October 23, 2025/CSL Research
Nigeria plans to demand a higher oil production quota at the next meeting of the Organisation of Petroleum Exporting Countries (OPEC) scheduled for November, according to the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri. The Minister explained that Nigeria’s current OPEC quota of about 1.5 million barrels per day (mbpd) no longer reflects the country’s true production capacity. The move signals the government’s determination to reposition the oil sector as a stronger contributor to national revenue and foreign exchange earnings. In recent years, Nigeria has consistently fallen short of its OPEC production quota, hindered by deep-rooted structural and security challenges.
Crude oil theft, pipeline vandalism, and large-scale illegal bunkering have been major factors undermining output. These illicit activities have caused substantial losses, severely eroding government revenue and foreign exchange earnings. Frequent shutdowns of key pipelines and export terminals due to sabotage have further constrained production, leading to lower export volumes and weakened fiscal stability. Since oil remains the dominant source of Nigeria’s export earnings and a key contributor to government revenue, these disruptions have significantly weighed on the economy and reduced fiscal flexibility. To address these
challenges and restore Nigeria’s position as Africa’s leading oil producer, the Federal Government has set a short-term production target of 2.5 mbpd by 2026. By seeking a higher OPEC quota, Nigeria aims to secure more production headroom to accommodate expected output growth and to better align its quota with its 2026 target.
In recent months, there have been positive developments in investment commitments that could help Nigeria achieve its 2026 target. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has introduced incentives to accelerate project approvals, revive dormant oil fields, and attract fresh investments in deep-water exploration. Major international oil companies are reportedly in talks to inject billions of dollars into upstream development, infrastructure rehabilitation, and asset revitalization projects. These efforts, if sustained, could help lift production and strengthen Nigeria’s case for an increased OPEC
quota.
However, notable risks remain. The entrenched problem of crude oil theft and vandalism continues to pose a serious threat to production recovery. Operational delays, regulatory bottlenecks, and rising project costs could also hinder progress. Additionally, crude oil production fell to 1.39 million barrels per day (mbpd) in September, representing a decrease of 44,576 barrels from the 1.43 mbpd recorded in August 2025, the second consecutive month of falling crude output, with production remaining below Nigeria’s OPEC+ quota of 1.5 mbpd.
When condensates are included, total oil production slipped to 1.58 mbpd in September, compared to 1.63 mbpd in August. These figures fall well below the Federal Government’s short-term target of 2.06 mbpd and 2.5 mbpd for 2025 and 2026, and below our in-house projections of 1.69 mbpd and 1.77 mbpd for 2025 and 2026. This underscores the significant hurdle to be crossed by the government in maximizing any expected increase in production quota, as persistent structural and security challenges continue to present significant downside risks.
Click here to download full report: CSL Nigeria Daily – 23 October 2025 – Crude Oil.pdf
