Nigeria sets ambitious oil targets, sceptics abound

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Oil production platform

Oil production platform

Nigeria plans to produce 3 million barrels per day (bpd) of crude oil by 2015 and build three new refineries adding 445,000 bpd of capacity, the oil minister said on Wednesday, ambitious plans which have been promised before.

Analysts and oil executives doubt the plans are achievable.

Africa’s largest energy industry is struggling because a far reaching Petroleum Industry Bill (PIB) has been locked in dispute for four years, depriving it of billions of dollars in lost foreign investment, oil and government officials say.

“Our aspiration is to increase crude oil reserves to at least 40 billion barrels and production of 3 million barrels per day respectively by 2015,” Diezani Alison-Madueke told reporters at an investor conference in Lagos.

“Our current crude oil production is approximately 2.5 million bpd; current gas production is 8 million cubic feet per day.” Nigeria is a member of oil producing group OPEC, which sets output limits to monitor global supplies and prices.

Africa’s most populous nation has a crude oil OPEC output quota of 1.67 million bpd, which it seems happy to far exceed given a healthy oil price above $110 a barrel. Should oil prices decline, Alison-Madueke may have to explain plans to boost output to fellow OPEC countries.

She said the PIB may have to be presented back to the national assembly through the presidency to ensure the correct version is used. The main brake on the reforms is powerful vested interest but there are also several different versions of the proposal, which is slowing down lawmakers.

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