Efforts by the federal government to ramp up crude production has begun to yield significant results, with oil theft now reduced to as low as 5,000 barrels per day at the end of Q4, 2024, from a high of up to 108,000 bpd in Q1 of 2022.
The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, disclosed this at the weekend, while speaking at the ‘Renewed Hope Global Town Hall Conference’ in Abuja.
It is also a major boost for the 2025 budget as Nigeria aims to produce 2.06 million barrels per day this year, at an international crude oil price of $75 per barrel. The country also aims to reduce deficit financing for the over N54 trillion budget this year.
Nigeria has long battled to end oil theft and pipeline vandalism in the Niger Delta, where it gets its crude, which accounts for up to 80 per cent of its annual export and as much as that percentage in foreign exchange earnings.
Nigeria’s oil theft and pipeline vandalism problem remains a long-standing issue that has severely impacted the country’s economy, security, and environment. The Niger Delta region, which produces most of Nigeria’s crude oil, has been a hotspot for these illegal activities.
The problem of stolen crude is further exacerbated in Nigeria because of the international connection and weak law enforcement, as some of the oil is sold to refineries abroad, creating a lucrative underground market for foreign buyers.
Nigeria loses billions of dollars annually due to oil theft, reducing government revenue and foreign exchange earnings. Oil spills from vandalised pipelines also pollute water bodies, destroy farmlands, and harm biodiversity.
To salvage the situation, the federal government has recently taken some measures, including deploying more military forces and surveillance technology, giving out pipeline protection contracts to local private security firms, like those led by ex-militants, making arrests and continuing to destroy illegal refineries as well as investment in monitoring systems.
But at the Abuja event, Komolafe stated that due to the renewed onslaught on oil theft, crude production in Nigeria now averages 1.75 million barrels per day, with gas production now hitting 7 billion standard cubic feet per day (scfd).
“Oil theft averaged 108,000 bpd in Q1, 2022 resulting in the shutdown of trunklines (TNP, TFP, NCTL etc). Production dropped to as low as l million bpd in September 2022 (loss of c. 600, 000 bpd) due to the shutdown of the trunk lines.
“Oil theft has significantly reduced due to the ongoing kinetic and non-kinetic intervention by the government. The oil theft which averaged about 12,000 bpd in the last 24 months further reduced to 5,000 bpd in the last quarter.
“Whereas the production fluctuated around 1.5 million bpd, the sustained fight against oil theft has resulted in steady increase in production. We were able to restore and sustain the production to 1.7 bpd. Efforts are ongoing to increase the production by l million bpd by December 2026,” Komolafe stated.
At the peak of oil theft in 2023, some of those who expressed outrage included: The General Overseer of the Redeemed Christian Church of God (RCCG), Enoch Adeboye as well as the Chairman of Heirs Holdings, Mr Tony Elumelu, an investor in the sector.
However, at the event, Komolafe emphasised the need for a paradigm shift to position Nigeria as a leader in energy security and economic growth, highlighting several reforms and achievements in Nigeria’s oil and gas sector.
On Nigeria’s oil and gas potential and global positioning, he noted that Africa accounts for five of the world’s top oil-producing countries, and that the country stands as the continent’s second-largest oil reserve holder.
In the same vein, he stated that Nigeria has the largest gas reserves standing at 209 Trillion Cubic Feet (TCF), with oil reserves estimated at 37.5 billion barrels.
The NUPRC boss stated that since the enactment of the Petroleum Industry Act (PIA) in 2021, the commission had driven several initiatives to enhance regulatory effectiveness and attract investments.
The commission, he said, unveiled its 10-year regulatory and corporate strategic plan (2023–2033) in May 2023, followed by a regulatory action plan for 2024, detailing key industry reforms.
These reforms, according to him, focus on increasing oil and gas reserves and production, enhancing hydrocarbon accounting transparency and achieving cost efficiency and decarbonisation in upstream operations.
Besides, the NUPRC boss noted that the reforms were ensuring stability in host communities, and reducing the carbon footprint of oil and gas activities.
On the 2024 licensing round and investment drive, Komolafe highlighted that NUPRC launched its 2024 round, offering 24 oil and gas assets to investors, explaining that to attract global participation, the commission held roadshows in Houston, Miami, London and Paris, showcasing Nigeria’s energy potential.
Looking ahead, he said the government aims to increase production by 1 million bpd by December 2026 under the ‘Project 1 MMBOPD Initiative’, leveraging collaboration among operators, service providers, financiers and host communities.
Shedding light on the Nigeria Gas Flare Commercialisation Programme (NGFCP), the NUPRC chief executive assured that the project remains at the forefront of the country’s energy transition strategy.
According to him, it aims to eliminate routine gas flaring, reduce methane emissions, and encourage carbon capture technologies. Additionally, the carbon credits earning framework, he stressed, seeks to monetise decarbonisation efforts while promoting sustainable energy practices.
Giving a brief on revenue growth and financial performance, coupled with industry challenges, he mentioned that NUPRC has consistently exceeded revenue targets. In 2024, the commission, Komolafe said, outperformed its budgeted revenue collection by 84 per cent, marking a strong financial performance for Nigeria’s upstream sector.
To ensure fiscal transparency, the NUPRC, he said, has implemented regulations on hydrocarbon metering, fiscal oil price determination, and cargo declaration systems to curb revenue leakages and crude oil theft.
Speaking on host community engagement and regulatory transparency, the commission, he explained, has incorporated 137 Host Community Development Trusts (HCDTs) to foster local participation and stability in oil-producing regions.
Furthermore, the Alternative Dispute Resolution Centre (ADRC), according to him, has been established to resolve conflicts efficiently, reducing disruptions to oil and gas operations.
In light of all these developments, Komolafe emphasised that Nigeria was more ready for business than ever, citing the government’s commitment to regulatory certainty, investment-friendly policies, and global competitiveness.
“With a stable political environment, a growing gas economy, and a clear roadmap for energy transition, Nigeria positions itself as a prime destination for energy investments in Africa,” he added.
He further reaffirmed NUPRC’s commitment to collaborating with global investors, financiers, and energy stakeholders to unlock the nation’s full hydrocarbon potential while driving sustainable development in Nigeria.
According to him, N261.8 billion has so far been remitted to host communities, who at the last count had 138 incorporated trusts and 83 settlers.
