Nigeria’s Oil and Gas Sector Reawakens: Fresh Reserves, Frontier Prospects, and Billions in New Investments Signal Opportunity

Nigeria’s Oil and gas sector is witnessing a resurgence as growing reserves, strategic infrastructure projects, and renewed investment commitments by global energy players converge to create unprecedented opportunities.

Recent data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed that the country’s natural gas reserves rose to 210.54 trillion cubic feet (TCF) as of January 1, 2025—up from 209.26 TCF the previous year. The country’s crude oil and condensate reserves now stand at a combined total of 37.28 billion barrels. Specifically, crude oil reserves are at 31.44 billion barrels, while condensate reserves account for 5.84 billion barrels—reinforcing the nation’s positioning as an oil and gas-rich economy.

While gas is emerging as the cornerstone of Nigeria’s energy transition strategy, oil exploration and production remain vital to government revenue, employment, and foreign exchange. The federal government is therefore pushing a dual strategy: maximize value from existing oil reserves while aggressively developing gas resources and opening frontier inland basins to exploration.

In line with this strategy, Nigeria secured over $8 billion in investments for deepwater and gas projects within a year—up from the $6.7 billion announced in 2024—signaling growing investor confidence in the sector’s long-term prospects. However, despite this influx of capital, the country continues to grapple with low oil production, which remains below 1.5 million barrels per day (mbpd), far short of the 2025 target of 2.06 mbpd. This shortfall, coupled with global oil price volatility, poses a serious risk to projected revenues.

According to credit rating agency Agusto & Co, Nigeria’s ability to scale up oil production in the near term is limited unless significant investments are made in the upstream sector. The agency attributes the challenge to persistent crude theft and deteriorating infrastructure.

“Given persistent crude theft, aging infrastructure, and Nigeria’s OPEC+ quota (1.5 mbpd), sustainably increasing output by even 200,000–300,000 bpd in the short term appears unlikely without urgent reforms and substantial capital injection,” Agusto & Co stated in April.

Renewed Upstream Investment Commitments

Key players in Nigeria’s upstream oil and gas sector are renewing their investment commitments, encouraged by reforms under the Petroleum Industry Act (PIA) and new commercial incentives aimed at revitalizing the industry.

In December 2023, Shell announced plans to invest over $1 billion in Nigeria’s oil and gas sector over the next decade. The investment is part of the company’s broader strategy to expand its gas footprint and contribute to the nation’s energy security.

A year later, in December 2024, Shell took the Final Investment Decision (FID) on the Bonga North deep-water project. The project, which involves drilling 16 wells and upgrading the existing Bonga Floating Production Storage and Offloading (FPSO) facility, is expected to deliver up to 110,000 barrels of oil per day at peak production.

This development follows a similar move by TotalEnergies and its partners—NNPC Ltd, CNOOC, and Sapetro—who committed $550 million to the Ubeta gas and condensate field in OML58, Rivers State. The field is scheduled to come onstream in 2027 and will produce 350 million standard cubic feet of gas per day and 10,000 barrels of oil daily. The output is expected to serve as feedstock for the NLNG Train 7 project.

TotalEnergies has also reaffirmed its commitment to the Bonga North Offshore project. During an October 2024 meeting with Nigeria’s Minister of State for Petroleum Resources (Oil),, Nicolas Terraz, President of Exploration and Production at TotalEnergies, confirmed that the company’s board had approved the investment. He praised the Nigerian government’s efforts to improve the business environment.

“TotalEnergies is glad to see the positive steps taken by the Nigerian government in creating a conducive environment for business. We remain committed to further deepening our investments in Nigeria, especially with the opportunities that projects like Bonga North Offshore and our joint ventures with SPDC and NNPCL present,” Terraz said in a statement released by the Minister’s Special Adviser on Media and Communication, Nneamaka Okafor.

Looking ahead, further investment is anticipated in Nigeria’s oil and gas industry. TotalEnergies is expected to reach FID on a $750 million offshore gas project in 2025, while Nigeria targets $30 billion in deep offshore investments by 2029.

