PETAN Chairman Urges Indigenous Oil Producers to Invest in Training Young Engineers as Experienced Professionals Retire
PETAN said Nigeria’s oil and gas industry has significant growth potential, given its substantial hydrocarbon reserves, expanding domestic refining capacity and demand for petroleum products. However, inadequate equipment, limited access to finance and insufficient investment in exploration and production infrastructure remain major obstacles to achieving the country’s production ambitions.
Speaking on the state of the Nigerian oil and gas industry to journalists in Lagos, PETAN Chairman, Engr. Wole Ogunsanya said the country needed to bridge the gap between its available resources and the infrastructure required to produce, process and transport crude oil and gas efficiently.
According to Engr. Ogunsayan, Nigeria currently produces approximately 1.7 million barrels of oil daily, while its potential refining capacity could reach about three million barrels per day if existing and planned projects become fully operational.
He identified the Dangote Refinery, with an installed capacity of 650,000 barrels per day, alongside the Nigerian National Petroleum Company Limited’s refineries in Kaduna, Warri and Port Harcourt, as part of the country’s refining infrastructure.
He also cited plans by the BUA Group to develop a 350,000-barrel-per-day refinery and Dangote Refinery’s proposed capacity expansion, noting that the growing domestic refining industry would increase demand for crude oil.
The PETAN Chairman, however, cautioned that refining capacity alone would not guarantee energy security without sufficient crude oil production, functional infrastructure and investment in oilfield equipment.
He said Nigeria’s historical production peak of approximately 2.6 million barrels per day highlighted the need to expand production facilities, maintain existing assets and invest in new equipment.
The speaker also noted that Nigeria’s crude oil reserves, estimated at about 38 billion barrels, underscored the need to intensify exploration and replenish reserves after years of limited exploration activity.
He stressed further that the country must adopt a more strategic and consistent approach to oil and gas production rather than allow fluctuations in international crude prices to dictate investment decisions.
According to him, sustained drilling and investment during periods of low oil prices would position Nigeria to increase production more rapidly when market conditions improve.
He cited oil-producing countries in the Middle East as examples of jurisdictions that continue investing in their oilfields during market downturns, often negotiating lower service costs to improve project economics.
PETAN Highlights Financing as Major Constraint
Engr. Ogunsanya identified access to finance as one of the most significant challenges confronting indigenous oil and gas service companies, particularly those seeking to acquire expensive equipment needed to support increased production.
He said land drilling rigs could cost between $30 million and $40 million, while more complex offshore drilling equipment could require investments running into hundreds of millions of dollars.
To address the funding gap, Ogunsanay disclosed that PETAN had estimated the industry would require approximately $6 billion in equipment and hardware to support Nigeria’s ambition of producing three million barrels of oil daily.
He explained that much of the equipment needed to achieve the target was either unavailable locally, outdated or no longer suitable for current operational requirements.
The speaker said indigenous service companies had increasingly reinvested profits into their businesses, with some established operators building the financial capacity to acquire equipment. However, he stressed that broader financing mechanisms were necessary to accelerate industry-wide investment.
He also cited a financing arrangement involving Renaissance Africa Energy Company Limited and 13 banks, which he said was designed to provide up to $4 billion in financing for equipment and services.
Under the arrangement, companies with contracts from participating oil producers could use the expected contract proceeds to support bank financing for equipment purchases.
He explained that the model would enable service companies to acquire equipment, execute contracts and repay loans from revenue generated through their operations, reducing their dependence on conventional collateral-based lending.
Engr. Ogunsanya urged other oil-producing companies, including Seplat Energy and other operators, to consider adopting similar arrangements to expand access to equipment financing for indigenous service providers.
He said such initiatives would strengthen local capacity, reduce funding constraints and ensure that Nigerian companies could respond more effectively to growing demand for oilfield services.
Local Content Policy Drives Indigenous Capacity
The PETAN Chairman attributed the growth of indigenous oil and gas service companies partly to Nigeria’s local content framework, which has encouraged greater participation by Nigerian businesses across the petroleum value chain.
He recalled that PETAN had advocated policies designed to ensure that Nigerians retained a greater share of the economic benefits generated by the country’s oil and gas resources.
He particularly highlighted provisions of the Nigerian Oil and Gas Industry Content Development Act, 2010, which he said supported consideration of indigenous companies during the divestment of oil and gas assets.
