Higher crude and gas earnings, stronger refined-product exports and improved oil production push Nigeria’s external position further into surplus….
Nigeria’s external position strengthened significantly in the second quarter of 2026, with rising earnings from crude oil, natural gas, refined petroleum products and non-oil exports helping to push the country’s current account surplus to $7.54bn.
The latest provisional balance of payments data from the Central Bank of Nigeria showed that the surplus increased by 67.93 per cent from $4.49bn recorded in the first quarter of the year. It was also higher than the $5.17bn recorded in the corresponding period of 2025.
The improvement was driven largely by a sharp increase in export earnings, which climbed from $15.56bn in Q1 to $20.08bn in Q2.
Crude oil exports rose by 15.78 per cent to $9.39bn, while earnings from natural gas exports increased by 40.15 per cent to $3.63bn.
The CBN said, “Provisional balance of payments statistics for Q2 2026 show a current account surplus of $7.54bn, which was higher than the $4.49bn and $5.17bn recorded in the preceding quarter (Q1 2026) and corresponding period of 2025, respectively.”
The stronger performance was not limited to crude and gas. Exports of refined petroleum products surged by 66.24 per cent during the quarter to $3.94bn, while non-oil exports rose by 25.30 per cent to $3.12bn.
At the same time, Nigeria’s crude oil import bill fell sharply, dropping from $1.39bn in the first quarter to $580m in the second.
Together, the figures point to a stronger flow of foreign exchange into the economy and renewed attention on the factors behind Nigeria’s improving oil production and export performance.
One of the issues at the centre of that discussion is the security of petroleum infrastructure, particularly pipelines in the Niger Delta, where attacks, crude theft and illegal tapping have historically disrupted production and weakened government revenues.
Tantita Security Services Nigeria Limited, which was contracted by the Federal Government to protect oil pipelines and other critical infrastructure in the region, has been among the security outfits involved in the surveillance of petroleum assets.
The company, led by High Chief Government Ekpemupolo, popularly known as Tompolo, has worked alongside other security agencies to monitor pipelines and safeguard oil infrastructure.
Stakeholders say the increased surveillance has contributed to improved security around critical oil assets, helping to protect petroleum flows and reduce losses associated with crude theft.
For Nse Udoh, President General of the Niger Delta Progressive Alliance, the importance of pipeline surveillance goes beyond the immediate protection of infrastructure.
He said, “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 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.”
According to Udoh, sustained surveillance and faster responses to breaches have reduced illegal pipeline activities while improving the accounting of crude production.
He said the development had also helped Nigeria strengthen its position in international oil markets and regain market share previously 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.”
He added: “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.
The wider economic impact is significant. Higher levels of accounted-for oil production can increase export earnings and foreign exchange inflows while strengthening the revenue base available to government.
But security alone will not determine whether Nigeria can sustain the improvement.
The industry is also looking towards greater investment in existing fields and the development of new oil and gas assets to prevent production gains from being short-lived.
Chairman and Chief Executive Officer of Brittania-U, Catherine Ifejika, pointed to the Ajapa field as an example of how investment can unlock production from existing assets.
She said more than $400m was invested after Brittania-U acquired the field from Chevron, including additional drilling and the deployment of a Floating Production, Storage and Offloading facility.
According to Ifejika, the investment enabled Ajapa to begin production at about 2,300 barrels per day in 2010, before output subsequently increased and became more stable.
The Nigerian Upstream Petroleum Regulatory Commission is also seeking to attract fresh capital into the sector through incentives targeting offshore oil and gas developments.
The commission has said the new incentives could draw as much as $50bn in investment into Nigeria’s offshore energy industry.
However, the sector continues to face a shortage of skilled personnel capable of supporting the expansion of offshore operations.
The NUPRC has also noted that annual investment in Nigeria’s oil and gas industry has fallen to about $2bn, compared with $26bn in 2014.
