Nigeria’s oil and gas industry is witnessing two contrasting developments that underscore both the challenges and opportunities facing the country’s energy sector, according to the African Energy Council.

In a post shared on LinkedIn, the council noted that output from international oil company (IOC)-operated deepwater assets has declined significantly, falling to about 352,000 barrels per day (bpd) in early 2026. The figure represents roughly half of the production recorded from the same fields six years ago.

The decline comes at a time when Nigeria is seeking to boost crude oil production and attract fresh investment into its upstream sector, particularly in deepwater operations where substantial untapped reserves remain.

In contrast, the council highlighted the achievement of the Dangote Petroleum Refinery, which reached its full nameplate processing capacity of 650,000 bpd in February 2026. The development marks a major milestone for Africa’s refining industry and is expected to strengthen Nigeria’s domestic fuel supply while reducing reliance on imported petroleum products.

However, the council pointed to continued challenges in the state-owned refining segment. Despite billions of dollars invested in rehabilitation projects, the three refineries operated by the Nigerian National Petroleum Company Limited (NNPC) in Port Harcourt, Warri and Kaduna, with a combined installed capacity of 445,000 bpd, remain non-operational and are producing no output.

According to the African Energy Council, the contrasting fortunes of Nigeria’s upstream and downstream sectors place increasing responsibility on the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to maintain a stable and predictable investment climate.

The council noted that recent signals from major energy companies, including TotalEnergies and Chevron, suggest renewed interest in investing in Nigeria’s oil and gas sector. It stressed that while policy measures and executive actions can improve government revenue and industry performance in the short term, sustaining investor confidence requires consistency and long-term regulatory certainty.

“With TotalEnergies and Chevron both signalling renewed appetite for Nigeria, the regulatory environment needs to stay predictable. One EO can improve remittances; sustained investor confidence takes years to build and minutes to lose,”  the council stated.

The Nigeria’s oil industry have never been more disconnected, or more interdependent. Getting both right, at the same time, is the real task ahead.”