it will eventually stabilize, just as it did in the telephone industry.

Babalola explained: “We will continue to have this situation of petrol crisis until we deregulate. We have to recognise that the pricing is not the same as the scarcity. If you have your money and you cannot see it to buy, think about it. The government has to implement deregulation of the downstream sector. If we do not do that, and if the market is not a willing buyer, and a willing seller kind of a thing, which is a free market, we will continue to have this same problem that we are having currently.”

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