Oil output surges as losses via pipelines fall

Nigeria’s oil output is rising as losses through pipelines decline, with improved security, reduced oil theft and Niger Delta stability supporting higher production, DARE OLAWIN writes

Nigeria is witnessing a rise in oil production, driven by several factors, including a sustained reduction in pipeline losses and improved security of oil assets.

The Nigerian Upstream Petroleum Regulatory Commission’s July report showed that oil losses through pipelines had fallen to historical lows. Nigeria’s combined crude oil and condensate production also rose to approximately 1.735 million barrels per day in June, following improved security of oil assets.

The production milestone represented a fourth consecutive monthly increase and was attributed to the peace and stability in the Niger Delta, as well as the impact of Tantita Security Services Nigeria Ltd operations in protecting national assets, particularly oil pipelines in the region.

For years, Nigeria grappled with losses running into billions of dollars as a result of sabotage of oil installations and pipelines, community interference and production shutdowns. The losses negatively affected national revenue and kept oil production at low levels.

However, the sector is turning the corner, with NUPRC reports showing that pipeline losses have continued to decline, helping oil production to rise to new levels. The gains have been linked to the work done by Tantita Security Services Nigeria Ltd in the Niger Delta region.

For many stakeholders, the continued increase in oil production, alongside peace and stability in the Niger Delta, is expected to boost government revenue, external reserves and the broader fiscal outlook.

The Federal Government of Nigeria’s appointment of Tantita Security Services Nigeria Ltd to protect oil assets and promote peace and stability in the Niger Delta has played a role in the development.

President Bola Tinubu had appointed TSSNL, led by High Chief Government Ekpemupolo, alias Tompolo, to protect Nigeria’s oil assets in the Niger Delta region. The appointment was intended to enable TSSNL, through its security operations, to support the national economy in getting the full benefits of oil resources.

TSSNL works in collaboration with other security outfits to achieve its goals of securing oil assets and ensuring peace and stability in the Niger Delta region. Tantita’s operations have ensured the security of oil pipelines, supported the uninterrupted flow of petroleum resources, and helped Nigeria migrate from a position of constant loss management to stability, planning, growth and development.

TSSNL operations have transformed the oil and gas landscape, allowing Nigeria to expand its oil production quota and significantly cut rampant oil theft. Its track record in mitigating risks associated with oil pipelines has positioned it as a reliable partner in preserving Nigeria’s economic backbone.

OPEC quota met

Nigeria met its OPEC production quota for the third straight month in July, producing a combined 1.67 million barrels per day of crude oil and condensate, the NUPRC said.

NUPRC data showed that crude oil output averaged 1.505mbpd in July, while condensate added 0.17mbpd, taking the combined daily average to 1.67mbpd. The regulator said peak daily production reached 1.78mbpd, while the lowest daily output was 1.57mbpd during the month.

“Despite some operational problems at a few fields, Nigeria met the OPEC quota of 1.5mbpd in July,” NUPRC stated in a recent statement. The commission noted, however, that overall production fell four per cent compared with June.

The NUPRC attributed the month-on-month decline mainly to operational challenges at the Erha and Akpo fields. “Disruptions at Erha and Akpo constrained volumes and were a significant factor in the production shortfall for the month,” the spokesperson said.

The regulator added that most other producing assets remained stable. “Operators implemented measures to maintain production efficiency and to minimise the impact of the disruptions,” the NUPRC said.

Crude supply surges

The NUPRC Q2 2026 statistics on the enforcement of the Domestic Crude Supply Obligation, in accordance with the provisions of Section 109 of the Petroleum Industry Act, showed that a total of 53.7 million barrels of crude oil and condensate were supplied to local refiners between April and June, representing an overall performance of 97.4 per cent.

The statistics showed that DCSO is being actively administered and enforced by the NUPRC. On a monthly basis, the commission meets with stakeholders, including crude oil producers and local licensed refineries, after which the producers are allocated a specific volume of their crude oil and condensate to be offered to local licensed refineries.

However, in line with the PIA, the framework operates on a “willing buyer, willing seller” basis, which shapes eventual outcomes.

In April, following consultations with stakeholders, 18,127,638 barrels were allocated to producers. However, the producers exceeded expectations, offering 19,312,476 barrels to refiners. Eventually, 20,879,381 barrels were supplied to local refiners, meaning the producers met 114.9 per cent of their allocation.

In May, the commission, in enforcing its DCSO, allocated 18,778,392 barrels of crude oil to the producers, but the producers exceeded their expectations once again, offering 23,187,893 barrels to local refiners. However, the producers’ actual supply to the refiners by the end of the month stood at 14,228,865 barrels, representing 75.8 per cent compliance.