These developments reflect growing investor confidence in Nigeria’s upstream sector and highlight the country’s strategic shift toward non-associated gas development—an essential pillar of the government’s Decade of Gas initiative. However, International Oil Companies (IOC) are divesting their onshore and shallow water assets to indigenous operators to focus on deepwater operations. And it remains to be seen if the beneficiary indigenous operators have the resources to accelerate production in these terrains.

Frontier Basins Open New Horizons for Oil Exploration

Beyond the traditional Niger Delta terrain, Nigeria is increasingly turning its attention to frontier basins, where significant untapped oil and gas potential lies. Basins in the northern part of the country are now receiving heightened exploration focus, driven by the Nigerian National Petroleum Company Limited (NNPCL).

The federal government hopes that discoveries in these inland regions will not only boost the nation’s crude oil reserves but also spur regional development, enhance security, and decentralize energy production. Under the PIA, frontier exploration now benefits from a dedicated fund designed to attract investor interest in these previously underexplored areas.

Nigeria aims to increase its crude oil reserves from the current 37.28 billion barrels to 50 billion barrels in the short to medium term. Similarly, the country seeks to grow its proven gas reserves from 210.5 TCF to 250 TCF. The country’s upstream strategy includes bid rounds, reserve growth, production increases, and lowering the cost of production per barrel.

With the conclusion of the 2020 Marginal Field Bid Round—where 57 marginal oil fields were awarded—and that of the 2022/2023 Deep Offshore Licensing Round and the 2024 Licensing Round—Nigeria expects to add more than 600,000 barrels of crude oil per day to its production volume in the coming years, once the fields come onstream.

Exploration activities in the frontier basins are central to Nigeria’s efforts to expand its oil and gas reserves. So far, around one billion barrels of crude oil have been discovered in the northern region.

Drilling began at the Ebenyi-A Well in Obi Local Government Area of Nasarawa State in March 2023. At the official spud-in ceremony, former President Muhammadu Buhari stated that the discovery and drilling of oil in Nasarawa would bring increased prosperity to Nigerians and enhance the country’s overall energy security. He added that surrounding communities would particularly benefit from the economic value created by exploration and eventual production activities.

NNPCL also plans to resume crude oil drilling at the Kolmani oil field, located along the Bauchi-Gombe border.

“We will continue to work with the government in Kolmani and other areas. Besides the oil drilling work, we will also ensure that we complete the gas pipeline project from Ajaokuta to Kano,” said NNPCL’s Group Chief Executive Officer, Engr. Bayo Ojulari, in a recent interview with the BBC.

“The projects would allow the previously closed businesses to be reopened so that they could continue to operate and open new ones. This will create benefits in the region, which will lead to the benefit of everyone because the wealth will grow. We have to go back and carry on with this work.”

According to former President Buhari, the Kolmani oil and gas project has attracted over $3 billion in investment. The Kolmani Integrated Development Project is a fully integrated, in-situ initiative encompassing upstream production, oil refining, power generation, and fertilizer production.

In May 2023, Buhari also flagged off the resumption of oil and gas exploration activities in the Chad Basin, expressing optimism that the successes recorded in Kolmani River-2 and Nasarawa would be replicated in the region.

Political Skepticism Over Frontier Activities

However, not everyone shares this optimism. Professor Wumi Iledare, a petroleum economist, has raised concerns about the timing and motivations behind the renewed focus on Northern frontier basins. According to him, such campaigns often coincide with election periods, creating a pattern that raises questions about political motives.

With Nigeria’s next general election slated for 2027 and President Bola Tinubu expected to seek re-election, Iledare warns against confusing genuine exploration efforts with electoral tactics. He cautions that the country must distinguish between evidence-based policy decisions and narratives shaped by political strategy.

“As Nigeria inches closer to the 2027 general elections, familiar patterns are beginning to emerge — not least of which is the renewed spotlight on oil and gas exploration in the Northern Basins,” Iledare wrote in an opinion piece. “It is a recurring ritual, timed with uncanny precision to coincide with electoral cycles. The narrative is almost always the same: ‘historic discovery,’ ‘untapped reserves,’ and the promise of economic transformation. But a closer look reveals that these announcements often lack technical depth and regulatory backing.”

