Nigeria has recently exceeded its OPEC crude oil production quota by over 70,000 barrels per day, signaling renewed momentum in the country’s oil sector.
This milestone reflects the impact of improved pipeline surveillance, security enhancements, and renewed investor interest in Nigeria’s petroleum industry.
The Nigerian government has announced plans to ramp up production to 2.4 million barrels per day by the end of 2025.
Officials attribute this ambition to better management of oil infrastructure and a growing number of domestic and foreign investments in the upstream oil space.
While increased output marks a notable win for the economy, experts caution that structural challenges, from limited job creation to weak demand for exports, still pose serious threats to the industry’s long-term stability.
Shell’s Exit and the Rise of Renaissance Africa Energy
One of the most significant developments in Nigeria’s oil sector is the $2.5 billion acquisition of Shell Nigeria’s onshore assets by Renaissance Africa Energy Company Limited.
This deal, finalized in March 2025, signals the end of Shell’s nearly 100-year presence in Nigeria’s onshore oil operations.
The Renaissance Group, a consortium of five companies, now owns Shell’s local operations, which include assets containing 6.73 billion barrels of oil and condensates and over 56 trillion cubic feet of gas.
Initially, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) blocked the transaction in October 2024, citing concerns about the consortium’s capacity to manage the massive portfolio.
However, approval was eventually granted in December 2024 by Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, under the guidelines of the Petroleum Industry Act (PIA).
Speaking on the acquisition, Tony Attah, CEO of Renaissance, expressed the company’s ambition to become Africa’s leading oil and gas firm.
He emphasized Renaissance’s vision to drive energy security and industrialization across the continent.
Nigeria’s Top Oil-Producing States: A Closer Look
According to new data from the Nigerian Upstream Petroleum Regulatory Authority (NUPRC), the top 10 oil-producing states in Nigeria are:
Akwa Ibom – 504,000 barrels/day
Delta – 346,000 barrels/day
Rivers – 344,000 barrels/day
Bayelsa – 290,000 barrels/day
Ondo – 90,000 barrels/day
Lagos – 40,000 barrels/day
Edo – 33,000 barrels/day
Imo – 17,000 barrels/day
Abia – 11,000 barrels/day
Anambra – 3,000 barrels/day
These states collectively account for the majority of Nigeria’s daily oil production, helping to sustain government revenue and attract foreign capital.
Challenges Persist Despite Rising Output
Despite Nigeria’s recent production gains, serious challenges remain.
In March 2025, reports showed that crude oil cargoes scheduled for delivery were stranded at sea and unsold.
As of March 10, twelve March-loading cargoes had yet to find buyers, revealing weak demand in the global oil market.
Traders blamed the slow sales on fierce competition from Kazakh CPC Blend, US WTI, and Mediterranean sweet crude, especially in Europe, one of Nigeria’s key export markets.
Additionally, the industry’s capital-intensive nature means it generates relatively few jobs, especially when compared to agriculture or manufacturing.
High unemployment in oil-rich states continues to fuel youth frustration and social unrest—a recurring issue that further complicates the sector’s outlook.
Conclusion: Growth With Caution
Nigeria’s recent success in surpassing its OPEC quota and sealing historic asset transfers, such as the Shell-Renaissance deal, reflect renewed energy in the oil sector.
The country is clearly making strides in output and investment, thanks to improved security and policy reforms under the Petroleum Industry Act.
However, the sector still battles weak global demand, structural unemployment, and logistical inefficiencies.
As Nigeria looks to hit its ambitious 2.4 million barrels per day target by the end of 2025, policymakers must address these risks head-on.
For now, the Nigerian oil sector stands at a crossroads—celebrating short-term gains, while preparing for long-term reforms.