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In June, the commission allocated 18,172,638 barrels to the producers. The producers offered 26,835,119 barrels to refiners, which in turn took 18,606,026 barrels, representing a 102.4 per cent performance.

The commission, in a statement, observed that the improvement in DCSO coincided with an increase in local oil production and the signing of the long-term crude supply agreement supported by a bankable Sales and Purchase Agreement between the producers and domestic refiners.

At the level of refinery participation, the statistics showed that the Dangote Refinery required 63 million barrels in Q2, while producers offered 68.1 million barrels. The 68.1 million barrels offered to the Dangote Refinery by producers represented 98 per cent of all offered volumes.

Eventually, the Dangote Refinery accepted 52.6 million barrels. This implies that the refinery accepted only 78 per cent of what it was offered. The commission reaffirmed its commitment to achieving the government’s objective of energy sufficiency.

Leveraging the framework of the PIA, 2021, the commission said it aims to sustain recent gains in crude oil production while continuously enforcing the DCSO.

Stakeholders speak

President-General, Niger Delta Progressive Alliance, Nse Udoh, said pipeline protection enabled national institutions to progress from reactive crisis management to strategic foresight, from temporary containment to durable systems-building, and from uncertainty-driven decisions to calculated national ambition.

“It is important to clarify the role of pipeline surveillance within the wider energy landscape. Energy security encompasses the full value chain, from exploration and production to refining, distribution, pricing policy, and subsidy frameworks. Pipeline surveillance does not manage these domains,” he said.

He added: “Its mandate is precise: safeguarding critical infrastructure that transports petroleum resources. Yet this single function has proven foundational. Without secure transportation channels, production targets falter, refining plans collapse, exports decline, and fiscal projections become unreliable.”

Continuing, he wrote: “Asset protection, in this context, is not a supporting activity. It is a precondition for economic order. In effect, the pipeline is the hinge on which the entire petroleum value chain turns. When that hinge is weak, every other link in the chain carries strain. When it is secure, the entire system gains coherence.”

The immediate impact has been operational. Sustained monitoring and rapid response systems have sharply reduced pipeline breaches and illegal tapping. Receipt rates have climbed towards full recovery, with national output rising to levels not seen in recent memory.

This redirection has restored Nigeria’s credibility in international oil markets, allowing Nigeria to reclaim market share lost to Angola and Libya.

“Economic stability follows predictability. When crude flows are secure, refineries can plan feedstock intake with assurance. Export commitments can be met without fear of sudden shortfalls. Gas-to-power projects can operate without recurrent shutdown risks”.

“Investors can assess Nigeria’s petroleum sector with clearer risk profiles. Surveillance therefore does more than stop theft. It reintroduces reliability into national energy planning. And reliability is the bedrock upon which sustainable economic growth is built.

“With predictable flows, national budgeting becomes more credible, infrastructure planning becomes more precise, and long-term contracts become easier to negotiate. Predictability is the silent currency of modern economies, and pipeline surveillance has begun restoring it,” he stated.

Further benefits extend into public finance. Higher accounted-for production translates directly into increased export revenues, improved foreign exchange inflows, and strengthened fiscal capacity. National oil company performance in recent years illustrates this shift towards profitability and efficiency, driven in part by reduced losses and enhanced operational continuity.

As revenues stabilise, government budgeting gains credibility. Development planning becomes less speculative. The national economy gains breathing space to invest in infrastructure, social services and diversification. This breathing space matters. It allows policymakers to think beyond survival and begin shaping structural reforms, industrial expansion and long-term social investment. It also reduces dependence on emergency borrowing and short-term fiscal patchwork.

Traditional rulers and community leaders in the Niger Delta have called for continued support for Tantita Security Services Limited following a vote of confidence passed on the firm by the National Assembly of Nigeria.

The leaders said the company’s involvement in securing oil and gas pipelines had led to visible improvements in oil-producing communities, particularly in reducing crime and creating jobs for youths.

Speaking on the development, the President-General of the Isoko Development Union, Christopher Akpotu, praised the joint committee of the Senate and House of Representatives for dismissing petitions filed against the firm.

He described the decision as a positive step for the Niger Delta and urged stakeholders to focus on economic gains rather than internal disagreements. “That is the right way to go,” he said. “There are many opportunities in the oil and gas sector. We should focus on how to derive more benefits rather than fighting over what has already been allocated.”

Similarly, the President-General of the Ughelli Descendants Union, Sam Akpemegi, said the company had improved security since it began operations, noting that both visible and intelligence-based strategies had been deployed. “They have done very well and improved security since they began operations,” he said, adding that the firm’s activities now cover a large number of communities.