Nigeria’s Oil Output Wobbles After 10yrs Of Increase in Rigs

Output drops 20.8% in five mature assets — Report

Nigeria’s influence within OPEC+ declines

We are committed to optimising output — Renaissance, Eni

Bad omen requiring urgent steps — Experts

There are indications that increased deployment of oil rigs in Nigeria has not translated into corresponding rise in crude oil production.

Rig count, an important indicator of exploration and production activities, is generally expected to support higher crude oil output as operators drill new wells, maintain existing assets and develop additional reserves.

But official records show that oil output has stagnated over the period since 2016 when rig count was at its peak in Nigeria’s oil fields.

Industry experts told Financial Vanguard that the situation is attributable to a declining output from oil wells described as mature fields as well as slow development of new wells.

According to data obtained from the Organisation of Petroleum Exporting Countries, OPEC, a total of 2,099 rigs were deployed in Nigeria between 2016 and 2026, representing investments running into billions of US dollars.

The data showed that 360 rigs were utilised in 2018, the highest annual deployment during the period, while 87 rigs were recorded in 2021, the lowest.

Checks by Financial Vanguard indicated that deepwater drilling can cost between US$400,000 and US$600,000 per day for the rig alone, excluding drilling mud, casing, cementing, logistics, helicopters, supply vessels, insurance and other services.

A single offshore exploration well can cost between US$50 million and more than US$150 million, depending on water depth and complexity, meaning that Nigeria’s exploration campaigns have involved investments running into billions of dollars.

Despite the spending, Nigeria recorded its highest crude oil output (excluding condensate) amounting to 1.734 million barrels per day, bpd, in 2019, a figure that is significantly below annual budget projection.

It even declined to 1.143 million bpd in 2022.

Output drops 20.8% in five mature assets — Report

Meanwhile, Nigeria’s average oil output from five mature producing fields fell 20.8 per cent year-on-year, YoY, to 10,930 bpd in June 2026 from 13,794 bpd in June 2025, highlighting the pressure on national production and revenue.

A mature oil asset is a field that has produced for many years and moved beyond its early development and peak production stages. Such fields typically experience declining reservoir pressure, increasing water production and falling output, requiring additional investment and enhanced recovery measures to sustain production.

Data obtained from the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, showed that Abo oil field, operated by Eni/Agip and producing since 2003, recorded a 39.2 per cent YoY decline to 6,870 bpd in June 2026 from 11,297 bpd in June 2025.

Pennington, operated by Pennington Producing Limited, fell 45 per cent to 3,880 bpd from 7,107 bpd, while Ugo Ocha, also known as Jones Creek, declined 16.6 per cent to 26,900 bpd from 32,246 bpd.

Sea Eagle, operated by Renaissance Energy, dropped 8.3 per cent to 14,570 bpd from 15,886 bpd, while Okwori, operated by Antan Producing Limited, declined marginally to 2,430 bpd from 2,435 bpd.

Investigations across Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers states showed that many fields have experienced significant depletion since Nigeria’s first commercial oil discovery in 1956.

While some operators have invested in additional wells, workovers and other measures to sustain production, others have struggled to commit the required capital, contributing to declining and unstable output.

We are committed to optimising output — Renaissance, Eni

Responding to Financial Vanguard’s enquiries, Renaissance Africa Energy, operator of Sea Eagle, said the field’s decline was consistent with its maturity.

“Sea Eagle, a Renaissance JV asset, is a mature field and its production performance remains broadly in line with expectations set out in the approved Field Development Plan. As is typical for mature assets, the field is experiencing a natural production decline associated with field life cycle progression.