Nigeria’s Oil Production Challenge: Why “Every Barrel Counts” in the Push for Energy Growth

Image of NNPC Tower, Abuja

Nigeria’s oil and gas sector remains one of the most important pillars of the national economy, yet it continues to operate below its full potential despite the country’s vast hydrocarbon reserves. This concern was recently highlighted by the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Engr. Bayo Ojulari, during the 4th PENGASSAN Energy and Labour Summit (PEALS) held in Abuja.

His remarks reflect a growing recognition within the industry that Nigeria’s challenge is no longer about resource availability, but about efficiency, coordination, security, and long-term sustainability across the entire oil and gas value chain.

Nigeria’s Untapped Oil Potential

Nigeria is widely regarded as one of Africa’s largest oil producers, with significant reserves of crude oil and natural gas spread across the Niger Delta and offshore basins. However, actual production levels have consistently fallen short of expectations in recent years.

According to industry stakeholders, this gap between potential and actual output is driven by a combination of factors, including pipeline vandalism, crude oil theft, underinvestment in new exploration, operational inefficiencies, and insecurity in key production areas.

Speaking at the summit, Ojulari acknowledged this reality, stressing that Nigeria must move beyond discussions and adopt a more coordinated, strategic approach if it hopes to fully unlock its hydrocarbon wealth. He emphasised that in today’s environment, “every barrel counts, every molecule of gas counts,” underscoring the need for precision, accountability, and efficiency at every stage of production.

A Value Chain Approach to Oil Production

One of the central themes of Ojulari’s message was the importance of viewing the oil and gas sector as an interconnected system rather than isolated operations. He explained that improving production is not the responsibility of a single agency or company, but the result of coordinated actions across the entire value chain—from exploration and field development to transportation, refining, and export.

To address production challenges, he outlined several key priority areas for the NNPCL and industry stakeholders:

1. Field Development and Optimization Expanding the capacity of both existing and newly discovered oil and gas fields is essential. Many assets in Nigeria remain underutilised or undeveloped due to funding constraints, technical challenges, or regulatory delays. Accelerating field development could significantly boost output in the short to medium term.
2. Strengthening Security in Oil-Producing Regions The Niger Delta remains central to Nigeria’s oil production, but it has also been a hotspot for pipeline vandalism, crude theft, and intermittent militancy. These activities not only reduce output but also increase operational risks and environmental damage. Ojulari stressed the need for stronger security collaboration between government agencies, communities, and industry operators to protect critical infrastructure.
3. Reducing Operational Inefficiencies Leakages in the system—whether technical losses, delays, or inefficiencies in production processes—continue to impact overall output. Addressing these inefficiencies requires modern technology, better monitoring systems, and improved maintenance practices across facilities.
4. Unlocking Stranded and Idle Assets Nigeria still has significant oil and gas reserves that remain undeveloped or stranded due to financial, technical, or regulatory barriers. Bringing these assets into production could provide a major boost to national output and revenue generation.

Building a Resilient Energy Sector

Beyond production targets, Ojulari also emphasised the importance of resilience in Nigeria’s oil and gas industry. According to him, resilience is not just about surviving challenges but about building systems that can adapt, recover, and continue delivering value under pressure.

He identified three key pillars of resilience that must guide the industry going forward:

• Operational Excellence This involves adopting global best practices in exploration, production, and asset management. It also requires investing in technology, data-driven decision-making, and workforce development to improve efficiency and productivity.
• Fiscal Discipline Given the volatility of global oil markets, financial prudence is essential. Ojulari stressed the need for careful resource management, cost optimisation, and strategic investment decisions to ensure long-term sustainability and profitability.
• Environmental, Social, and Governance (ESG) Compliance Modern oil and gas operations must align with environmental and social standards. This includes reducing carbon emissions, protecting ecosystems, engaging host communities, and maintaining transparency in governance. ESG compliance is increasingly important for attracting international investment and maintaining industry legitimacy.

The Human Factor: Safety and Workforce Protection

While production and efficiency remain key priorities, labour rights and worker safety were also central to discussions at the summit. The President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Festus Osifo, drew attention to unsafe working conditions in parts of the industry.

He strongly condemned practices that put workers at risk in oil installations and stressed that no production target should come at the expense of human life. According to him, true industry leadership is measured not only by output but by the ability to ensure that every worker returns home safely after duty.

His comments highlight an important reality: the sustainability of Nigeria’s oil sector depends not only on technology and investment, but also on the protection and well-being of the workforce that drives daily operations.

Nigeria’s Energy Future: Opportunities and Risks

Nigeria’s oil and gas sector remains critical to national revenue, foreign exchange earnings, and overall economic stability. However, the current production challenges also present a clear warning: without urgent reforms and coordinated action, the country risks underutilising one of its most valuable natural resources.

At the same time, there are significant opportunities for transformation. Rising global energy demand, continued investment interest in Africa’s hydrocarbon resources, and Nigeria’s large untapped reserves provide a strong foundation for growth—if properly managed.

However, several risks must be addressed:

• Persistent insecurity in oil-producing regions
• Ageing infrastructure and pipeline systems
• Funding gaps for exploration and development
• Global pressure for energy transition and reduced fossil fuel dependence
• Governance and regulatory inefficiencies

Addressing these issues will require a unified national strategy involving government agencies, private operators, labour unions, and host communities.

Conclusion: A Call for Collective Action

The message from the NNPCL leadership and industry stakeholders is clear: Nigeria’s oil and gas sector stands at a critical crossroads. While the country possesses abundant resources, maximising their value will require more than potential—it will require discipline, coordination, and long-term thinking.

From improving field development and securing infrastructure to ensuring workforce safety and enforcing ESG standards, every aspect of the value chain must work in harmony. The idea that “every barrel counts” is not just a slogan—it reflects a broader shift toward efficiency-driven and sustainability-focused energy management.

As Nigeria continues to navigate global energy uncertainties and domestic production challenges, the path forward will depend on collective responsibility. With the right policies, investments, and partnerships, the country still has the capacity to transform its oil and gas sector into a more productive, secure, and sustainable engine of national development.