How oil and gas sector fared in 2025
The Nigeria’s energy sector is one of the targeted industries the incumbent administration uses to push its Renewed Hope Agenda- a socio-economic rebirth designed to restore the country on the path of growth. The administration of Bola Tinubu explained that the country’s energy sector needed reinvigoration to match its pace of industrialization. In 2025, the […]
dangote and nnpc
The Nigeria’s energy sector is one of the targeted industries the incumbent administration uses to push its Renewed Hope Agenda- a socio-economic rebirth designed to restore the country on the path of growth.
The administration of Bola Tinubu explained that the country’s energy sector needed reinvigoration to match its pace of industrialization.
In 2025, the government indeed introduced reforms to put the sector in good position and woo investors, though the development was not enough to free it from the age-long hitches which had marked down the country.
In the outgoing year, the Nigerian Upstream Petroleum Regulatory Commission inked a deep offshore PSC with NNPC, TotalEnergies, and South Atlantic Petroleum for PPLs 2000 & 2001, based on crude and gas.
In the same year, Renaissance Africa Energy completed the purchase of Shell’s Nigerian subsidiary, Shell Production Development Company
The Federal Government also approved over O40 FDPs, unlocking 1.7bn barrels, 7.7tn cubic feet gas) and attracting over $20bn in capital, with key FIDs for Bonga North and Ubeta Gas.
Besides, in 2025, FIRST E&P penned a long-term Gas Supply Agreement (GSA) with NLNG, while Shell secured a deal to supply gas to a major steel company in Ogun.
President Tinubu approved the launch of the 2025 Licensing Round in December, offering 50 blocks (onshore, shallow, deepwater) to attract investment and boost exploration.
This gives flexibility to operate under Concession or PSC frameworks, with lower signature bonuses and tailored financial requirements.
In 2025 alone, 43 new Field Development Plans (FDPs) were approved, unlocking 1.7 billion barrels of oil and 7.7 trillion cubic feet of gas.
Oil output increased hugely in mid-2025, with July reaching 1.71 million barrels per day (bpd) (including condensates).
Besides, gas-to-power supply reached its strongest levels in three months by July 2025, indicating a focus on domestic utilization.
The year also witnessed the launch of Project IMMBOPD which is the government’s ambitious drive to add 1 million barrels per day (MMBOPD) to production.
The government issued flare gas utilization permits aimed at monetising flared gas in the outgoing year.
In the outgoing year, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recorded average daily petrol supply of 71.5 million litres on account of increased imports and some domestic output from the Dangote Refinery), while daily consumption lessened to 52.9 million litres.
In 2025, the government reported that the supply of cooking gas jerked up by 11% a month before the end of the year.
In 2025, persistent insecurity and community issues continue to drive multinational oil companies to divest onshore, impacting revenue and exploration.
While indigenous firms are growing, concerns exist about their ability to aggressively expand exploration and production compared to majors.
Nigeria is therefore confronted with the challenge of ramping up production in order to help in actualising the government’s fiscal projection.
Nigeria’s production currently hovers around 1.7m barrel per day but actual production is still below its assigned production quota by the Organisation of Petroleum Exporting Countries (OPEC).
The last time the country met its target was in July 2025, highlighting persistent challenges in sustaining output growth.
OPEC data shows that Nigeria averaged 1.444 million bpd in the third quarter (Q3) of 2025, lower than the 1.481 million bpd recorded in Q2 and 1.468 million bpd in Q1. The trend underscores ongoing struggles in stabilising production despite renewed investments and government efforts in the upstream sector.
Also, the NNPC/Heirs Energies OML 17 Joint Venture advanced Nigeria’s gas commercialisation and environmental stewardship agenda with the signing of Gas Flare Commercialisation Agreements under the Nigerian Gas Flare Commercialisation Programme (NGFCP) and approved Non-NGFCP frameworks.
