Market News

By Uche Usim

For several years, players in the Nigerian petroleum sector wondered why the country had the crude, the reserves, the pipelines, terminals and export infrastructure, yet little to sell to earn foreign exchange to buoy the economy.

The answer was perennial oil theft, pipeline vandalism, production disruptions and insecurity that repeatedly robbed the economy of the full value of its most important export.

In March 2022, Heirs Holdings Chairman, Tony Elumelu, raised the alarm on social media that oil thieves were stealing more than 95 per cent of Nigeria’s oil production.

He said the Bonny Terminal was receiving less than 3,000 barrels of crude per day, instead of more than 200,000 barrels.

He added that his company, Heirs Oil and Gas, was at some point losing as much as 50,000 barrels of crude daily to theft.

Today, concerted efforts at tackling the cancer are gradually yielding fruits.

In the second quarter of 2026, Nigeria earned $9.39 billion from crude oil exports, as total exports jumped to $20.08 billion from $15.56 billion in the first quarter.

It was not just crude oil that performed strongly. Gas exports rose to $3.63 billion, refined petroleum products climbed to $3.94 billion, while non-oil exports increased to $3.12 billion.

At the same time, crude oil imports fell sharply from $1.39 billion in Q1 to $580 million in Q2. The result was a much stronger external position for the country.

Nigeria’s current account surplus rose to $7.54 billion in Q2, up from $4.49 billion in Q1 and above the $5.17 billion recorded in the same quarter of 2025.

Behind these numbers lies a simple economic reality: Nigeria earned more because more petroleum was produced, moved, and sold. That brings the issue of security into the centre of the oil story.

One of the major players in the federal government’s effort to protect oil infrastructure is Tantita Security Services Nigeria Limited, TSSNL.

Led by Government Oweizide Ekpemupolo, popularly known as Tompolo, Tantita was brought into the oil-security architecture to help protect pipelines and other critical petroleum assets, particularly in the Niger Delta.

Working with other security agencies and stakeholders, the company has been involved in surveillance and protection operations aimed at reducing crude theft, pipeline vandalism and other activities that interfere with petroleum production and transportation.

The significance of that work is easier to understand when the oil business is stripped down to its basics.

Nigeria can only earn money from crude oil if the crude gets from the oil field to the buyer.

If a pipeline is vandalised, the flow can stop. If crude is illegally tapped, the volume reaching the terminal can fall. If production is repeatedly disrupted, oil companies cannot meet targets.

And when fewer barrels are exported, fewer dollars enter Nigeria.

That is why pipeline security, although not a substitute for production or investment, has become an increasingly important part of Nigeria’s economic recovery story.

More barrels, more dollars

The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has recorded a significant improvement in Nigeria’s oil production this year.

Combined crude oil and condensate production rose from 1.48 million barrels per day in February to 1.735 million barrels per day in June.

Crude oil production alone reached 1.56 million barrels per day in June, taking Nigeria above its OPEC quota of 1.5 million barrels per day.

NUPRC attributed the strong June performance largely to stable production operations and the absence of major pipeline outages. That point, experts note, is critical.

For years, Nigeria struggled to produce at levels consistent with its huge reserves and OPEC allocation. The problem was not always a shortage of oil underground. The problem was often getting the oil out, keeping production facilities running and ensuring that crude could move safely through the evacuation system. Pipeline vandalism and crude theft became major problems in the Niger Delta.

Oil companies frequently reported production losses. Some pipelines were shut down. Some fields operated below capacity.

The government consequently lost revenue while oil producers lost output. The environment also suffered from oil spills associated with damaged infrastructure and illegal activities.

The improvement in security and operational stability is therefore significant because it tackles one of the weak points between production and export. But it is important to put the development in proper perspective.

The CBN’s balance-of-payments figures show how much Nigeria earned from crude exports. They do not state that Tantita generated the $9.39 billion.

