Nigeria is an oil-dependent economy, with the ‘liquid black-gold’ contributing over 70.0% to export earnings, c.90.0% to external reserves and more than 65.0% to government revenues in the last two decades. With 36.9billion barrels of proven oil reserves, Nigeria has the 2nd largest number of oil fields in Africa. Additionally, Nigeria recently discovered more oil in the Gongola Basin of the North Eastern zone. Superficially, Nigeria is oil-rich as widely believed, but the devil is often in the details.
To determine if Nigerians are truly oil-rich, we examined Nigeria’s oil-production per capita (OPPC) ranking compared to peers. By OPPC, Nigeria ranks the 2nd lowest among the group of oil-exporting African, OPEC and OECD countries.
This is not surprising, given that oil production in Nigeria has averaged 2mb/d since 2000 while population size has ballooned to c.200.0m in 2019. In basic terms, while a Nigerian is entitled to 0.01b/d or $0.6 per head, (at $60.0/b), individuals in peer countries are entitled to 185.1b/d or $166.6 per head on average. Clearly, Nigeria is anything but an oil-rich country, or maybe it used to be.
The way forward is for Nigeria to significantly increase oil production by removing constraints surrounding industry legislation (by implementing the PIB) which has halted new investments.
This has kept several Final Investment Decisions hanging and 409 oil fields existing without production activities taking place. Overall, the oil sector is like a treasure in a mire, which can be cleansed, to restore the sector to its former glory.
UNITED CAPITAL RESEARCH.