• Gas agenda to generate 3 GW of power, support fuel diversification

Frank Okon

Nigeria’s oil and gas industry may be entering a new phase of growth, as sweeping reforms, rising investor interest, and a stronger push toward energy transition begin to reshape the sector.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says current policies are aligning the industry with national economic priorities, including energy security, diversification, and global decarbonization goals.

At the center of this effort are measures to deepen local capacity, retain more industry activity within the country, and expand the use of local content.

Speaking at the Offshore Technology Conference in Houston, the Commission’s Chief Executive, Mrs. Oritsemeyiwa Eyesan, described the ongoing changes as part of a broader strategy to extract greater value from Nigeria’s vast hydrocarbon resources.

That shift appears to be gaining traction. Nearly 300 local and international firms are now competing for about 50 oil blocks in the country’s 2025 licensing round, a level of interest that signals renewed confidence in Nigeria’s upstream sector.

“We only have 50 assets, but almost 300 applicants. That tells you the opportunities are significant,” Eyesan said.

She linked the surge to the Petroleum Industry Act (PIA), widely seen as a landmark reform that has improved regulatory clarity and reduced uncertainty for investors. Beyond the law itself, she said the government has continued to fine-tune fiscal terms to remain competitive in a tight global market for capital.

The impact of these reforms is also being felt across the value chain. Increased indigenous participation, fresh investment flows, and gradual recovery in the midstream and downstream segments are helping to improve efficiency in gas commercialization, refining, and power generation.

At the same time, Nigeria is under pressure to balance growth with environmental responsibility. The country has set ambitious targets to end routine gas flaring by 2030 and achieve net-zero emissions by 2060.

Progress is already visible. Gas flaring has dropped to below 10 percent, according to the regulator, supported by stricter enforcement and a shift toward commercialization.

Rather than simply penalizing companies for flaring gas, the government is now pushing to convert it into economic value.

Under the gas flare commercialization programme, flare sites are being allocated to investors who can turn the gas into usable energy, with the potential to generate up to three gigawatts of electricity.

For a country where power supply remains a major constraint, the initiative could have far-reaching impact.

Natural gas, Eyesan noted, is expected to play a central role as a transition fuel, helping Nigeria reduce emissions while supporting industrial growth and expanding electricity access.

Reforms are also extending downstream. The removal of fuel subsidies is beginning to shift consumption patterns, with compressed natural gas (CNG) emerging as a viable alternative, particularly in transportation.

Industry stakeholders say these changes are gradually restoring confidence in the operating environment. Chairman of the Petroleum Technology Association of Nigeria (PETAN), Wole Ogunsanya, said the country is making progress toward boosting refining capacity, which is approaching one million barrels per day.

Still, challenges remain. About 500,000 barrels per day of installed refining capacity is currently idle, pointing to gaps in crude supply, infrastructure, and investment.

Ogunsanya said scaling production to three million barrels per day within five years will depend on stronger partnerships, improved technology, and sustained upstream investment. Higher output, he added, is essential not just for domestic refining but also for meeting Nigeria’s obligations under OPEC.

Taken together, the combination of policy reforms, rising investor interest, and a clearer energy transition pathway is reshaping expectations for the sector.

For Nigeria, long seen as Africa’s largest oil producer but often constrained by uncertainty and underinvestment, the current momentum could mark a decisive turning point, if sustained.