Nigeria’s Oil Output Hits 1.78mbpd But Still Falls Short of Budget Benchmark

Nigeria’s crude oil production has climbed to an average of 1.78 million barrels per day (bpd) in July, marking a significant improvement from earlier months, but still falling short of the 2.06 million bpd benchmark set for the 2025 budget.

The development, announced by Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), comes as the country intensifies efforts to recover from years of chronic underproduction caused by insecurity, oil theft, and underinvestment.

Speaking at an energy conference on Monday, Komolafe said the output gains were largely due to improved security operations in the Niger Delta region, where most of Nigeria’s crude is extracted. He noted that the government is still working to increase production to 3 million barrels per day, a long-held national target.

Komolafe said the current average stands at 1.78 million barrels per day, and this includes condensates, adding that the improvement stems from collaborative efforts with stakeholders to reduce losses and ensure transparency.

Nigeria, Africa’s top oil producer, depends on crude oil exports for about two-thirds of government revenue and over 80% of foreign currency earnings. Boosting production is therefore critical not just for revenue generation, but also for stabilizing the naira and financing government programs amid soaring inflation and rising debt service obligations.

However, analysts say the current production levels are far from sufficient. The 2025 national budget was drafted with a crude oil production benchmark of 2.06 million bpd — a target that remains elusive despite recent gains.

Adding to the pressure is Nigeria’s obligation to supply crude to the Dangote Refinery, which began operations this year. With its 650,000 bpd refining capacity, the refinery has had to source crude externally, including from the U.S. and other producers, because Nigeria’s domestic supply has remained inconsistent.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) reported that Nigeria’s average daily crude oil production rose to 1.505 million bpd in June, based on figures from Nigerian authorities. This marked a 3.58 percent increase from the 1.453 million bpd recorded in May and was the highest level since January. It also signaled that Nigeria met OPEC’s 2025 quota of 1.5 million bpd for the second time this year. However, OPEC’s secondary sources estimated slightly higher output at 1.547 million bpd.

In its latest performance report, the Nigerian National Petroleum Company Limited (NNPCL) said total crude oil and condensate sales dropped to 21.68 million barrels in June, down from 24.77 million barrels in May. However, gas production increased marginally to 7.581 billion standard cubic feet per day (bscf/d) from 7.352 billion bscf/d.

Despite the dip in crude sales, the downstream segment showed signs of recovery. Fuel availability at NNPC Retail Limited stations improved to 71 percent in June from 62 percent in May, pointing to better supply chain management.

The NNPCL also announced it made a profit after tax of N905 billion for June 2025 and posted a revenue of N4.571 trillion, buoyed by improved crude and gas production.

Still, the gap between actual production and the budgetary projection poses a risk to macroeconomic planning. Industry stakeholders and economists are urging the government to urgently address infrastructure gaps, end crude theft, and prioritize investment in upstream activities if the country is to meet its budgetary and energy obligations.

The broader implications, according to experts, include possible revisions to the budget or the need for additional borrowing, which could deepen Nigeria’s debt crisis and erode the limited gains being made in oil and gas.