Onome Amuge

Nigeria’s crude oil production slipped below its OPEC quota in August, breaking a two-month streak of compliance and raising fresh concerns over the reliability of Africa’s largest producer to stabilise output amid longstanding structural and security challenges.

The country pumped an average of 1.43 million barrels per day (mbpd) in August, according to figures from OPEC, a decline of 73,000 barrels from July’s 1.507 mbpd. The fall meant Nigeria undershot its quota of 1.5 mbpd by about 66,000 barrels, a reversal of gains that had lifted output marginally above OPEC’s ceiling in June and July.

The setback comes at a politically sensitive moment for President Bola Tinubu’s administration, which has trumpeted recent production gains as evidence that reforms and targeted initiatives are beginning to pay off. In June and July, when output briefly met the quota, officials declared Nigeria was on a credible path to lift crude output to 2 mbpd within two years and to 2.5 mbpd by 2026.

For investors and analysts, however, August’s numbers highlight the fragility of Nigeria’s oil rebound and the structural headwinds that have historically undercut production gains. Pipeline vandalism, oil theft, underinvestment in upstream assets, and delayed regulatory approvals have long conspired to limit Nigeria’s ability to translate reserves into steady production growth.

Nigeria’s production story this year has been marked by sharp swings. Output hit a high of 1.54 mbpd in January before slipping to 1.40 mbpd in March. It recovered to 1.48 mbpd in April and fell back to 1.45 mbpd in May, before jumping in June and July. The August decline has now reset the fragile momentum.

The government’s Project One Million Barrels Initiative, launched in 2024, had been billed as a turning point. Gbenga Komolafe, chief executive of the Nigerian Upstream Petroleum Regulatory Commission, said the scheme had reactivated dormant fields, accelerated regulatory approvals and boosted production to between 1.7–1.83 mbpd when condensates are included.

Komolafe and other officials insist the longer-term trend remains positive. “The increase of about 300,000 barrels per day in recent months confirms the government’s efforts to achieve the ambitious 2 mbpd target,” he argued.

But the August dip has raised questions about whether that optimism is premature.

Prior to this, Tinubu has set a bold production agenda, mandating the board of Nigerian National Petroleum Company Limited (NNPC) to raise output to 2 mbpd by 2027 and 3 mbpd by 2030, while also boosting gas output to 10bn cubic feet daily. At the inauguration of the NNPC board in May, new group chief executive Bayo Ojulari pledged to deliver on those goals, stressing that refineries were undergoing turnaround maintenance and that output had risen from 1.5 to 1.7 mbpd in a matter of months.

Ojulari promised: “We will deliver on our promise.”

The August reversal, according to industry analysts, indicates those promises will be difficult to keep without addressing the deeper constraints that have plagued Nigeria’s oil sector. Industry insiders point to underinvestment by international oil companies, who have increasingly shifted capital away from Nigeria due to governance issues, rising costs and security risks in the Niger Delta.

Despite the latest setback, Nigerian officials remain bullish. Petroleum minister Heineken Lokpobiri has repeatedly insisted that the country has the capacity to pump 3 mbpd with the right investments and security measures. Tinubu’s administration is betting that regulatory reforms under the Petroleum Industry Act and continued efforts to curb theft will eventually deliver.

But analysts warn that without significant new investment in upstream exploration and infrastructure, alongside sustained reforms in governance and security, Nigeria risks being left behind in an oil market increasingly shaped by energy transition dynamics and rising competition from other African producers.