Nigeria’s petroleum sector is experiencing a dramatic reversal of fortune following years of declining production, capital flight, and investor uncertainty, with the Minister of State for Petroleum Resources disclosing that the country approved 28 new Field Development Plans valued at $18.2 billion in 2025 alone, unlocking an estimated 1.4 billion barrels of crude oil reserves.
The transformation represents one of the most significant policy shifts in the sector’s recent history, marking what government officials describe as a decisive break from the stagnation that had characterised the industry under previous administrations. The approval of these plans, combined with a surge in major investment decisions and renewed drilling activity, signals that international confidence in Nigeria’s petroleum sector has substantially recovered following years of regulatory uncertainty and fiscal instability.
The disclosure came Tuesday during the official opening of the 2026 Nigeria International Energy Summit at the Presidential Banquet Hall in Aso Villa, Abuja. Vice-President Sen. Kashim Shettima, representing President Bola Tinubu, presided over the event that drew together government officials, industry leaders, and international investors to assess the sector’s trajectory.
The Minister’s remarks situated Nigeria’s recovery within a broader African and global context, suggesting that the country’s petroleum sector has not simply stabilised but has positioned itself as the continent’s most attractive energy investment destination—a status that appeared unrealistic just three years ago when production had fallen to historic lows and major international oil companies were divesting rapidly from Nigerian operations.
cline**Senator Heineken Lokpobiri, the Minister of State for Petroleum Resources, characterised the achievements as evidence of how policy certainty and consistent governance can fundamentally reshape investor behaviour in capital-intensive industries. Between 2024 and 2025, he noted, four of the seven major Final Investment Decisions announced across the entire African continent were in Nigeria—a concentration of investment activity that would have seemed improbable during the preceding years when Nigeria’s share of global oil investment had contracted significantly.
“The story of Nigeria’s petroleum sector is being rewritten,” Lokpobiri stated, articulating the administration’s framing of recent developments as a comprehensive sectoral transformation rather than merely incremental improvements.
The recovery has been built on several reinforcing policy changes. The full implementation of the Petroleum Industry Act, which Lokpobiri described as providing “a stable fiscal framework, improved licensing processes, strengthened regulation, protected host communities, and ensured predictable contractual terms,” established the legal and regulatory foundation upon which recent investment decisions have been made. This legislation, years in the development and contentious in its design, has effectively replaced an opaque and unstable fiscal regime with one that international operators characterise as transparent and professionally administered.
Complementing the Petroleum Industry Act, the Upstream Petroleum Operations (Cost Efficiency Incentives) Order 2025 has further enhanced the sector’s competitiveness by introducing targeted tax credits designed to reduce production costs. This measure, released recently, suggests the government’s continued commitment to maintaining competitive advantage as global oil markets navigate energy transition dynamics and as alternative energy sources gain greater prominence.
One of the most consequential developments has been the acceleration of asset transfers from international oil companies to capable Nigerian operators—transactions that had been stalled for years but have now been concluded in what government officials describe as record time under Tinubu’s administration.
These transfers represent far more than simple commercial transactions. They embody what Lokpobiri characterised as “transfers of confidence, capability, and ownership,” a formulation that captures the symbolic significance these movements carry within Nigeria’s petroleum sector narrative. When international majors divest from a country, the conventional interpretation reads as lack of confidence. Conversely, when they divest to capable domestic operators, the narrative shifts toward technological and operational transfer, Nigerian capacity building, and sustained commitment to the jurisdiction.
The roster of transfers is substantial and speaks to the breadth of the restructuring. Shell has divested assets to Renaissance; ExxonMobil has transferred operations to Seplat; Eni has divested to Oando. These movements have collectively resulted in an additional 200,000 barrels of oil per day in national production—a figure that, while representing only a portion of the targeted production increases, demonstrates that these transfers have translated into material production gains under new Nigerian operators.
The government has deliberately liberalised the licensing framework to enable these transactions, recognising that the previous system’s opacity and unpredictability had discouraged both divestment and new investment. By establishing clear, transparent, and professionally administered processes, policymakers have created conditions under which international companies feel confident divesting to domestic players, and domestic players feel confident acquiring assets at prices that allow for profitable operation.
The production metrics reveal the tangible results of these policy and operational changes. Project One Million Barrels, inaugurated in October 2024, has driven national crude oil production to between 1.7 and 1.83 million barrels per day—an increase of approximately 300,000 barrels per day within a single year. This trajectory, if maintained, would represent the most substantial production growth Nigeria has achieved in more than a decade.
The revival of drilling activity provides additional evidence of sector confidence. The number of active drilling rigs has risen sharply from just 14 in 2023 to over 60 currently—a more than quadrupling of rig activity within approximately two years. This surge in drilling represents one of the most visible indicators of renewed capital investment, as drilling rigs are expensive to mobilise and operate, and their deployment signals operator confidence in sustained future demand and regulatory stability.
The parade of major Final Investment Decisions by international operators underscores this recovery in confidence. Shell has announced a $5 billion investment in the Bonga North project—a deep-water development that requires multi-year planning and represents substantial commitment to Nigeria’s upstream sector. TotalEnergies has committed $550 million to the Ubeta project, while Shell has approved an additional $2 billion investment in its HI project. Chevron has announced $1.8 billion in investment for the Panther project.