The increase in earnings is the product of several factors, including production levels, crude prices, export volumes, field performance and global market conditions.

What the security operations can do is help create an environment in which production and evacuation are less likely to be interrupted.

Pipeline is the bridge

Niger Delta Progressive Alliance President General, Nse Victor Udoh, believes the importance of pipeline protection goes beyond stopping oil theft.

According to him, secure pipelines provide the foundation for greater predictability across the petroleum industry.

His argument is simple. An oil field can produce crude, but the crude still has to be transported.

A refinery can be ready to receive feedstock, but the crude must reach it. An exporter can sign a contract with an overseas buyer, but the promised cargo must be available. The government can prepare its budget based on expected oil revenue, but production must actually take place for those expectations to become reality.

The pipeline, therefore, becomes the bridge connecting production to revenue. When that bridge is repeatedly attacked, the entire system suffers.

Udoh said sustained monitoring and rapid response had helped reduce pipeline breaches and illegal tapping, allowing more production to be accounted for.

He argued that predictable petroleum flows improve the ability of refineries to plan, exporters to meet commitments and investors to assess risks.

This is the wider economic value of asset protection.

It is not simply about security personnel guarding pipes.

It is about protecting the movement of a commodity that remains one of Nigeria’s biggest sources of foreign exchange.

Having oil, losing value

Nigeria’s oil industry has always had a paradox. The country is one of Africa’s major oil producers and has substantial proven reserves.

Yet, for years, production has fallen below potential. Oil theft has been one reason. Ageing infrastructure has been another.

Lack of investment has also played a role. Some oil fields are mature and require additional capital to maintain or increase output.

Regulatory uncertainty and delays in project approvals have affected investment decisions. The result is that Nigeria has often had oil in the ground without extracting enough of it.

That is why the current improvement in production matters. It shows that Nigeria can still increase output from existing assets when the operating environment improves.

But security, analysts note, is only one piece of the puzzle.

The next challenge is investment. Industry stakeholders have repeatedly warned that Nigeria cannot achieve its production ambitions without large-scale investment in existing and new fields.

Brittania-U Chairman and Chief Executive Officer, Catherine Uju Ifejika, has highlighted what investment can do in mature assets.

After the company acquired the Ajapa field from Chevron, more than $400 million was reportedly invested in the asset. The investment included additional wells and a Floating Production, Storage and Offloading, FPSO, facility. Ajapa began production at about 2,300 barrels per day in 2010 before output became higher and more stable.

The lesson is that mature fields are not necessarily finished fields.

With fresh capital, technology and proper management, existing assets can continue to produce significant volumes.

For Nigeria, this is particularly important because developing a new oil field from scratch can take years.

Improving production from existing fields can deliver results faster. At the same time, Nigeria must attract new investment into deepwater projects.

Deepwater as the next big thing

One of the biggest projects in the pipeline is the Bonga Southwest/Aparo development in OML 118.

NNPC Limited and its partners have signed agreements designed to move the project closer to a Final Investment Decision. The project is expected to attract billions of dollars in investment and could eventually produce about 175,000 barrels of oil per day and 140 million standard cubic feet of gas per day.

For Nigeria, that would represent a major addition to production capacity. The federal government has also introduced incentives aimed at making deepwater projects more attractive to investors.

The new fiscal measures are expected by the authorities to unlock potentially tens of billions of dollars in fresh investment.

The objective is straightforward: make Nigeria a more attractive destination for oil and gas capital.

That is necessary because investment in the sector has fallen dramatically over the years.

Industry stakeholders have cited annual oil and gas investment of only about $2 billion, compared with roughly $26 billion in 2014.

Without reversing that decline, Nigeria may struggle to sustain production growth even if security improves.

Human capital gap

According to industry analysts, there is another problem that cannot be ignored, which is Human capital stock (people).

Modern oil production requires engineers, geologists, technicians, data specialists, digital experts, project managers and other skilled professionals.

