As of May 2025, Nigeria’s oil and gas sector is experiencing significant developments, marked by substantial investments, regulatory reforms, and ongoing challenges.
📈 Investment & Production Targets
- $17 Billion Foreign Investment: In 2024, Nigeria attracted approximately $17 billion in foreign investments within its oil and gas sector. This influx is attributed to reforms by the Nigerian National Petroleum Company Limited (NNPCL) and active investor engagement at international forums like the 2025 CERAWeek in Houston.
- ExxonMobil’s $1.5 Billion Investment: ExxonMobil plans to invest $1.5 billion in revitalizing the Usan oilfield (OML 138) in the eastern Niger Delta. This initiative is part of a broader strategy to enhance production capacity from existing assets.
- NNPCL’s Production Target: The Nigerian government has directed NNPCL to increase oil production to 2.5 million barrels per day (bpd) by 2026, up from the initial target of 2 million bpd.
🏗️ Infrastructure & Policy Developments
- Dangote Refinery’s International Expansion: Dangote Petroleum Refinery and Petrochemicals has partnered with Vinmar Group to export polypropylene, produced at its $2 billion Lagos plant. This facility, with an annual capacity of 830,000 metric tonnes, aims to reduce Nigeria’s reliance on polypropylene imports.
- Modular Refinery in Abia: The Nigerian government has approved the establishment of a modular refinery in the Abia Industrial and Innovative Park, located in the oil-rich Owaza area. This initiative is expected to boost local refining capacity and reduce fuel imports.
- Ajaokuta–Kaduna–Kano (AKK) Gas Pipeline: The AKK pipeline, designed to transport natural gas from Ajaokuta to Kano, is expected to be completed in the first quarter of 2025. This project aims to enhance domestic gas supply and support industrial growth.
⚠️ Challenges & Regulatory Actions
- Oil Spill Incidents: Renaissance Africa Energy reported an oil spill caused by an illegal connection on its Okordia-Rumuekpe pipeline in Rivers State. This incident underscores ongoing challenges related to pipeline vandalism and environmental concerns.
- NUPRC’s Revenue Target & Gas Flaring Commitment: The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) aims to generate ₦15 trillion in revenue by 2025, focusing on increasing oil and gas production. Additionally, the commission is committed to achieving zero gas flaring, aligning with the Nigeria Gas Commercialisation Programme.
📉 Market Performance
- NGX Oil & Gas Index Performance: As of March 2025, the NGX Oil & Gas Index recorded a -7.82% year-to-date return, making it the worst-performing sector on the Nigerian Exchange Limited. Factors contributing to this decline include delayed dividend payouts and unimpressive 2024 financial results from listed oil and gas companies.