Nigeria’s Oil Output Still Short of Its True Potential, NNPCL Says

The Nigerian National Petroleum Company Limited has said the country’s oil production output is still falling short of its true potential despite its vast hydrocarbon reserves and recent gains in crude production.The Group Chief Executive Officer of NNPCL, Bayo Ojulari, stated this at the 4th Petroleum and Natural Gas Senior Staff Association of Nigeria Energy and Labour Summit in Abuja, where industry stakeholders gathered to examine ways of strengthening the country’s oil and gas sector.

He explained that though some progress had been recorded in stabilising production, Nigeria was yet to fully maximise the opportunities that exist in its reserves.

Ojulari emphasised that the gap between potential and actual output is a result of longstanding challenges such as crude theft, pipeline vandalism, high operating costs, and inadequate investment in infrastructure. According to him, every barrel of oil and every molecule of gas matters, and the only way to grow production sustainably is through a series of coordinated, incremental actions across the value chain.

He said the company was committed to improving operational efficiency, strengthening security in the Niger Delta, and addressing bottlenecks that have left several assets underutilised. He also highlighted the need for the government and private sector to work more closely in tackling oil theft, which has deprived the country of billions of dollars in lost revenue over the years.

Ojulari further explained that the enactment of the Petroleum Industry Act had provided a framework that could attract fresh investment, accelerate infrastructure delivery, and reposition the sector for growth if fully implemented. He noted that NNPCL was already aligning its operations with global Environmental, Social and Governance standards, while also focusing on gas development as Nigeria’s best pathway for energy transition.

The NNPCL chief added that efforts were ongoing to cut production costs significantly and channel savings into technology upgrades and field rehabilitation. He said the results of these reforms were becoming evident, as national production had risen from around 1.2 million barrels per day earlier in the year to about 1.8 million barrels per day in recent months.

Industry analysts have also linked the increase to improved security on key pipeline routes, better financing of joint ventures, and stricter governance controls. Despite this, Ojulari admitted that the figures were still below Nigeria’s medium and long-term ambitions of producing above two million barrels per day sustainably, and reaching as high as three million barrels per day by 2030.

On natural gas, he revealed that NNPCL was pursuing ambitious expansion plans to boost output to at least 10 billion cubic feet per day within the next decade. He said the move would support power generation, industrial growth, and exports, while positioning gas as the backbone of Nigeria’s energy future. He also reiterated that rehabilitation of the country’s refineries was ongoing, with a target to restore and expand local refining capacity to about 500,000 barrels per day.

Despite the optimism, experts have warned that the oil and gas industry still faces hurdles that may slow down progress. They point to persistent infrastructure gaps, regulatory uncertainties, and the pressure to cut carbon emissions in line with global climate commitments. There are also concerns that without rapid development of new reserves, production could stagnate or even decline in the coming decade.

Ojulari maintained that NNPCL was determined to address these challenges and rebuild confidence in the sector. He said the company had taken deliberate steps to improve transparency, including the regular publication of financial records and signing of agreements to unlock stranded assets. According to him, these efforts are meant to assure investors that Nigeria is serious about creating a competitive, commercially viable energy industry.

He added that sustained reforms, consistent implementation of the Petroleum Industry Act, and stronger collaboration with private partners would be critical to unlocking the country’s true potential. He stressed that gas development, security of oil-producing areas, and infrastructural renewal must remain at the centre of Nigeria’s energy agenda.

Industry observers say that while production levels remain below potential, recent progress indicates that the country is moving in the right direction. They believe that with political will, proper investment, and improved governance, Nigeria can close the gap between ambition and reality.

Ojulari concluded by saying that NNPCL’s long-term vision is to build a global energy company that delivers value to Nigerians and international partners, while driving sustainable growth in the domestic economy. He said the company would not relent until Nigeria takes its rightful place as Africa’s energy leader and a strong player in the global oil and gas market.