Nigeria’s oil and gas industry is undergoing a major transformation as local oil companies now produce more than half of the country’s total crude oil output. This development marks a new chapter in Nigeria’s energy sector, driven by the exit of international oil majors from onshore and shallow water operations.
According to a report published by Reuters on Tuesday, quoting data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), indigenous oil firms have increased their share of Nigeria’s crude production from around 40% to over 50%. This shift highlights the growing influence of local players in the upstream oil industry and signals their readiness to support the Federal Government’s goal of increasing daily crude oil output by one million barrels in the coming year.
The rise in indigenous participation follows a series of divestments by multinational oil giants such as Shell, ExxonMobil, TotalEnergies, and ENI. These companies have sold off their onshore and shallow water assets in Nigeria as they shift focus to more profitable and less challenging deepwater operations. This move opened the door for Nigerian-owned companies to take the lead.
Green Energy International Limited recently made history by beginning operations at Nigeria’s first fully indigenous onshore crude export terminal in Otakikpo, located within Oil Mining Lease (OML) 11 near Port Harcourt. The terminal, which has a capacity of 360,000 barrels per day, handled its first crude cargo with the help of Shell’s trading division. This facility is expected to help evacuate crude from over 40 marginal oil fields that had previously been unable to get their oil to export terminals.
Similarly, Conoil Producing Limited exported the first cargo of its new Obodo crude blend from the OML 150 block. The cargo was lifted by Oando Trading, a subsidiary of Oando Plc. This is part of Oando’s broader upstream expansion after acquiring ENI’s divested Nigerian assets.
Another key player, Renaissance Africa Energy, which recently acquired Shell’s onshore assets, has promised to invest $15 billion over the next five years. The company is targeting significant increases in oil and gas production, especially once the domestic pipeline it is currently building becomes operational.
Seplat Energy is also making strong moves. The company is in the process of acquiring ExxonMobil’s shallow water assets and has announced plans to reopen over 400 shut-in wells. Seplat’s Chief Executive Officer, Roger Brown, revealed at the company’s annual general meeting that they plan to invest $320 million this year alone on drilling and infrastructure. The goal is to raise production to 140,000 barrels per day.
“We are focused on reviving existing wells, expanding drilling campaigns, and increasing gas volumes,” Brown said.
Analysts believe this growing role of local oil companies fits well with the reforms introduced by the Federal Government under the Petroleum Industry Act. The law aims to create a more efficient and investment-friendly oil and gas sector. It also supports the participation of Nigerian firms in the upstream sector, helping the country retain more value from its oil wealth.
Despite the progress, experts warn that local oil producers still face several challenges. These include high operational costs, insecurity in oil-producing regions, pipeline vandalism, community unrest, and ageing infrastructure. Mikolah Judson, an analyst with global risk consultancy firm Control Risks, said, “A key aspect of reducing costs for operators will be addressing these challenges comprehensively.”
Even with these issues, stakeholders in the oil and gas industry are hopeful that increased local participation will help Nigeria reverse its recent production declines and ensure greater energy security. The shift also has the potential to boost job creation, increase government revenue, and attract further investment in the sector.
As indigenous companies continue to take charge of oil production, many believe that Nigeria is entering a more sustainable era in its energy journey. The move from international to local control may strengthen Nigeria’s position in the global oil market while giving local firms more opportunities to grow and compete.
