Oil producers in West Africa, particularly Nigeria and Angola, have had a difficult year, marked by production interruptions, chronic under-investment, security problems and oil theft. These challenges have hampered the achievement of the ambitious targets set for 2023, notably the increase in oil production and the reopening of refineries.
Despite efforts to increase production by 2023, Nigeria and Angola have only managed to stabilize their output. Nigeria produced an average of 1.4 million barrels per day (b/d), while Angola reached 1.1 million b/d. Insufficient investment, particularly in exploration, has been a major problem, with the major oil companies leaving for new horizons such as Namibia and Guyana.
Security Issues and Political Implications
Oil theft in Nigeria’s Delta region continues to cost around 400,000 b/d. In addition, the risk to investors is increasing due to regional political instability. OPEC+ reduced production quotas in Nigeria, Angola and the Republic of Congo, putting further pressure on these already fragile economies.
West African producers also had difficulty selling their oil. Nigeria produces light, sweet crude oil, while Angola produces heavy, slightly sweet grades. Increased competition from US exports and changes in global demand have affected the market performance of these grades.
Challenges for 2024
Priorities for Nigeria include reducing oil theft, investing in infrastructure and gas, and implementing investor-friendly reforms. Angola, for its part, must continue to improve its investment climate. Increased refining capacity could also reduce dependence on imports of volatile fuels.
2024 promises to be a crucial year for the West African oil industry. With persistent challenges but opportunities for reform and investment, the sector can look forward to a turnaround, despite current obstacles.
