Nigeria’s oil sector is grappling with significant production shortfalls even as the government implements reforms aimed at revitalizing the industry. Under President Bola Ahmed Tinubu’s leadership, the administration has introduced policies designed to enhance production, attract investment, and improve transparency within the petroleum value chain.
Despite these efforts, Nigeria’s oil output remains below expectations. In 2024, the average crude oil and condensate output was 1.56 million barrels per day, falling short of the budget benchmark of 1.78 million barrels per day. In the first four months of 2025, production reached approximately 200.87 million barrels, missing the projected target by about 46.4 million barrels, resulting in an estimated revenue loss of $3 billion.
Infrastructure issues, such as delays in the rehabilitation of key refineries like the Port Harcourt Refining Company, have raised concerns about operational efficiency. Additionally, persistent problems with oil theft and pipeline vandalism continue to plague the sector, contributing to the decline in production levels.
The Tinubu administration’s “Renewed Hope” agenda aims to increase crude oil production to 2.6 million barrels per day by 2027 and four million barrels per day by 2030. The removal of petrol subsidies to deregulate the downstream sector has been praised by global financial institutions as a step toward fiscal sustainability.
Bashir Ojulari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), has set a target of reaching 1.9 million barrels per day by the end of 2025. While the government is making strides to reform the oil sector, significant challenges remain. Addressing production shortfalls, infrastructure issues, and security concerns will be crucial for realizing the full potential of Nigeria’s oil resources and ensuring economic recovery.
