By Muhammad Mamman
Nigeria’s crude oil production is likely to remain constrained in 2026 due to mounting fiscal pressures, regulatory uncertainty and limited capacity additions, according to a new outlook by Coronation Group.
In its latest analysis of the energy sector, the investment and research firm warned that despite ongoing reforms, Nigeria faces structural headwinds that could cap any meaningful growth in oil output next year. It noted that the country’s ambitious production targets may prove difficult to achieve without significant improvements in the operating environment.
Coronation Group identified a heavy fiscal burden on oil producers as a major challenge, pointing to high taxation, royalties and other levies that continue to dampen investor appetite. These pressures, it said, reduce the incentive for both international oil companies and local operators to commit fresh capital to upstream projects.
The firm also highlighted regulatory bottlenecks as a key concern. While reforms such as the Petroleum Industry Act were designed to provide clarity and stability, Coronation Group observed that implementation gaps and policy uncertainty persist, slowing decision-making and project execution across the sector.
In addition, the report noted that limited new capacity additions are likely to weigh on production outlook. Years of underinvestment, coupled with delays in bringing new fields and infrastructure on stream, mean Nigeria may struggle to significantly raise output beyond current levels.
Coronation Group stressed that addressing these challenges would require a more competitive fiscal regime, clearer and more consistent regulation, and accelerated investment in new capacity. Without such measures, it warned, Nigeria risks missing out on potential gains from the global energy market, even as oil remains a critical source of revenue for the economy.
The firm concluded that while modest improvements are possible, expectations of a sharp rebound in Nigeria’s oil production by 2026 should be tempered unless decisive reforms are implemented.
