Nigeria’s Oil Production Plummets: Seplat-ExxonMobil Deal Delay Costs $34bn in Lost Revenue

Nigeria has suffered a massive blow in its oil sector as the delayed divestment of ExxonMobil assets to Seplat Energy has led to a staggering $34 billion in lost revenue over the last two and a half years.

Minister of State for Petroleum Resources, Heineken Lokpobiri, revealed this alarming figure at the Second Quarter Dinner of the Petroleum Club in Lagos.

The assets under divestment, which were producing approximately 600,000 barrels per day (bpd), have seen a significant drop in output to a mere 120,000 bpd, leading to a shortfall of 480,000 bpd.

At an estimated conservative value of $80 per barrel, the cumulative loss amounts to $34 billion.

Lokpobiri emphasized that Nigeria has the potential to ramp up its oil production to five million barrels per day within the next 12 to 18 months.

He pointed out that the lack of investment in the Nigerian oil and gas industry over the past decade has contributed to the decline in production.

The minister further explained that resolving the issues hindering the divestment process could restore production to 600,000 bpd, adding an extra 480,000 bpd to Nigeria’s output.

With the addition of condensate, which is not included in OPEC’s computation, the country could achieve a total of two million barrels per day.

Lokpobiri stressed the importance of resolving the problems in the oil and gas sector to facilitate investment and boost the economy.

He highlighted the government’s commitment to attracting the necessary investment in the oil and gas sector, which is vital for the nation’s economic growth.

The minister also mentioned that only Nigeria and Ghana are currently in the running to host the African Energy Bank (AEB), with an initial capital of $5 billion that could grow to $120 billion within four to five years.

Nigeria’s economy stands to benefit significantly from the establishment of the bank in Abuja.

Nigeria’s oil production decline has led to substantial financial losses, highlighting the urgent need for investment and resolution of the issues hindering the divestment process.

The government’s commitment to addressing these challenges and attracting investment in the oil and gas sector is crucial for the country’s economic recovery and growth.