Under the PIA, the Minister of Petroleum—formally designated as the “MINISTER”—has the authority to approve hydrocarbon licenses, but regulatory oversight lies with the NUPRC. Misrepresenting this separation of powers—whether by political actors or media outlets—undermines the legal and institutional reforms the PIA aims to enforce, Iledare argues.

“So, are we witnessing genuine policy moves or another round of executive theatrics?” Iledare questioned. “Is this a case of journalistic sensationalism, or a calculated attempt to influence public perception in the build-up to elections?”

He concluded that the resurgence of interest in the Northern Basins appears to be more symbolic than substantive, often resurfacing with intensity in pre-election years—a sign that electoral considerations may be influencing Nigeria’s energy policy narrative.

Afreximbank’s $3 Billion Programme Supports Nigeria’s Energy Infrastructure

Nigeria’s push for broader energy security is also receiving backing from international financial institutions. The African Export-Import Bank (Afreximbank) recently launched a $3 billion Intra-African Oil Import Facility, designed to help African countries, including Nigeria, finance the import and distribution of petroleum products and refine their own crude.

Already, $1.3 billion has been disbursed across the continent, and Nigeria’s refining aspirations—such as the rehabilitation of state-owned refineries, modular refinery projects and the commencement of operations at the Dangote Refinery—could benefit from such financing.

This injection of liquidity can also catalyze private-sector downstream investment, particularly in logistics, storage, and marketing.

The programme prioritizes supply from African-based refineries and is designed to support governments, state-owned enterprises, oil traders, and financial institutions involved in fuel importation.

Afreximbank’s portfolio already includes major investments in Nigeria’s Dangote Refinery, Angola’s 200,000 barrels-per-day Lobito Refinery, and other facilities such as the Cabinda, Port Harcourt, Bua, and Azikel refineries. Collectively, these projects are expected to exceed 1.3 million barrels per day in refining capacity—positioning the Gulf of Guinea as both a regional and global refining hub.

The initiative also involves Afreximbank’s affiliate, ATDC Minerals (ATMIN), to facilitate trade and financing operations. Approved participants will have access to financial instruments such as Letters of Credit, direct prepayments, and discounting arrangements—subject to due diligence.

Afreximbank President, Prof. Benedict Oramah, described the initiative as a catalyst for transforming the Gulf of Guinea into a major refining center.

“Whilst the programme will have a direct impact on the volume of the refined petroleum products produced and consumed in Africa, it will also have a multiplier effect on the downstream petroleum value chain as it will catalyse critical investments in shipping and marine logistics for intra and extra African trade of crude oil and refined products. The multiplier effect will also be seen in marine cargo insurance and other ancillary businesses within the sector. We want to see an increased proportion of the about 4 mbpd of crude oil produced in the Gulf of Guinea refined in Africa,” Oramah said.

Malawian President Lazarus Chakwera praised the programme as a critical milestone on Africa’s path to energy independence, emphasizing its role in stabilizing fuel prices, strengthening supply chains, and improving quality of life.

“This programme is a clear demonstration of Africa’s resolve to take charge of its own energy future. We commend Afreximbank for this timely intervention, which stands to benefit African countries like Malawi by reducing import dependency, strengthening regional supply chains, and keeping more value within the continent. Most importantly, it will deliver real impact to our citizens by ensuring more stable and affordable access to refined petroleum products, which are essential to Malawians’ daily life and economic productivity,” Chakwera said.

Since Nigeria’s currency was floated in June 2023, the Naira has lost over 100 percent of its value. In Nigeria, petrol product imports account for most of the foreign exchange demand, with approximately $2.4 billion spent monthly on energy imports, according to estimates by Energy expert and Co-founder and CEO of Dairy Hills, Mr. Kelvin Emmanuel.

However, Nigeria has the potential to become a net exporter of refined petroleum products. In addition to the Dangote Refinery, which has a 650,000 barrels-per-day (bpd) capacity, the government owns three refineries with a combined capacity of 445,000 bpd. This is supplemented by various private modular refineries. But with the current oil production output of less than 1.5 mbpd, the growth opportunities cannot be fully harnessed, except there is uptick in oil production to meet domestic crude demands.

