Nigeria’s oil and gas sector is undergoing a transformative shift, championed by long-awaited and well-calculated government energy reforms. These reforms have increased Indigenous participation, substantial investments, and infrastructural advancements. These developments signal a promising future for the industry despite long-standing challenges.
From the day one removal of fuel subsidies to the Energy sector reforms and ambitious production targets, to the reconstitution of the NNPCL board and many other critical actions, the Tinubu-led Government has continued to show its dogged willingness to revamp the gallingly inefficient industry. It now sets the tone for what is to be one of the most promising and bullish eras in Nigeria’s Energy sector.
Indigenous companies at the forefront
Key government reforms through presidential directives, legislative policies, and associated fiscal incentives have helped improve the attractiveness and competitiveness of Nigeria’s Oil & gas sector, and paved the way for indigenous firms to assume and exert greater control. The mass acquisition of assets previously held by global giants Shell, ExxonMobil, TotalEnergies, and Eni by indigenous firms, Renaissance Africa Energy Holdings, Seplat Energy, Oando, Chappal Energies, etc., has triggered a lot of excitement about Nigerian participation in the sector. These local players have leveraged their deep understanding of the Nigerian business landscape, inclusive community relationships, and operational agility to revitalise neglected assets, enhance production, and maximise profitability. For instance, Heirs Energies successfully doubled oil production, surpassing 50,000 barrels per day by optimising existing infrastructure.
Strategic investments and renewed confidence
Nigeria’s energy sector resurgence has led to renewed investor confidence, evidenced by substantial investments. In 2024, Nigeria secured three out of Africa’s four Final Investment Decisions (FIDs) valued at $5.5 billion, and is now up to $8 billion in less than a year. ExxonMobil’s newly announced planned capital deployment of $1.5 billion investment in the Usan deepwater oilfield on OML 138 underscores the company’s commitment to Nigeria’s offshore potential. Additionally, discussions between Nigeria and Petrobras on their re-entry into Nigeria’s Oil & Gas sector for deepwater exploration indicate a rekindled interest from global players.
Infrastructure developments pave the way
Infrastructure projects have been vital to the industry’s recovery. The Dangote Refinery, the World’s Largest Single-Train 650,000-barrel-per-day refinery, since commencing operations, has drastically reduced import dependence, satisfying domestic demands for petroleum products and for export. Ably supported by the Naira-for-Crude Initiative, implemented by the Federal Executive Council, in which local refineries are supplied crude oil feedstock in Naira rather than Dollars, towards stabilizing fuel pump prices and the Naira/USD exchange rate, the Dangote Refinery has been able to introduce the Nigerian public to premium-quality petroleum products at fair prices and occasionally engaging in price wars with the NNPCL, all to the benefit of customers.
Similarly, the Ajaokuta–Kaduna–Kano (AKK) Natural Gas Pipeline, despite initial setbacks and delayed timelines, is now over 72 percent complete and aims to transport natural gas across key regions, fostering industrial growth and energy access in Nigeria.
Other natural gas infrastructure projects, like the Nigerian LNG Train 7 project and the Morocco-Nigeria gas pipeline project, both set to increase Nigeria’s production and export capacity, with the latter just receiving potential co-financing support from the UAE to complete the project, further exemplify Nigeria’s renewed commitment to enhancing its gas infrastructure.
A promising horizon
Despite the challenges, the convergence of indigenous participation, strategic investments, infrastructural advancements, and solid regulatory reforms by the Tinubu Government paints a hopeful picture for Nigeria’s oil and gas industry. With sustained commitment and effective execution, the sector is poised to not only reclaim its former glory but also achieve unprecedented growth, and now stands at its most exciting point in recent history.
Emmanuel Ogebe is an investment analyst, researcher, and writer with expertise spanning finance, technology, and energy. Passionate about how markets grow, how innovation spreads, and where opportunity lies next, he focuses on unlocking value in Nigeria and across Africa through data-driven insights and impactful storytelling.