According to him, the emergence and growth of indigenous operators such as Seplat Energy, Renaissance Africa Energy Company Limited, Heritage Energy Operational Services and Aradel Holdings demonstrate the long-term impact of policies promoting Nigerian participation in the sector.
He added that local companies had developed capabilities across several oilfield service segments, enabling them to compete with international providers and deliver services at competitive costs.
Engr. Ogunsanya disclosed that some services provided by Nigerian companies were now less expensive than comparable services in countries such as Ghana, Congo and Angola.
He cited the construction of a pipeline across the River Niger by an indigenous service company as an example of the technical expertise developed locally.
He maintained that sustained implementation of local content policies would strengthen the domestic supply chain, create employment opportunities and retain more value within the Nigerian economy.
NCDMB Fund Should Prioritise Oilfield Equipment
The PETAN Chairman called on the Nigerian Content Development and Monitoring Board (NCDMB) to channel more resources from the Nigerian Content Development Fund towards acquiring equipment that would directly support oil and gas production.
He noted that the fund receives contributions equivalent to one per cent of relevant contracts in the Nigerian oil and gas industry and has supported projects aimed at building domestic industrial capacity.
While acknowledging the board’s contributions to industrial and gas infrastructure projects, he urged it to give greater priority to equipment acquisition that could help close production gaps and improve operational efficiency.
He said targeted investment through the fund could complement commercial bank financing and other industry-led initiatives, providing indigenous companies with additional resources to expand their operations.
The PETAN Chairman was of the view that collaboration among indigenous service providers, oil producers, financial institutions and government agencies would be essential to mobilising the capital required to meet Nigeria’s production targets.
He added that sustained investment in equipment, technology, skills development and local expertise would help transform the country’s oil and gas potential into higher production, stronger energy security and broader economic benefits.
He stressed that Nigeria’s growing refining capacity and domestic demand for petroleum products made it increasingly important to maintain reliable crude oil production and develop the infrastructure needed to support the entire petroleum value chain.
Domestic Refiners Took Over 127 Million Barrels of Nigerian Crude in Nine Months – NUPRC
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has disclosed that domestic refineries received more than 127 million barrels of Nigerian crude oil and condensate between January and September 2026, reflecting improvements in the implementation of the Domestic Crude Supply Obligation (DCSO).
The Commission Chief Executive, Mrs. Oritsemeyiwa Eyesan, disclosed this on Monday in her speech at the OTL Africa Downstream Energy Week 2026 in Lagos on Monday, October 26, 2026.
Speaking on the theme, ‘Secure Energy, Shared Prosperity’, the NUPRC boss, who was represented by Assistant Director, Operations, Mr. Prosper Omonedo, said the Commission’s intervention had improved crude oil deliveries after commercial disagreements between producers and refiners affected supplies in the first quarter.
“We engaged producers and refiners, and in the second and third quarters, 53.7 and 45.1 million barrels of crude oil and condensate were supplied to domestic refineries, an overall performance of 97.4 and 76.2 per cent, respectively. From Q1–Q3 of 2026, more than 127 million barrels of Nigerian crude went to Nigerian refineries,” she said.
Under Section 109 of the Petroleum Industry Act 2021, the NUPRC allocates crude oil to domestic refineries before export.
The CCE said the NUPRC is also consulting producers, refiners and other stakeholders on a domestic crude swap framework.
“Under it, a refiner could receive crude from the nearest suitable production or export point instead of moving an allocated grade over long distances, which could take an estimated three to four dollars off the cost of every barrel,” he added.
On production, Eyesan said Nigeria recorded an average of 1.717 million barrels per day of crude oil and condensate in September, a 2.34 per cent increase over August. Crude oil production alone averaged 1.53 million barrels per day, marking the fifth consecutive month the industry met or exceeded its quota.
She attributed the improvement to better asset integrity, enhanced security of evacuation infrastructure, stronger collaboration with operators and sustained regulatory efforts to restore shut-in production.
On the 2026 Licensing Round, she said the 40 blocks on offer would be subjected to a transparent evaluation process, with published criteria and mandatory disclosure of beneficial ownership.
The NUPRC boss added that the Commission was enforcing the drill-or-drop principle to discourage speculative holding of licences, noting that 22 recent awardees were expected to contribute at least 250,000 barrels per day within five years.
She reaffirmed the Commission’s commitment to meeting the Domestic Gas Delivery Obligation and working with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to align refinery demand with crude supply planning, ensuring that upstream gains translate into tangible benefits for households, industries and power generation.
