Nigeria: Nigerian oil production rises in December
Latest reading: Brent crude oil prices averaged USD 73.23 per barrel in December, down 0.4% from November. On 31 December, the commodity traded at USD 74.74 per barrel, up 2.1% from 29 November. Prices remained broadly steady as trading volumes fell due to the holiday period.
Turning to production, Nigerian oil output increased to 1.51 million barrels per day (mbpd) in December from 1.48 mbdp in November. Nonetheless, production remained below its 10-year average of 1.55 mbpd.
In other news, in December, Nigeria approved the sale of Shell’s onshore and shallow-water assets worth USD 2.4 billion to Renaissance Group. The exit forms part of a broader exodus of Western energy companies from Nigeria’s onshore sector. Meanwhile, the country recently stated that all applicants for oil licenses must prove low carbon emissions from 1 January onwards before receiving approval.
Outlook: Oil production is projected to increase in 2025 from 2024, and to reach its highest level since 2020. Rising capacity in the Dangote refinery will buttress crude demand in Nigeria, prompting an increase in output. That said, the country’s production is expected to fall short of its OPEC+ quota of 1.50 mbpd, hampered by the uncertain domestic regulatory environment and a precarious security situation. Renewed turmoil in the oil-producing Niger Delta poses a key downside risk.