Nigeria's crude oil production experienced a setback in December 2025, declining at a time when the federal government is rolling out stringent new rules for its latest oil and gas licensing round.
Production Slip Amid OPEC Peers' Gains
According to data from the Organisation of Petroleum Exporting Countries (OPEC), Nigeria's output dropped to 1.422 million barrels per day (bpd) in December. This represents a decrease from the 1.436 million bpd recorded in November, marking a month-on-month decline of 14,000 bpd.
While the drop appears modest, it is significant as it interrupts a fragile recovery. More critically, the production level remains far below the nation's budgetary benchmark. The 2026 budget was premised on a production target of approximately 1.8 million bpd, leaving a shortfall of nearly 400,000 bpd.
The situation highlights a persistent challenge. Nigeria also struggled to meet its 2.06 million bpd target for 2025, ending the year at roughly 1.4 million bpd—over 600,000 bpd below that year's budget assumptions.
In contrast, several fellow OPEC members increased their output in the same period:
- Saudi Arabia added 34,000 bpd
- Iraq increased by 72,000 bpd
- Kuwait raised output by 11,000 bpd
- The United Arab Emirates (UAE) boosted production by 10,000 bpd
This comparative performance underscores Nigeria's ongoing struggle to optimise its oil sector output.
FG Unveils Strict Terms for 2025 Licensing Round
Concurrently, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has laid down rigorous conditions for participants in the 2025 oil and gas licensing round. The commission has made it clear that only serious, well-funded proposals with executable plans will be considered.
The evaluation framework will be strict, focusing on three core areas:
- Technical capability of the bidding company.
- Financial strength to fund the proposed work programmes.
- Demonstrable ability to execute commitments on time.
The NUPRC warned that all commitments made during the bidding process will be legally binding and will form the basis for regulatory monitoring after licenses are awarded. As part of its pre-bid conference promises, the commission committed to faster regulatory approvals, higher production security, credible licensing, and improved safety standards.
End of an Era: No More Licence Speculation
Echoing this tough new stance, the Minister of Petroleum Resources (Oil), Heineken Lokpobiri, declared that Nigeria will no longer tolerate the speculative acquisition of petroleum licences. He emphasised that oil and gas assets are not status symbols but national resources meant for development.
"Petroleum licences remain the property of the Federal Government," Lokpobiri stated. "They are issued strictly for development within defined timelines. Licences held without execution add no value to either investors or the Nigerian economy."
The minister outlined that investors will be judged solely on clear parameters: technical competence, financial capacity, and a proven ability to deliver. He firmly declared that the era of holding assets for mere speculation "is gone forever" in Nigeria.
Lokpobiri also issued a stern warning regarding post-bid negotiations. The government will not entertain requests for refunds, asset exchanges, or any discretionary remedies after bids are concluded, as such practices are not provided for under Nigerian law.
This dual development—declining production and a regulatory crackdown on non-performing assets—signals a pivotal moment for Nigeria's upstream oil sector, aiming to swap speculation for measurable, accountable production growth.