New Gas Reserves Strengthen Nigeria’s Energy Transition Path

With a Gas Reserves Life Index of over 90 years, Nigeria boasts one of the largest natural gas deposits in the world. Under the Decade of Gas strategy, the country is prioritizing gas as a cleaner, more sustainable alternative to oil, targeting its application in power generation, cooking, transportation, fertilizer production, and as industrial feedstock.

The Ubeta Project stands as a model for this transition. By integrating into existing infrastructure—including the Obite treatment center and NLNG facilities—it promises lower development costs, reduced carbon emissions, and faster commercialization. Coupled with the PIA’s improved fiscal framework, more compact and economically viable gas projects are expected to emerge.

Speaking during his keynote address at the 2025 Offshore Technology Conference (OTC), hosted by the Petroleum Technology Association of Nigeria (PETAN) in Houston, Texas, US, the Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, emphasized the need for decisive, unified action to unlock Nigeria’s vast gas reserves.

While reaffirming the federal government’s commitment to transforming Nigeria into a globally competitive, gas-powered economy, Ekpo cautioned that potential alone cannot drive progress. Action is what generates growth, he said, noting that the government is investing heavily in gas infrastructure—including pipelines, processing plants, and distribution systems—to ensure widespread access for electricity generation, industrial use, transportation, and domestic consumption.

“Nigeria holds over 210 trillion cubic feet of proven natural gas reserves; Africa’s largest and among the top ten globally,” Ekpo stated. “This resource is a divine gift, but it comes with a responsibility—to use it for sustainable development, job creation, industrialisation, and global energy security.”

He added that barriers to industrial gas utilization are being dismantled, with incentives introduced for sectors such as fertilizer production and modular gas hubs. Ekpo also highlighted innovative approaches like Floating LNG (FLNG) and new regional agreements, including the Nigeria–Equatorial Guinea Gas Pipeline, aimed at commercializing stranded gas and increasing exports.

The minister emphasized the importance of innovation and technology—such as digital oilfield solutions, low-carbon gas processing, and emissions monitoring—as critical enablers of the gas revolution.

Under the Decade of Gas initiative, natural gas has been declared Nigeria’s transition fuel toward achieving Net-Zero carbon emissions. The government has backed key infrastructure projects such as NLNG Train 7, the Ajaokuta-Kaduna-Kano (AKK) pipeline, the Nigeria-Morocco Gas Pipeline, the Trans-Saharan Gas Pipeline, and the National Gas Transportation Network Code.

Approximately 60 percent of the Nigerian Content Development and Monitoring Board’s (NCDMB) venture partnership investments are gas-based, spanning gas processing plants and LPG cylinders manufacturing. As Nigeria targets carbon neutrality by 2060, gas remains central to its energy transition strategy.

Meanwhile, the Chairman of Oida Group and energy expert, Engr. Emeka Ene, has called for increased private sector participation to unlock the full potential of Nigeria’s abundant natural gas resources. Speaking on the role of gas in the country’s economic transformation, Ene described energy as the “core of civilization,” asserting that Nigeria sits on a massive opportunity to drive industrialization and economic growth through gas utilization.

“Gas has a significant advantage of being more climate friendly than pure fossil fuels,” Ene told Majorwaves. “Wherever gas goes, light goes. Literally, gas is an enabler for economic activities.”

He emphasized that natural gas offers a cleaner alternative and a strategic bridge in Nigeria’s transition toward a more sustainable energy future.

Despite Nigeria’s significant gas reserves, Ene noted that progress has been hindered by structural and financial challenges. He explained that for a long time, domestic gas was regarded as an irritant, largely due to a pricing mechanism that failed to incentivize upstream investments.

“The infrastructure is aging, the power distribution network is aging or has aged and you have a situation where government cannot be the sole developer of gas infrastructure because huge amount of investment is required in the downside of gas to be able to install gas transportation network,” he said.
“So, the role of the private sector is key in all of these things.”

Ene highlighted the efforts of Xenergi, his energy company, which focuses on leveraging associated gas through modular systems that can be rapidly deployed across Nigeria. These modular solutions, he said, allow for flexibility, scalability, and the creation of long-term partnerships across the gas value chain.

