Nigeria’s Oil Production Rises 80% as Drilling Activity and Investment Gather Pace

Nigeria’s crude oil production has increased by more than 80 per cent over the past three years, reaching about 1.824 million barrels per day including condensate, according to the Minister of State for Petroleum Resources, Heineken Lokpobiri.

Lokpobiri disclosed the figure during an interaction with media organisations in Bayelsa State, attributing the increase to renewed activity and investment across the petroleum industry.

According to the minister, Nigeria was producing less than one million barrels per day of crude oil and condensate when the current administration took office in 2023. He said production has since climbed to the latest level reported by the Nigerian Upstream Petroleum Regulatory Commission.

The increase comes against the background of efforts to revive upstream investment and increase drilling activity. Lokpobiri said the number of active drilling rigs has risen from fewer than 10 when the administration began to more than 70.

The minister also pointed to major developments involving international and indigenous oil producers, including projects associated with Shell, ExxonMobil and other operators, as evidence of renewed activity in Nigeria's upstream sector.

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Higher production gives Nigeria a stronger opportunity to increase crude exports and generate more petroleum revenue. However, the economic value of additional barrels will depend on how efficiently the country converts higher output into government revenue, investment and broader industrial activity.

Production growth alone does not automatically translate into stronger public finances or improved household welfare.

Nigeria still has to contend with production costs, infrastructure requirements, security concerns and the need to attract enough long-term capital to maintain output.

The increase in active rigs is particularly significant because drilling activity is closely connected to the ability to replace declining production and develop new reserves.

A sustained increase in rigs could support more exploration, well development and field expansion if investors have sufficient confidence in the regulatory and operating environment.

The challenge will be maintaining that activity beyond the current recovery period.

Oil companies commit substantial capital to drilling and production, meaning policy consistency, regulatory certainty and security will remain important to the industry's investment outlook.

The changing composition of Nigeria's oil industry is another development worth watching.

Lokpobiri said indigenous companies now account for about 60 per cent of local crude production, compared with the historical dominance of international oil companies.

That shift could create opportunities for Nigerian companies to build deeper capabilities across exploration, production, oilfield services and related industries.

It could also increase the importance of domestic financing and technical capacity as more Nigerian-owned businesses take larger positions in the upstream sector.

Nigeria's oil production recovery is important, but the next test is what the additional barrels achieve for the wider economy.

Higher output can strengthen export earnings, support government revenue and improve the viability of new upstream investments. It can also provide more feedstock for domestic refineries if sufficient crude is supplied locally.

For the recovery to become durable, however, Nigeria needs to keep attracting investment, reduce avoidable production costs and maintain the infrastructure required to move crude from fields to export terminals and domestic refineries.

The rise to 1.824 million barrels per day therefore represents more than a production statistic. It is a sign that activity has returned to parts of Nigeria's upstream industry. The bigger challenge now is ensuring that the additional production becomes sustained investment, stronger domestic capacity and greater economic value for the country.