Most significantly, Shell has indicated plans for a $20 billion Final Investment Decision, with company officials suggesting that additional major projects from other operators are anticipated in the near term. These figures, aggregated, demonstrate that international oil majors have fundamentally reassessed Nigeria’s investment risk profile and have concluded that the country merits substantial capital commitments despite the existence of alternative investment jurisdictions.
The timing of these announcements is politically significant. They arrived during a period when global energy markets face considerable uncertainty regarding energy transition timelines, the endurance of fossil fuel demand, and the geopolitical implications of shifting energy systems. That major international operators have nonetheless committed billions to Nigerian petroleum developments suggests confidence that hydrocarbons will remain economically significant for decades, and that Nigeria specifically will remain a valued source of supply.
The government’s sectoral strategy extends beyond upstream production to encompass downstream processing and regional positioning. The removal of fuel subsidies, a politically controversial decision that Lokpobiri credited with stabilising market conditions and improving product availability, has created space for private investment in refining capacity. The minister specifically commended indigenous investors such as Dangote and BUA for expanding refining and midstream infrastructure—investments that would have been economically unviable in an environment characterised by price controls and subsidy distortions.
Nigeria’s newly launched West African Reference Market represents an explicit strategy to position the country as the refining hub for the Gulf of Guinea and the wider African region. This positioning reflects recognition that Africa’s energy needs will expand significantly as the continent’s population and economies grow, and that Nigeria—with substantial crude oil production, developed downstream infrastructure, and geographic centrality—can capture value by processing crude oil for regional markets rather than merely exporting raw materials.
Lokpobiri highlighted the economic imperative underlying this strategy. Africa, he stated, spends over $120 billion annually on hydrocarbon imports—a figure he characterised as “a significant drain on the continent’s economy.” By developing indigenous refining capacity and positioning itself as a regional energy hub, Nigeria can simultaneously reduce the continent’s import bill and capture economic value that would otherwise accrue to refiners outside Africa.
The minister used the platform to advocate for greater international support for the African Energy Bank, headquartered in Nigeria, as an instrument for mobilising capital to finance Africa-focused energy development. This positioning reflects a broader strategic vision in which Nigeria situates itself not merely as an energy producer but as an institutional leader in African energy finance and policy.
Lokpobiri’s emphasis on the African Energy Bank, combined with his articulation of Africa’s energy strategy as prioritising “availability, accessibility, and affordability,” frames Nigeria’s petroleum sector expansion within a continental development narrative. This framing serves multiple functions: it positions petroleum development as supporting African development rather than as merely extractive; it identifies Nigeria as a continental leader in energy policy; and it appeals to international investors who increasingly face pressure to demonstrate development impact alongside financial returns.
The minister’s citation of forecasts from the International Energy Agency and OPEC—both of which project that “fossil fuels will remain dominant in the foreseeable future”—provides the intellectual foundation for the government’s continued emphasis on petroleum sector development. These forecasts, from widely respected global institutions, allow the government to argue that petroleum development is not a backward-looking strategy but rather a realistic assessment of global energy demand trajectories.
Lokpobiri emphasised that the investment climate transformation has been deliberate and multi-faceted. The government has enabled “free movement of capital,” allowing companies to “invest and divest at will” in accordance with global best practice standards. This framing—positioning Nigeria as aligned with international norms rather than as imposing distinctive restrictions—appears calculated to appeal to international operators accustomed to operating across multiple jurisdictions.
The liberalisation of licensing processes to “ensure transparency and fairness” addresses one of the historical criticisms of Nigeria’s petroleum sector: the opacity of decision-making and the perception that licensing decisions reflected political considerations rather than objective criteria. By emphasising transparency, the government signals institutional maturation and commitment to professional administration.
Perhaps the most consequential dimension of these developments is their reversal of years of capital flight from Nigeria’s petroleum sector. During the preceding decade, international companies had systematically reduced their presence, citing regulatory uncertainty, fiscal instability, and operational challenges. This exodus had been psychologically significant—it communicated to potential investors that the world’s most experienced petroleum operators had lost confidence in Nigeria’s investment environment.
The recent surge of investment announcements reverses this psychological dynamic. When Shell, ExxonMobil, TotalEnergies, and Chevron simultaneously announce major investments, they communicate that Nigeria has fundamentally addressed the concerns that prompted their earlier retreat. This signalling effect may prove as important as the capital itself, as it can influence decisions by smaller operators and service companies that follow the major companies’ lead.
The government’s ambitious projections suggest production targets that would see Nigeria increase output substantially from current levels, potentially approaching or exceeding the 2 million barrels per day target that has become the standard measure of sectoral success within government circles. Whether these targets prove achievable depends on numerous factors beyond policy—including global oil prices, the pace at which new projects commence production, the stability of security conditions in oil-producing regions, and the timing of operational challenges that inevitably affect complex petroleum operations.
The petroleum sector’s recovery remains politically significant at a moment when the government faces substantial pressure to diversify Nigeria’s economy and reduce dependence on hydrocarbon revenues. The minister’s remarks, however, suggest official commitment to maximising petroleum sector value while the commodities remain economically dominant—a position that reflects both economic pragmatism and political calculation.
Lokpobiri’s call for “global investors to partner with Nigeria not just as financiers, but as long-term collaborators in driving Africa’s energy-led growth” articulates an aspiration that extends beyond conventional commercial relationships. It suggests a vision in which petroleum development becomes intertwined with broader African development objectives—a framing that attempts to situate the sector within narratives of continental progress rather than merely extractive resource exploitation.
