Nigeria, recognized as Africa's largest crude oil producer alongside Angola, is projected to elevate the continent's oil production to 3.39 million barrels per day (bpd) by 2025. This increase represents an enhancement of over 500,000 bpd for the year.
According to the African Energy Chamber's (AEC) "State of African Energy 2025 Outlook," West Africa is anticipated to spearhead the continent's oil production growth, rising from approximately 6.5 million bpd currently to nearly 7 million bpd by the end of 2025.
The report highlights that West Africa remains a pivotal contributor to oil supply, currently producing around 3.7 million bpd. With ongoing production from Angola and a rebound in Nigeria's output, the region could achieve production levels between 3.8 and 3.9 million bpd.
By 2025, Africa is expected to account for about 8 percent of the global oil supply, including both crude oil and condensates, as both global and African oil supplies are anticipated to experience gradual growth this year.
The AEC notes that this gradual increase is largely dependent on reducing pipeline vandalism and oil theft in Nigeria, as well as achieving a more stable environment in Sudan, which also impacts South Sudan's production.
Nigeria has recently reported a significant recovery in oil output, surpassing the 1.5 million bpd mark, exceeding the December 2024 production quota established by the Organisation of Petroleum Exporting Countries (OPEC).
Data from tanker tracking by Bloomberg indicates that Nigeria's production increased by 40,000 bpd, reaching 1.51 million bpd, marking its highest output in four years.
After facing production challenges that limited output to 1.3 million bpd in 2023, Nigeria concluded the year with a notable improvement, surpassing OPEC's quota. The country aims to achieve a target of 2.06 million barrels of crude oil per day in 2025, which will include both blended and unblended condensates.
Addressing theft and vandalism
The AEC’s Outlook is relying on Nigeria to tackle the persistent issues of pipeline vandalism and oil theft in order to achieve established targets and support the continent's gradual development.
In October 2024, the Nigerian National Petroleum Company (NNPC) Limited reported reaching a production level of 1.8 million barrels per day (bpd), attributing this achievement to improved security initiatives designed to mitigate oil theft and prevent pipeline vandalism.
To provide context, oil theft results in significant financial losses for Nigeria, amounting to millions of dollars annually; in 2022, losses reached $23 million per day, and in March 2023 alone, the country lost $1.43 billion, as estimated by the Senate. Operation Delta Safe is focused on minimizing these losses, with a production target of 1.7 million barrels per day for this year.
Investment in Nigeria's crude oil sector
Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell Plc, has made a $5 billion Final Investment Decision (FID) for the Bonga North deep-water project, situated off the coast of Nigeria.
Bonga North will be linked to the Shell-operated Bonga Floating Production Storage and Offloading (FPSO) facility, where Shell maintains a 55 percent operating interest.
The project involves drilling, completing, and commissioning 16 wells, which include eight production wells and eight water injection wells. Additionally, it encompasses modifications to the existing Bonga Main FPSO and the installation of advanced subsea equipment associated with the facility.
As a significant initiative for Nigeria, Bonga North is intended to maintain oil and gas production at the Bonga facility. The field is estimated to contain over 300 million barrels of oil equivalent (boe) in recoverable resources and is expected to reach a peak production of 110,000 barrels of oil per day, with the first oil anticipated by the end of the decade.