Nigeria’s Crude Production Averages 1.46mbpd, Falls Short of OPEC Target

Nigeria’s crude oil output averaged about 1.46 million barrels per day, remaining below the production benchmark allocated by the Organisation of the Petroleum Exporting Countries, according to recent industry data. The shortfall highlights persistent operational and structural challenges in the country’s upstream oil sector, despite ongoing efforts to boost production and meet OPEC targets.

The OPEC benchmark for Nigeria is higher than the current production level, and consistently falling short of this quota has raised concerns among policymakers and industry stakeholders. Crude oil remains Nigeria’s largest source of export revenue and foreign exchange earnings, making production levels critical to fiscal stability and economic performance.

Industry figures indicate that production during the period was affected by a combination of factors, including pipeline vandalism, crude theft, ageing infrastructure and technical shutdowns. Although security interventions and surveillance measures have helped reduce losses in some areas, the impact of years of underinvestment continues to weigh on output.

Oil theft remains a major concern, with large volumes of crude lost daily through illegal connections and sabotage. These activities not only reduce production but also discourage investment, as operators face higher operating costs and security risks. Authorities have intensified efforts to curb theft, but stakeholders say sustained results will take time.

Maintenance and technical issues also contributed to the production shortfall. Several oil fields and pipelines require rehabilitation, and scheduled maintenance activities temporarily reduced output. Industry experts note that while maintenance is necessary to ensure long-term reliability, it often leads to short-term production dips.

Despite the challenges, there have been signs of gradual improvement compared to previous lows. Production levels have recovered from earlier declines, reflecting some success in security efforts and operational adjustments. However, analysts say the pace of recovery remains slow relative to Nigeria’s potential capacity.

The production gap has implications for government revenue, as lower output translates to reduced oil earnings. With Nigeria’s budget still heavily reliant on oil revenue, persistent underperformance against OPEC targets could strain fiscal projections and increase pressure on alternative revenue sources.

Lower production also affects foreign exchange inflows, contributing to pressure on the naira and external reserves. Oil exports remain a key source of dollar inflows, and any sustained shortfall complicates efforts to stabilise the foreign exchange market.

The Nigerian National Petroleum Company Limited has acknowledged the challenges affecting production and said it is working with joint venture partners and security agencies to address them. The company has highlighted ongoing investments in pipeline security, asset integrity and production optimisation.

Regulatory authorities have also emphasised the need for increased investment in the upstream sector. While the Petroleum Industry Act has improved regulatory clarity, investors remain cautious due to security concerns and historical uncertainties. Restoring investor confidence, experts say, is critical to boosting output.

OPEC production quotas are designed to balance global oil supply and stabilise prices. Nigeria’s inability to meet its allocated benchmark not only affects national revenue but also reduces its influence within the cartel. Persistent underproduction can weaken the country’s standing in OPEC discussions.

Analysts note that meeting OPEC targets requires more than security measures. Sustained investment in exploration, development and enhanced oil recovery is needed to offset natural decline in mature fields. Without new investments, output is likely to remain constrained.

The role of marginal fields and indigenous operators has also come under focus. While local companies have taken over several assets previously operated by international oil companies, many face financing and technical challenges that limit production growth.

Gas production has fared relatively better, supported by domestic demand and export commitments. However, gas revenue cannot fully compensate for lost crude oil earnings, especially given the scale of Nigeria’s oil exports.

Energy transition trends and global decarbonisation efforts add another layer of complexity. As some international investors shift away from fossil fuels, securing long-term financing for oil projects has become more challenging. This makes it even more important for Nigeria to improve the attractiveness of its upstream sector.

Stakeholders have called for a coordinated approach involving government, regulators, operators and host communities. Addressing security issues, improving infrastructure and ensuring community engagement are seen as critical to sustaining production gains.

There are also calls for faster implementation of reforms under the Petroleum Industry Act, particularly those related to fiscal terms and host community development. Clear and predictable policies, analysts say, can help unlock investment and boost output.

Despite falling below the OPEC benchmark, experts believe Nigeria has the capacity to significantly increase production if structural challenges are addressed. The country has substantial reserves and undeveloped fields that could be brought on stream with the right investment climate.

Looking ahead, production performance will depend on the effectiveness of security interventions, infrastructure rehabilitation and investor confidence. Meeting OPEC targets would not only improve revenue but also strengthen Nigeria’s position in the global oil market.

For now, the average output of 1.46 million barrels per day underscores the scale of the challenge facing Nigeria’s oil sector. While progress has been made from earlier lows, sustained effort and investment will be required to close the gap with OPEC benchmarks and unlock the full potential of the country’s hydrocarbon resources.