Local Firms Propel Nigeria’s Oil Sector Growth: A New Era of Indigenous Energy Leadership
Nigeria’s oil and gas sector is experiencing a significant transformation as local companies take the lead in driving growth and innovation. With international oil majors like Shell, ExxonMobil, and ENI divesting from onshore and shallow water assets, indigenous firms have stepped in, now accounting for over 50% of the country’s crude oil production—a notable increase from approximately 40% in recent years.
Key Developments and Investments
Green Energy International Ltd: Launched Nigeria’s first locally built and operated onshore crude terminal at Otakikpo in the OML 11 block, enhancing capacity and potentially unlocking over 40 stranded fields.
Conoil Producing Limited: Successfully shipped the first cargo of its new Obodo crude blend, marking a milestone in indigenous crude production.
Oando Trading: Facilitated transactions following the acquisition of ENI’s divested assets, strengthening its position in the trading segment.
Renaissance Africa Energy: Announced plans to invest $15 billion over five years, aiming to double gas output in alignment with the completion of a scheduled gas pipeline.
Seplat Energy: Following its acquisition of ExxonMobil’s shallow-water assets, Seplat plans to invest up to $320 million in 2025 to reopen 400 wells, targeting an increase in production to 140,000 barrels per day.
Government Support and Policy Initiatives
To bolster efficiency and attract investment, President Bola Tinubu enacted the Upstream Petroleum Operations Cost Efficiency Incentives Order 2025. This executive order offers tax credits up to 20% of annual tax obligations for operators achieving industry-recognized cost savings, aiming to create a more competitive and efficient oil and gas industry.
Challenges Ahead
Despite these advancements, local firms face challenges, including high costs due to security issues, community disputes, and aging infrastructure. Addressing these concerns is crucial for sustaining growth and achieving the government’s objective to increase oil output by an additional 1 million barrels per day.
The proactive involvement of indigenous companies marks a pivotal shift in Nigeria’s oil sector, reflecting a broader commitment to national development and improved public services.
For more detailed information, you can read the full article on Reuters.
