Nigeria’s oil production has climbed to its highest level in years; investor interest appears to be returning amid efforts to address long-standing bureaucratic bottlenecks. Yet the country’s upstream industry continues to face deep-rooted structural problems that have frustrated previous reform efforts. The question is whether the latest momentum marks a genuine turning point or another short-lived recovery. KINGSLEY JEREMIAH writes.

Nigeria’s upstream petroleum sector has entered the second half of 2026 with renewed optimism. According to data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), combined crude oil and condensate production reached 1.735 million barrels per day in June, exceeding the country’s Organisation of Petroleum Exporting Countries (OPEC) quota of 1.5 million barrels per day and representing the highest production level since April 2020.

The figures suggest that the industry is gradually recovering from years of declining output caused by oil theft, pipeline vandalism, underinvestment and regulatory uncertainty. They also provide early evidence for the reform agenda introduced by the Chief Executive of the NUPRC, Oritsemeyiwa Eyesan, who assumed office six months ago with a promise to make the regulator more predictable, transparent and responsive.

Yet Nigeria has experienced similar periods of optimism before. Temporary improvements in production have often been reversed by renewed insecurity, delayed investments and policy inconsistency.

For many industry observers, the more important question is not whether production has increased over the past six months, but whether the reforms now being pursued are robust enough to sustain investment and restore long-term confidence in Africa’s largest oil producer.

NUPRC’s own figures show a steady upward trajectory this year, with production rising from about 1.62 million barrels per day in January to 1.70 million barrels in May before reaching June’s high. The commission attributes the increase largely to improved operational stability, the completion of planned maintenance activities and fewer disruptions to oil infrastructure.

Speaking, Eyesan believes the improvement reflects more than favourable operating conditions.

“The level of participation tells me people have faith in the industry. Not just Nigerian companies, but international oil companies and international independents. That is a signal. The question now is whether we build on it, and that depends entirely on whether the regulatory environment continues to move in the direction we have set,” she said.

Her reference to investor confidence points to another development the commission considers significant.

According to NUPRC, the 2025 licensing round attracted not only indigenous companies but also international oil companies and independent foreign operators that have historically shown limited appetite for Nigerian acreage. For the regulator, the broader participation suggests that confidence in the country’s upstream sector may be improving after years in which capital flowed to competing producers such as Namibia, Guyana and Angola.

However, licensing rounds have not always translated into investment. Nigeria has previously announced successful bid rounds that were followed by delayed field development, slow approvals and prolonged negotiations before projects reached final investment decisions. Winning investor interest is therefore only the first step. The more difficult task is ensuring that discoveries are developed, capital is deployed and production follows.

Eyesan, who previously spent three decades at the Nigerian National Petroleum Company Limited (NNPC) in several executive positions, argues that restoring confidence requires improving regulatory performance rather than introducing another wave of policy reforms.

Speaking shortly after assuming office, she said: “Policy is only relevant in a functional industry.

Effective policy relies on a robust industry, and steering the sector towards strength, resilience and forward-thinking progress depends on collective participation.”

That philosophy has shaped the commission’s priorities over the past six months.

Rather than focusing solely on new regulations, NUPRC has concentrated on reducing approval timelines, digitising regulatory processes, improving engagement with operators and strengthening institutional transparency.

Also, monthly leadership meetings involving NUPRC, the Nigerian National Petroleum Company Limited (NNPC), the Oil Producers Trade Section (OPTS), the Independent Petroleum Producers Group (IPPG) and other operators have become part of the commission’s effort to identify production bottlenecks before they escalate into prolonged disruptions.

Internally, the regulator has accelerated the digitisation of correspondence, permitting, reporting and financial systems while introducing a 90-day programme to fast-track field development plans, well interventions and rig mobilisation.

The reforms are intended to address one of the industry’s longest-running criticisms, that regulatory approvals in Nigeria often take considerably longer than in competing jurisdictions.

Whether those changes become permanent, however, remains to be seen.

Nigeria’s petroleum industry has witnessed several reform initiatives over the past decade that generated initial optimism but lost momentum during implementation. Investors will ultimately judge the regulator less by reform announcements than by whether approval timelines consistently improve and bureaucratic delays become the exception rather than the norm.

Recognising that concern, the commission is developing service level agreements that would publicly commit it to defined timelines for regulatory approvals. If implemented and enforced, the initiative could become one of the most significant accountability measures introduced since the Petroleum Industry Act (PIA) came into force.

The commission is also attempting to reduce regulatory costs.

According to NUPRC, discussions with the Nigerian Nuclear Regulatory Authority are aimed at harmonising overlapping compliance requirements that currently require operators to submit similar information to multiple government agencies.
Eyesan argues that reducing regulatory duplication is essential to improving Nigeria’s competitiveness.

