Improved security, investment will aid Nigeria’s 2.06mbpd crude target — Report
Nigeria must address key challenges, including enhanced security, increased investment, and a robust regulatory framework, to meet its target of producing 2.06 million barrels of crude oil per day in 2025.
This is the conclusion of an analysis included in the “2025 Nigerian Budget and Economic Outlook” report by PricewaterhouseCoopers (PwC) International Limited.
The analysis suggests that achieving this target is feasible for three main reasons:
Nigeria’s current average production of 1.5 million barrels per day (mbpd) needs a 37% increase to meet the goal; Improvements in security, investment, and regulatory frameworks are necessary; Significant investments, such as those by Shell and TotalEnergies in the Bonga deepwater field and the Ubeta upstream, which were announced in late 2024, will likely contribute to production increases.
The report also highlights that Nigeria’s oil production levels and global oil prices will play pivotal roles in the country’s projected revenue growth.
“The FAAC allocation in 2025 will be driven by the outcome of the implemented fiscal reforms, exchange rate fluctuations, oil production levels, and global oil price,” the report states.
It is important to note that the Nigerian government has based the 2025 budget and the 2025-2027 Medium Term Expenditure Framework (MTEF) on a global oil price of $75 per barrel. PwC’s analysis suggests this benchmark is “most likely” achievable, as the global average oil price in 2024 was $78.05 per barrel.
However, the report points out that high oil prices are contingent on several factors, including increased demand from China, OPEC’s supply restrictions, and US shale production. Conversely, a supply surplus, which U.S. President Donald Trump has supported, could drive global prices down, potentially impacting Nigeria’s oil revenues.
The analysis also suggests that Nigeria could benefit from positive geopolitical developments, such as a ceasefire between Israel and Hamas, a potential ceasefire between Russia and Ukraine, and improved US-China relations. These factors could lead to more stable global trade and economic growth, reducing inflation and supporting Nigeria’s overall economic stability.
“The ceasefire in the Israel-Hamas war and the potential ceasefire between Russia and Ukraine are expected to drive favourable outcomes in global trade, enhancing economic stability and growth. Additionally, easing tensions in the South China Sea and improved US-China relations could strengthen global supply chains, reducing inflationary pressures and improving food security globally.”
The report underscores that stabilised conditions in the Middle East could also ensure steady oil supplies, potentially maintaining global oil prices and alleviating inflationary pressures.
As a globally integrated economy, Nigeria stands to gain from these developments, helping to manage imported inflation risks and support broader economic growth.
The report also calls for focused attention on issues such as security bottlenecks, social protection, and shock mitigation.
On security, the analysis highlights that Nigeria is grappling with significant challenges. Between January 2023 and March 2024, there were 4,520 violent incidents, including 2,329 attacks on civilians and 532 fatalities linked to kidnappings. The 5,356 criminal incidents and 836 farmer-herder clashes have particularly disrupted agriculture and local economies, especially in the North-Central and North-West regions.
“These security challenges are eroding investor confidence and diverting government resources from crucial development projects, further hindering economic progress,” the report states.
Furthermore, crude oil theft remains a major obstacle to Nigeria’s oil production targets, resulting in significant revenue losses for the country.