He also commended the introduction of the Nigeria Gas Network Code, which he said has brought a much-needed framework for gas business operations. According to him, the network code has helped unlock upstream value and create a real gas business, although some issues remain.

One major challenge, he noted, is network shrinkage caused by delayed payments from multiple offtakers, which disrupts the entire supply chain. Additionally, a lack of understanding of the network code by some operators has led to unnecessary duplication of infrastructure—such as replicating gas hubs—which ultimately inflates the cost of gas for end users.

Growing Opportunities in CNG Sector

The Nigerian government has consistently urged the private sector to seize the opportunities presented by the Presidential Compressed Natural Gas Initiative (P-CNGi) by investing in infrastructure for converting petrol-powered vehicles to CNG (Compressed Natural Gas) systems. In addition, the government is calling for increased private sector involvement in establishing more CNG refueling outlets to accelerate adoption across the country.

Over the past year, these efforts have attracted more than $491 million in private sector investment, significantly boosting the automotive CNG sector. This investment has led to the creation of over 9,000 direct jobs and 75,000 indirect jobs. As a result, Nigeria’s vehicle conversion capacity has surged by 3,000 percent, with the number of conversion centers increasing from just seven to more than 200 nationwide.

To build on this momentum, the government is set to support an additional 10,000 vehicle conversions this year. It has also deployed 405 CNG-powered buses as part of its agreements with the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) during wage negotiations.

Despite these gains, challenges remain in ensuring widespread availability of CNG, particularly at the last-mile level. To address this, the government has launched the Refueling On-Lending Program, which will provide essential equipment at cost to key conversion centers and refueling partners.

By June 2025, leveraging the last-mile gas infrastructure strategy, the government aims to extend CNG access from the current five states to 17—creating more business opportunities for private investors.

“25 sites are billed to benefit and 15 states are slated for this, already the first site in Kwara State is live and Kogi, Ekiti, Rivers and Abuja will soon join them before May 1, 2025,” said Engr. Michael Oluwagbemi, Program Director of the P-CNGi.
“By June 12, we shall have Kaduna, Abia, Enugu joining the fray with Niger, Kano and Benue following shortly thereafter.”

“To further bolster this base infrastructure, we have cooped our private sector partners to deploy over 150 new refueling locations in the next 18 months. NNPC have already deployed 12 sites, with 8 to go this quarter, and the approval for additional 100 sought and secured for the next 18–24 months,” Oluwagbemi added.

He acknowledged the current strain on existing CNG stations:

“We are aware that as a result of our successful awareness campaign last year and groundbreaking initiatives like CIP that pay the private sector to convert vehicles to CNG, there has been a visible gap in CNG availability at the last mile. We note the longer queues in some locales but assure this is temporary.”

Reawakening Energy Powerhouse

From the new frontier exploration to deepwater developments, from regional gas export plans to local refining and LPG expansion, Nigeria’s oil and gas sector is positioning itself as a diversified, future-ready industry.

The ongoing investments by global firms like Shell, TotalEnergies, and CNOOC, the backing of institutions like Afreximbank, and the clear policy direction under the PIA all point to one thing: Nigeria is open for energy business.

For investors, the timing couldn’t be better. Whether in upstream exploration, midstream gas infrastructure, or downstream distribution and refining, opportunities abound. And with reserves still growing, Nigeria’s energy renaissance may just be getting started.

However, there are still problems around security of assets. From the Niger Delta region where oil and gas operators continue to experience losses due to oil theft and pipeline vandalism as result of sabotage; to insecurity in the north caused by Boko Haram and bandits insurgency, the government has a lot of work to do to achieve its targets.

Conclusion

Nigeria’s oil and gas sector is at a pivotal turning point—poised between legacy potential and future promise.

With rising reserves, renewed investor confidence, strategic infrastructure expansion, and a regulatory framework that prioritizes transparency and efficiency, the country is laying the groundwork for a more resilient and diversified energy economy.

From deepwater projects to inland frontier basins, and from domestic gas utilization to regional refining ambitions, every facet of the industry is being recalibrated for growth.

As Nigeria doubles down on its Decade of Gas vision and deepens partnerships across the value chain, it is clear that the country is not just reawakening an industry—it is redefining its role as a continental energy powerhouse.