August 25, 2025/CSL Research

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced last week that the country is aiming to ramp up crude oil production to 2.5 million barrels per day (mbpd) by 2026. According to the regulator, this goal will be driven by a mix of strategies, including unlocking untapped deepwater assets, reviving dormant onshore and offshore fields, and fast-tracking approvals for pending upstream projects. If realized, this would represent one of the most significant increases in Nigeria’s oil production in more than a decade. At present, Nigeria’s crude production levels remain well below this ambitious goal.

Over the past five years, Nigeria’s crude oil output has averaged just 1.57 mbpd, a level weighed down by structural challenges, most notably underinvestment in exploration and production, as well as persistent security concerns such as crude oil theft, pipeline vandalism, and militancy in the Niger Delta. These challenges have prompted several international oil companies (IOCs) to divest from onshore assets in favour of deepwater projects. That said, production trends have improved over the past 18 months, with output averaging around 1.68 mbpd so far this year. We attribute this recovery to government efforts to curb oil theft, particularly through enhanced security surveillance of key pipelines, which have helped stabilise supply. In addition, the enactment of the Petroleum Industry Act (PIA) has provided greater regulatory clarity and new incentives for upstream operators, which we expect will help reignite investor confidence over the medium to long term.

Nonetheless, we remain cautious about the likelihood of reaching the 2.5 mbpd target in the near term. Given persistent structural and security challenges, we project crude oil production to average around 1.77 mbpd next year, a modest improvement from current levels but still well below the government’s goal. Achieving 2.5 mbpd will require sustained progress over several years, underpinned by greater IOC participation in deepwater projects – where more than 20 assets have been identified with the potential to add about 810kbpd – as well as renewed exploration by local operators to revive stranded and recently acquired onshore fields. 

Click here to download full report: CSL Nigeria Daily – 25 August 2025 – Oil.pdf​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​