Nigeria Experiences Decline in Crude Oil Production Amidst Gas Production Surge
Nigeria’s crude oil production dipped in February 2026, even as gas production continued its upward trend and the Nigerian National Petroleum Corporation Limited (NNPCL) reported robust financial performance during the same period.
The latest monthly report from NNPCL, released on Saturday, reveals that crude oil and condensate production fell to 1.51 million barrels per day (mbpd) in February, down from 1.64 mbpd in January. This decrease continues the erratic fluctuations witnessed in Nigeria’s oil output over the past year.
The decline from January’s production levels underscores ongoing instability within Nigeria’s upstream sector, raising concerns about the reliability of the country’s oil infrastructure.
Graphical analyses accompanying the report suggest that production may hit a peak of approximately 1.7 mbpd by mid-2025, before experiencing a gradual decline into early 2026. These projections highlight the precarious nature of Nigeria’s crude oil output.
The current production figure of 1.51 mbpd reflects persistent obstacles, such as pipeline issues and operational disruptions, despite various initiatives aimed at stabilizing output. While upstream pipeline availability stands at 93%, indicating a degree of operational reliability, it has not been sufficient to counteract the production downturn.
According to NNPCL Chief Executive Officer Bashir Ojulari, domestic crude production has improved significantly from historic lows recorded in 2022, thanks to initiatives focused on enhancing pipeline safety and combating oil theft.
Ojulari noted that crude production is anticipated to rise from roughly 960,000 barrels per day in 2022 to an average of 1.71 million barrels per day, peaking at 1.84 million barrels per day in 2025. This positive development is largely attributed to the Integrated Energy Security Framework, which aims to protect the oil infrastructure in the Niger Delta region.
Gas Production Sees Significant Recovery
In stark contrast to the drop in crude oil output, Nigeria’s gas production experienced a substantial increase in February, reaching 7.458 billion standard cubic feet per day (mmscfd). This level marks one of the highest readings in recent years, emphasizing the growing role of gas in Nigeria’s energy landscape.
Gas sales also remained robust at 4,893 mmscfd, indicative of strong demand and increased supply capabilities. This trend aligns with Nigeria’s broader strategy to position gas as a transitional fuel that can facilitate both energy security and economic stability.
In January, NNPCL unveiled the Gas Master Plan (GMP) 2026, which aims to bolster industrial growth and energy resilience. This plan builds upon the foundation laid by the 2008 Nigeria Gas Master Plan, designed to optimize returns from Nigeria’s abundant gas resources. A notable aspect of GMP 2026 is its alignment with the Nigerian Gas Program Decade, expected to serve as the definitive framework for coordinated gas sector development over the next decade.
Financial Performance Remains Strong
Financially, the national oil company reported a revenue of N2.68 trillion for February, reaffirming its crucial role in contributing to government finances. The company achieved a profit after tax of N136 billion, showcasing its ability to generate earnings despite challenges in oil production.
In terms of statutory payments, NNPCL contributed N1.804 trillion to government coffers, further underscoring its significance in the national economy. However, the report revealed mixed results in downstream operations, with petrol availability at NNPC retail locations standing at 58%, pointing to ongoing distribution challenges in the domestic market.
Nevertheless, critical pipeline infrastructure showed solid performance, with the Obiahu-Obrikom-Oben (OB3) pipeline operating at 96% availability and the Ajaokuta-Kaduna-Kano (AKK) pipeline at 93%. These figures highlight progress in essential gas infrastructure projects that are vital for long-term energy security.
Sales Performance Shows Variability
Crude oil and condensate sales fluctuated significantly from month to month, with February sales totaling 23.08 million barrels. Although this reflects moderate performance, it falls short of the peak levels reached in late 2025, primarily due to reduced production rates. However, sustained strength in gas sales signifies the effectiveness of production enhancements during this period.
Strategic Focus and Future Outlook
In a brief statement accompanying the report, NNPCL emphasized its commitment to bolstering production resilience through improved asset reliability, swift resolution of operational challenges, and enhanced collaboration with industry stakeholders. The company also underscored the importance of major gas infrastructure projects, particularly the AKK and OB3 pipelines, which are instrumental in increasing domestic gas supply.
The insights from February’s report paint a complex yet informative picture of Nigeria’s energy sector. While oil production continues to face significant challenges, gas has emerged as a crucial pillar, supporting revenue growth and facilitating the nation’s energy transition goals. Experts suggest that Nigeria’s immediate energy future may hinge more on effective utilization of its vast gas resources than solely on oil recovery.
In recent months, the Nigerian government has increasingly encouraged investments in the oil and gas sector. Major players like Shell and ExxonMobil have announced substantial investment plans, reflecting growing confidence in the government’s policy direction and initiatives.
