Despite Beating OPEC Quota, Nigeria Misses H1 Budget Oil Target by 38.4m Barrels

Emmanuel Addeh in Abuja 

Despite meeting its Organisation of Petroleum Exporting Countries (OPEC), Nigeria fell significantly below its budget crude oil production target in the first half of 2026, leaving the country with an estimated output deficit of 38.4 million barrels and a potential gross revenue gap of about $2.49 billion.

A THISDAY analysis of data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) during the period indicated that total liquids production, comprising crude oil and condensates, averaged 1.626 million barrels per day (bpd) between January and June, compared with the budget benchmark of 1.84 million bpd.

The figures indicated that Nigeria underproduced its budget target by an average of 213,815 bpd during the six-month period, representing a shortfall of 11.6 per cent, despite slightly exceeding its 1.5 million bpd crude oil production quota approved by OPEC.

In cumulative terms, the review showed that Nigeria produced an estimated 294.6 million barrels of crude oil and condensates during the first half of the year, compared with the budget expectation of about 333.0 million barrels, resulting in a production deficit of approximately 38.4 million barrels.

Based on the 2026 budget oil benchmark of $64.85 per barrel, the shortfall represents an estimated gross revenue opportunity of about $2.49 billion. Since Brent crude traded above the budget benchmark for much of the first half of the year, the actual notional value of the production deficit is likely much higher.

President Bola Tinubu signed the N68.32 trillion 2026 Appropriation Act after the National Assembly retained the fiscal assumptions of a $64.85 per barrel oil benchmark and 1.84 million bpd production target, even as lawmakers increased the overall size of the budget during its consideration.

However, although production remained below the fiscal target, the NUPRC data indicated that Nigeria’s upstream sector maintained a steady recovery throughout the review period.

Total liquids production stood at 1.627 million bpd in January before declining to 1.484 million bpd in February, the weakest monthly performance recorded this year. Output recovered to 1.546 million bpd in March, rose to 1.663 million bpd in April, climbed further to 1.701 million bpd in May and reached 1.735 million bpd in June.

The figures indicated that Nigeria increased total liquids production by 107,940 bpd, or 6.6 per cent, between January and June. Compared with the February low, production expanded by 251,450 bpd, representing growth of 16.9 per cent, underscoring the sustained recovery witnessed during the second quarter.

Nevertheless, June production still remained 104,600 bpd, or 5.7 per cent, below the budget benchmark of 1.84 million bpd, indicating that while the gap had narrowed considerably, the fiscal target remained out of reach.

Also, a breakdown of production by export streams indicated that Bonny Blend remained Nigeria’s largest producing stream throughout the first half of the year. Bonny Blend increased from 244,870 bpd in January to 276,050 bpd in February before moderating to 271,770 bpd in March. Production strengthened to 295,100 bpd in April, eased marginally to 293,880 bpd in May and climbed to 318,280 bpd in June, representing an overall increase of about 30 per cent during the six-month period.

Similarly, Forcados recorded one of the strongest recoveries among Nigeria’s major export streams. Production declined from 282,020 bpd in January to 243,740 bpd in February before dropping sharply to 167,190 bpd in March. The terminal rebounded strongly to 245,140 bpd in April, 289,900 bpd in May and 306,360 bpd in June, ending the first half 8.6 per cent above its January output.

Qua Iboe also maintained a generally positive trend. Production increased from 148,610 bpd in January to 158,750 bpd in February and 169,240 bpd in March before easing slightly to 165,500 bpd in April. Output rose again to 173,360 bpd in May before moderating to 164,720 bpd in June, remaining 10.8 per cent above the January level.

Besides, Escravos Blend remained relatively stable throughout the review period, fluctuating between 135,470 bpd and 144,060 bpd before ending June at 138,030 bpd, almost unchanged from January.

Brass Blend also maintained relatively stable production, increasing from 39,870 bpd in January to 44,450 bpd in February and 44,460 bpd in March before easing to 41,500 bpd in April, recovering to 43,540 bpd in May and ending June at 41,850 bpd.

Among the deepwater assets, Bonga experienced the sharpest operational disruption during the first quarter. Production plunged from 119,400 bpd in January to just 2,020 bpd in February before recovering to 91,990 bpd in March. Output improved further to 102,120 bpd in April, 102,540 bpd in May and 103,660 bpd in June.

Among the condensate streams, Agbami recorded one of the strongest performances, rising from 54,200 bpd in January to 74,060 bpd in June. Conversely, Akpo condensate production declined from 50,110 bpd to 40,630 bpd over the review period.

The figures indicated that the gradual increase in national production reflected improved security around critical oil infrastructure, sustained efforts to curb crude theft, higher asset reliability and increased collaboration between regulators and upstream operators.

However, they also indicated that while Nigeria had successfully exceeded its OPEC production quota and recorded a steady recovery in output after February’s slump, the country was yet to attain the production level required to fully support the revenue assumptions embedded in the N68.32 trillion budget.