Minister of State for Petroleum Resources (Oil) Heineken Lokpobiri says reforms introduced by the Tinubu administration have increased Nigeria’s crude oil production by more than 80 per cent. He spoke in Yenagoa at a breakfast meeting themed “Counting the Gains of the Oil Sector Reforms Under President Bola Tinubu.”
Lokpobiri said Nigeria was producing less than one million barrels per day of crude oil and condensate when the administration assumed office in 2023. Production has since risen to 1.824 million barrels per day, including condensate, according to the latest weekly report of the Nigerian Upstream Regulatory Commission. “Condensate is not counted by OPEC,” Lokpobiri said. “As of the last weekly report from NUPRC, we are producing 1,824,000 barrels per day inclusive of condensate. That is over 80 per cent from where we started in 2023.”
The increase was achieved through the concerted efforts of stakeholders in the oil and gas industry, he said. Nigeria previously had fewer than 10 active drilling rigs and had recorded no seismic activity for more than two decades. The number of active drilling rigs has now risen to more than 70. Drilling a well costs between $25 million and $30 million onshore and between $80 million and $100 million offshore.
Lokpobiri also claimed that Nigeria, which recorded virtually no oil and gas investment for more than a decade before the Tinubu administration, now accounts for about 60 per cent of oil and gas investments coming into Africa. He attributed the development partly to the approval of divestments by Shell to Renaissance and ExxonMobil to Seplat, which unlocked investments in Bonga North, Bonga South-West and Zabazaba fields.
Indigenous oil companies now account for about 60 per cent of Nigeria’s crude oil production, compared with the period when international oil companies produced about 90 per cent. On subsidy removal, Lokpobiri said the Federal Government had previously spent about ₦18.4 billion daily on subsidy when the exchange rate was ₦448 to the dollar. That amounted to about $15 billion annually, or approximately ₦21 trillion at an exchange rate of ₦1,400 to the dollar. Monthly FAAC allocations have increased from less than ₦600 billion to more than ₦2 trillion.
This mirrors the transformation of Nigeria’s upstream sector since the Petroleum Industry Act of 2021. The divestment approvals and the shift to indigenous operators have changed the ownership structure of Nigerian oil production. The question is whether the production gains are durable. Higher output is a function of investment, security and maintenance. If rigs remain active and investment flows continue, the gains can hold.
Winners and Losers
Winners: Indigenous oil companies, which now produce 60 per cent of Nigeria’s crude. The Federal Government, which gains increased FAAC revenue. Service companies, which benefit from increased drilling activity.
Losers: Communities in oil-producing areas, which continue to bear environmental and social costs. Future generations, whose oil inheritance is being depleted without equivalent investment in renewable energy. Consumers, who face higher pump prices after subsidy removal.
Bottom Line: Production is up. Rigs are active. Investment is flowing. The gains are real. The test is whether they survive the next price cycle and the next security challenge.