Nigeria’s oil, gas reforms lift production, spur fresh investments, FG says

Nigeria’s oil and gas industry is experiencing a marked rebound in production and investor interest as Federal Government reforms reshape the sector’s operating environment, according to the Ministry of Petroleum Resources. At the opening of the 25th Nigeria Oil and Gas (NOG) Energy Week 2026 in Abuja, senior officials highlighted rising output, accelerated project activity and stronger capital inflows driven by improved security, regulatory clarity and targeted incentives.

Upstream rebound and production gains

Authorities reported that crude oil output has climbed from roughly one million barrels per day in 2023 to above 1.8 million barrels per day, underscoring a steady recovery in supply. The number of active drilling rigs has also expanded significantly—from about 14 to more than 60—signaling renewed exploration and field development across mature and frontier assets. The government said it is working closely with operators to sustain momentum through enhanced security in producing corridors, quicker project approvals and closer collaboration with industry stakeholders.

Officials added that stronger global demand for Nigerian grades is creating headroom to lift capacity further, provided gains in operational reliability and community relations are maintained.

Regulatory clarity and deeper indigenous participation

Implementation of the Petroleum Industry Act (PIA) has been central to the turnaround, providing clearer rules for licensing, fiscal terms and host community engagement. The recent completion of asset divestments by several international oil companies—transferring onshore and shallow-water interests to local firms—has accelerated indigenous participation in the upstream. Indigenous operators now contribute over 60 percent of daily crude production, while international companies channel more capital to deep offshore developments where they retain comparative advantage.

Competitive fiscal terms

To sharpen Nigeria’s competitiveness, fiscal and petroleum authorities are benchmarking the country’s regime against global peers with the goal of simplifying taxes, levies and statutory charges. The objective, officials said, is to reduce friction costs, shorten project cycle times and crowd in new investment across marginal, brownfield and deepwater opportunities.

Gas sector momentum under the Decade of Gas

With more than 215 trillion cubic feet of proven gas reserves, Nigeria is prioritizing gas to drive industrialization, enhance energy security and diversify export earnings. Reforms anchored in the PIA and recent Executive Orders have introduced targeted incentives, streamlined contracting processes and reinforced regulatory certainty, resulting in increased activity along the gas value chain—from upstream supply to midstream processing and downstream utilization.

Flagship projects and infrastructure build-out

• Ajaokuta–Kaduna–Kano (AKK) pipeline and OB3 pipeline: key backbones to move gas to northern and central demand centers.
• NLNG Train 7: set to lift liquefied natural gas capacity from about 22 million tonnes per annum to roughly 30 mtpa.

On the domestic front, the Presidential Compressed Natural Gas (CNG) Initiative and the National Clean Cooking Programme are expanding gas use in transport and households, lowering fuel costs, creating jobs and advancing Nigeria’s energy transition goals.

Regional integration and global positioning

Nigeria is deepening regional gas connectivity through projects such as the Trans-Saharan Gas Pipeline, the Africa-Atlantic Gas Pipeline concept, the Nigeria–Equatorial Guinea Gas Pipeline and the expansion of the West African Gas Pipeline network. Officials noted that Nigeria’s assumption of the presidency of the 2026 Gas Exporting Countries Forum and its admission as an Association Country of the International Energy Agency reflect growing international confidence in the country’s energy reforms and market prospects.

Investment pipeline and long-term targets

The administration’s energy team outlined an ambition to raise crude oil output to about three million barrels per day and natural gas production to 10 billion standard cubic feet per day by the end of the decade. Over the last three years, Nigeria has secured more than $10 billion in final investment decisions across oil and gas projects, while combined crude and condensate production has increased by more than 400,000 barrels per day.

Officials also pointed to a resurgence in onshore production—now at its highest level in nearly twenty years—supported by improved security and operational uptime. They added that external reserves have risen above $50 billion, a signal, in their view, of stabilizing macroeconomic conditions and renewed investor confidence.

Outlook

With the PIA framework maturing, fiscal terms under review and major gas infrastructure advancing, the government expects sustained upstream activity and broader midstream and downstream investments. Priority areas include reducing vandalism and theft, expediting project approvals, resolving legacy joint-venture arrears, unlocking gas-to-power and industrial off-take, and scaling domestic gas adoption.

Industry stakeholders at NOG 2026 broadly welcomed the reform tempo, while underscoring the need to maintain policy consistency, strengthen contract sanctity and ensure transparent, predictable regulation to keep capital flowing and production rising.