Nigeria’s crude oil production fell short by 93.74 million barrels between January and August 2025, jeopardizing funding for the national budget. The deficit represents approximately $6.85 billion in lost revenue based on average prices, or $7.03 billion measured against the government’s $75 per barrel benchmark.
Production Data Reveals Critical Gap
Central Bank of Nigeria reports show Bonny Light crude averaged $73.06 per barrel during this period. Nigerian Upstream Petroleum Regulatory Commission data indicates total production reached 406.84 million barrels – falling 18.27% short of the 500.58 million barrel target. Daily output averaged 1.673 million barrels versus the budgeted 2.06 million barrels.
Quarterly Deficits Worsen
The shortfall reached 35.01 million barrels ($2.625B) in Q1 2025. Q2 saw another 34.67 million barrel deficit ($2.592B). The crisis deepened in Q3 with July and August shortages of 10.78 million ($808.5M) and 13.28 million barrels ($996M) respectively.
Revenue Impacts and Projections
If trends continue, Nigeria risks losing an additional 47.58 million barrels ($3.56B) by December. NUPRC reported a ₦459.6 billion revenue gap for August alone against its ₦1.2 trillion target. Combined July-August remittances showed a ₦941.23 billion shortfall.
Total January-August transfers to the Federation Account stood at ₦5.475 trillion – significantly below the ₦8.433 trillion projection. Royalty collections particularly underperformed, with August realizing ₦682.28 billion versus ₦1.144 trillion targets.
Expert Warnings and Government Response
Industry specialists describe government targets as unrealistic. Zera Advisory’s Joe Nwakwue noted: “Volume growth takes time and resources. Current trends make both volume and price targets unlikely.” AHA Consultancies CEO Henry Adigun criticized “repetitive mistakes” in projections that force borrowing.
Petroleum Minister Heineken Lokpobiri maintains the 2 million barrel daily target remains achievable. He highlighted the upcoming $5 billion Africa Energy Bank to address financing challenges. NUPRC Chief Gbenga Komolafe revealed plans to increase production to 2.5 million barrels daily by 2027 through approved Field Development Plans.
Pathway to Recovery
Experts emphasize resolving insecurity, sabotage, and regulatory issues. Former SPE Chairman Nwakwue urged collaboration on “sustainable JV funding and regulatory certainty.” Energy economist Prof. Wumi Iledare projected potential production increases to 1.8 million barrels with Petroleum Industry Act implementation, noting Nigeria’s reserves could support 3 million daily barrels.
Without production improvements, the ₦28.7 trillion 2025 budget faces financing gaps potentially requiring borrowing or spending cuts.
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