Under the programme, the partners aimed to eliminate 18m standard cubic foot (scf) of flared gas and reduce the impact of gas flaring.
The ceremony marks a significant transition from regulatory approvals to structured commercial execution, enabling flare gas volumes across OML 17 to be captured and deployed for productive use, including power generation, industrial applications, LPG and CNG, in alignment with Nigeria’s gas development priorities and energy-transition objectives.
At the agreement signing were Heirs Energies, as operator of the OML 17 Joint Venture, and approved flare gas offtakers – AUT Gas, Twems Energies, Gas & Power Infrastructure Development Limited (GPID), PCCD and Africa Gas & Transport Company Limited (AGTC) – under frameworks designed to eliminate routine flaring while converting previously wasted resources into economic value.
CEO of Heirs Energies Limited, Osa Igiehon in a note to stakeholders observed that market volatility, operational complexity, and heightened stakeholder expectations “tested resilience and systems.”
“At Heirs Energies, we remained firmly anchored on fundamentals. We prioritised safety, executed with discipline, and stayed focused on protecting long-term value.
Safety remained our first priority throughout the year. We sustained an exceptional safety performance, recording 1,780 LTI-free days and over 9 million LTI-free manhours, reflecting a deeply embedded safety culture across our operations and the shared responsibility of our workforce,” he added.
Kunle Stevenson, an oil and gas policy analyst, told Daily Trust that 2025 marked a significant rebound for Nigeria’s oil and gas sector.
Crude oil production grew by over 20 percent, reaching approximately 1.7 million barrels per day in Q2, driven largely by divestments to indigenous operators and improved asset efficiency, he said.
According to him, the progress puts Nigeria back on a credible path toward its 2 million bpd medium-term target.
He said the operationalisation of the Dangote Refinery materially reduced import dependence, saving the economy trillions of naira in the first quarter alone and stabilising domestic fuel supply.
Regulatory institutions—particularly NMDPRA—improved transparency through verified supply data and market fact sheets, reinforcing confidence in downstream resilience.
He added: “That said, challenges persist. Refining disputes, infrastructure outages, pipeline vandalism, and legacy import habits continue to test the system. However, these issues are increasingly marginal when weighed against the broader gains in forex conservation, competition-driven pricing, job creation, and regulatory clarity.
“In sum, 2025 can be described as a transition year—one in which structural reforms began translating into measurable outcomes. The task ahead is to consolidate these gains through consistent policy enforcement, infrastructure protection, and a balanced market framework that favours domestic value creation.”
NNPCL plans new oil fields, targets $30bn investment by 2030
Meanwhile, the Nigerian National Petroleum Company Limited (NNPC Ltd) has disclosed plans to develop new oil fields from 2026 and aims to raise at least $30 billion by 2030.
According to a report by Bloomberg, the fundraising drive forms part of a broader strategy to revive Nigeria’s oil and gas sector.
The officials, quoted by Bloomberg, said NNPC anticipates key investment decisions as early as 2026, while also reviewing its asset portfolio with plans to divest non-performing oil fields to unlock capital and improve efficiency.
People familiar with the plans, according to Bloomberg, said NNPC will pursue a mix of in-house field development and investor-led projects, with a competitive bidding process expected to commence early next year.
As part of the strategy, the company is reviewing its portfolio and plans to sell non-performing oil fields, a move expected to help it raise more than half of its $30 billion target through asset sales and fresh investments.
“NNPC Ltd’s investment push comes against the backdrop of declining oil output and years of capital flight from Nigeria’s upstream sector, driven by regulatory uncertainty, security challenges, and delayed project approvals.”
“Although Nigeria holds some of Africa’s largest hydrocarbon reserves, several oil discoveries have remained undeveloped for years due to funding constraints. The incorporation of NNPC Ltd under the Petroleum Industry Act (PIA) was designed to reposition the company as a commercially driven entity capable of attracting private capital and operating independently of government funding,” the report said.