She said: “When you have multiple laws, you will likely have higher costs because each law comes with its own fees. The only way to safeguard investments is to reduce the cost of operating here.”

Industry stakeholders have long argued that Nigeria’s comparatively high production costs remain one of the country’s biggest disadvantages, particularly as investors become more selective in allocating capital globally.

The regulator is also betting on better geological information to stimulate exploration.
Earlier this year, NUPRC signed the PEL5 agreement with SeaSeis Geophysical Limited and TGS to acquire broadband 3D seismic data covering approximately 11,700 square kilometres offshore in the Eastern Niger Delta.

According to the commission, the survey is expected to improve the quality of subsurface data available to prospective investors in one of Nigeria’s most prolific but technically challenging offshore basins.

As Eyesan explained at the signing ceremony, “Exploration is fundamentally driven by confidence in data and processes. PEL5 is about ensuring that the subsurface case for Nigeria’s offshore acreage is made as compelling as it can be.”

Whether improved seismic information ultimately results in discoveries and new investments will depend on broader commercial considerations, including oil prices, fiscal competitiveness and global investor appetite.

Gas development has emerged as another key component of the commission’s strategy.

According to NUPRC, total gas production reached 7.93 billion cubic feet per day, while domestic gas supply rose to a record 2.18 billion cubic feet daily. Non-associated gas production also marginally exceeded associated gas production for the first time, suggesting increased investment in dedicated gas projects.

The commission also reported that gas flaring declined to 0.57 billion cubic feet per day, representing 6.9 per cent of total gas production.

Eyesan argues that the figures reflect broader economic benefits beyond increased output, adding, “This is not only a production story. It is a story about an industry beginning to serve the country it sits inside—more gas reaching Nigerian homes, Nigerian industry and Nigerian power.”

Even so, Nigeria continues to face persistent challenges in converting abundant gas reserves into reliable domestic energy supply. Manufacturers, power producers and other industrial users continue to report supply constraints, while gas flaring remains above levels recorded in many competing petroleum-producing countries. Closing that gap will require substantial investment in processing facilities, transportation infrastructure and distribution networks—issues that extend beyond regulatory reforms.

Environmental governance is another area where NUPRC is attempting to strengthen oversight. The commission has directed upstream operators to adopt measurement-based methane and greenhouse gas reporting from January 2027, replacing estimation-based reporting with verified emissions data.

According to NUPRC, the initiative is intended to improve the credibility of Nigeria’s climate reporting, support its international emissions commitments and enhance investor confidence in the country’s environmental governance framework.

Whether operators fully comply with the directive will depend on effective monitoring and enforcement, areas where regulators across the industry have historically faced significant challenges.

Transparency has also become a central part of the commission’s reform agenda.

In June, the National Bureau of Statistics (NBS) commended NUPRC for improvements in the publication and quality of upstream oil and gas data, recognising the commission’s contribution to national economic statistics.

The recognition is significant because inconsistent production data has long undermined confidence in official reporting and complicated economic planning.

Still, stronger data alone cannot resolve the structural constraints facing the sector.

Nigeria continues to struggle with crude theft, ageing infrastructure, delayed investments, declining exploration, high operating costs and growing competition from emerging oil provinces across Africa and beyond.

Those challenges raise questions about whether the Federal Government’s target of increasing production to two million barrels per day by 2027 and three million barrels by 2030 can realistically be achieved without broader reforms extending beyond the regulator.

Eyesan acknowledges that the ambition requires more than improved administration, stressing that “We are rushing against time. If we are serious about ramping up production, we cannot rely solely on in-country resources. We need to bring in people who have done this at scale internationally and be honest about whether our processes are designed to attract them.”

She has also identified human capital as an emerging challenge, arguing that years of reduced investment weakened the industry’s technical workforce.

“Growing production is not only about acreage and capital. It is about the people who can execute at the level this ambition requires. The commission has a role in rebuilding that pipeline,” Eyesan said.

Six months into Eyesan’s tenure, NUPRC can point to measurable progress. Production has increased, investor participation in licensing has broadened, regulatory engagement has become more proactive and the commission has begun modernising internal processes that operators have criticised for years.

However, the harder phase of reform is only beginning. The regulator must now demonstrate that faster approvals become institutional practice rather than leadership initiatives, that licensing rounds consistently lead to investments, that environmental commitments are enforced and that production gains can be sustained despite fluctuations in oil prices and security conditions.

Ultimately, Nigeria’s upstream recovery will not be judged by a single production milestone or successful licensing round. It will be measured by whether the reforms now under way create a regulatory system capable of consistently attracting investment, reducing operating costs and restoring confidence in one of Africa’s most strategically important petroleum provinces.