Despite the investment gap, crude and condensate production has recorded an upward trend.
Data from the NUPRC showed that total oil production increased from 1.48 million barrels per day in February to 1.735 million barrels per day in June.
NUPRC Chief Executive, Oritsemeyiwa Eyesan, said the increase in investment would need to be matched by stronger technical capacity.
“Today we are attracting new investments, and so we want to see an upward trajectory. It stands to reason that you must go back to the basics. First of all, we need the right competencies in sub-surface,” Eyesan recently stated.
Oil licensing round puts new assets in focus
The push to increase production has also extended to the 2025 oil and gas licensing round, through which the NUPRC awarded provisional rights to successful bidders for new assets.
The regulator recently warned 31 companies that emerged winners of 37 oil and gas blocks to meet their financial obligations within the prescribed period or risk losing their provisional awards.
The commission said payment of signature bonuses had commenced following the issuance of the provisional awards.
“Exactly a month ago, the NUPRC hosted the 2025 commercial bid conference in Abuja where 31 companies emerged winners of 37 oil and gas blocks. Having issued the winners with the provisional awards, compliance with the payment of signature bonuses has already begun.
“Winners who fail to pay signature bonuses within the stipulated time frame in line with the Petroleum Industry Act will forfeit their bid guarantee and lose their provisional awards to the reserve bidders,” the NUPRC stated.
Under the Petroleum Industry Act and relevant licensing rules, successful bidders are required to pay signature bonuses ranging from $3m to $7m for each block.
They must also provide the required guarantees, pay first-year rents and meet other post-award conditions within the specified period.
Failure to meet those requirements could lead to the affected block being transferred to the next-ranked reserve bidder.
Deepwater projects offer another production boost
Another major component of Nigeria’s strategy to revive oil investment is the development of deepwater projects.
The Nigerian National Petroleum Company Limited and its partners have signed agreements aimed at advancing the proposed Bonga Southwest/Aparo development towards a Final Investment Decision.
Located in Oil Mining Lease 118, the project is expected to attract investment of up to $21bn and has a projected peak production capacity of about 175,000 barrels of oil per day, alongside 140 million standard cubic feet of gas per day.
NNPC Ltd and the OML 118 Contractor Parties — Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited — executed an Addendum to the OML 118 Production Sharing Contract as well as an Addendum to the Dispute Settlement Agreement.
The Federal Government has also moved to improve the investment case for deepwater developments.
President Bola Tinubu approved the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, which is designed to improve the competitiveness of Nigeria’s deepwater fiscal regime and attract new capital into the sector.
The project partners have meanwhile completed the Pre-Front End Engineering Design phase for Bonga Southwest/Aparo, taking the development towards the more detailed Front End Engineering Design stage.
The completion of the Pre-FEED work is expected to provide a clearer technical and commercial framework for the project as it progresses towards further engineering activities, subject to the necessary approvals and governance processes.
Turning reserves into sustained production
For industry experts, the latest improvement in Nigeria’s oil output and external position will only be sustained if investment is matched by deeper structural reforms across the sector.
They say Nigeria needs to combine exploration with faster field development, enhanced recovery from mature assets, stronger security, infrastructure upgrades and more efficient regulatory processes.
The country already has substantial proven hydrocarbon reserves. The bigger challenge, they argue, is converting those reserves into consistent production and export earnings.
Without addressing the constraints surrounding security, infrastructure, investment, technical capacity and regulatory approvals, increased exploration spending alone may not deliver the sustained production growth required to strengthen government revenues and foreign exchange earnings.
Industry stakeholders have therefore called for renewed efforts to advance major oil and gas developments, including Bonga North, Bonga Southwest/Aparo, Zabazaba and Etan.
The success of those projects, alongside stronger performance from existing fields, could determine whether Nigeria’s recent production gains become a temporary improvement or the foundation for a more durable expansion of its oil and gas economy.