As the industry moves deeper into technology-driven exploration and production, the demand for specialised skills will increase.

Nigeria, therefore, needs not only investment in wells and pipelines but also investment in people.

Otherwise, some of the opportunities created by the renewed interest in the sector could end up benefiting workers and service providers outside Nigeria.

New oil blocks, new expectations

The government is also trying to increase exploration through new licensing rounds.

NUPRC recently warned companies that emerged winners of 37 oil and gas blocks in the 2025 licensing round to comply with payment and other post-award requirements.

The successful companies are required to pay signature bonuses, provide guarantees and meet other conditions under the Petroleum Industry Act and applicable guidelines.

Failure to comply could result in the provisional awards being transferred to reserve bidders.

This is important because awarding an oil block does not automatically increase production. A block becomes economically useful when investors actually explore it, discover commercially viable resources, develop the field and begin production.

Nigeria, therefore, needs to move quickly from licensing to drilling, development and production.

Security cannot do it alone

Experts say this is where the Tantita debate needs to be placed in context. Pipeline surveillance can reduce the risk of crude theft and vandalism.
It can help keep evacuation routes open. It can contribute to a more stable operating environment in the Niger Delta.

But it cannot by itself solve Nigeria’s oil production problems. It cannot determine the price of crude in the international market. It cannot replace investment. It cannot drill wells. It cannot repair ageing production facilities. It cannot approve petroleum projects. It cannot train the workforce needed for a modern oil industry.

Those responsibilities belong to a much wider network of government agencies, oil companies, investors, communities, regulators and security institutions.

What pipeline security can do is protect one of the most vulnerable links in that chain. And that link matters according to Stakeholders.

From crisis management to planning

For years, Nigeria’s oil industry operated under a cycle of disruption. Production would rise, then fall. A pipeline would be attacked. An oil field would be shut down. Exports would suffer.

Government revenue projections would be adjusted. Companies would review their investment plans. The cycle created uncertainty.

The emerging improvement offers an opportunity to break that cycle.

If production can remain above previous levels, if pipeline breaches remain low, if new investments are completed and if mature fields receive the capital they need, Nigeria can begin planning around more predictable oil revenues.

That would have consequences beyond the petroleum sector.

More export dollars can strengthen foreign exchange inflows. Higher government revenue can improve fiscal planning. More production can support oil-company investment.

New projects can create jobs and demand for Nigerian goods and services. Higher gas output can support electricity generation and industrial activity.

The benefits can therefore spread across the economy.

Real test

Nigeria’s $9.39 billion crude oil export earnings in Q2 2026 are significant. But the bigger story is not the number itself. It is whether Nigeria can keep the oil flowing, if the country can turn improved security into sustained production or return to an industry that has struggled with declining capital inflows.

It is also whether new deepwater projects can finally move from years of discussion to actual production, and whether the government can ensure that the country gets more value from every barrel produced.

The signs are encouraging, but the work is far from finished.

Nigeria remains an oil-producing country with enormous reserves and enormous potential. Its challenge has never been simply finding oil.

The challenge has been turning the oil in the ground into steady production, secure transportation, export earnings, government revenue and broader economic growth.

Pipeline protection is one part of that equation.

Tantita’s operations, alongside those of other security agencies, have become part of the effort to keep Nigeria’s petroleum infrastructure functioning.

The increase in production and exports cannot be credited to one company alone. But a safer and more stable operating environment can make it easier for the rest of the industry to perform.

That is ultimately what the Q2 numbers are showing.

Nigeria is earning more from oil because more of the petroleum value chain is beginning to work together.

The crude has to come out of the ground, moved safely, ensure it reaches the terminal and sold.

Again, the dollars have to come home. The $9.39 billion earned from crude exports in the second quarter is, therefore, more than a number on a balance-of-payments statement.

Analysts say it is a reminder of what Nigeria can earn when fewer barrels are lost between the oil field and the international market. The task now is to make that improvement permanent.