In this report CHIKA IZUORA, reviews initiatives being implemented by the Nigerian National Petroleum Company Limited to drive energy growth and advance the country’s crude production.
The Nigerian National Petroleum Company Limited (NNPCL) is thinking outside the box to beat projections by research firms that it could witness downward growth citing unproductive assets.
A recent analysis by global energy research firm, Wood Mackenzie, specifically warned the Company could see its oil and gas production slashed by as much as 50 per cent by the late 2030s.
In its recent podcast titled “A New Era for NNPC and Nigeria’s Upstream Oil & Gas Sector,” the consultancy firm said NNPCL’s portfolio is burdened by a large number of sub-commercial assets, which pose long-term viability concerns.
Using its new upstream benchmarking tool, Woodmac’s team of experts, including Ian Thom, Research Director for Upstream; Neivan Boroujerdi, Director of Corporate Research; and Mansur Mohammed, Head of West Africa Upstream Content, highlighted that while short-term production may improve slightly, output is expected to peak by 2026 before declining steeply.
“What is unique to NNPC is that, unlike a lot of the other National Oil Companies within our corporate universe and around the world, most of its production and its assets are non-operated.
“So it’s got big ambitions to grow its business, to grow the Nigerian upstream sector, but a lot of that will be reliant on a lot of other IOCs around the world, indigenous producers, where assets will have to compete for capital within a wider portfolio.
“And if we look at production in a little bit more detail, we can see that it is growing in the short term. That’s set to peak in 2026. But clearly, there are challenges in the longer term. By the late 2030s, production could be half of what it is today,” the team stated, citing a lack of project pipelines and an over-reliance on non-operated assets.
Unlike other national oil companies that have more control over operations, Woodmac noted that NNPCL’s production is largely dependent on assets operated by international oil companies and indigenous producers. This limits its ability to directly influence output growth and heightens exposure to capital allocation decisions made outside Nigeria.
“So there is a lack of longevity in the portfolio. It needs more projects in the pipeline. And if we look at the reserve base, what you see is that NNPC has a huge amount of resources within its portfolio, but most of those resources are still sub-commercial. The NNPCL has big ambitions, but its future hinges on how much capital other players are willing to invest in Nigeria,” the analysts said. “Right now, there’s a lack of longevity in its portfolio. It needs new commercial projects urgently.”
Nonetheless, President Tinubu has tasked the NNPCL management led by the group executive chief officer, Bayo Ojulari, with achieving an ambitious set of goals by 2030, including raising oil production to 3 million barrels per day, gas output to 10 billion cubic feet per day, attracting $60 billion in investment, and refining 500,000 bpd domestically.
But Woodmac suggests these targets may be undercut by structural inefficiencies and fiscal hurdles.
On gas development, Woodmac flagged long-standing infrastructure constraints as a major bottleneck. It noted that Nigeria holds significant untapped gas reserves, especially in the Niger Delta, but less than 20 per cent of remaining volumes are considered commercially viable due to a lack of processing and transportation infrastructure.
“For instance, the OB3 pipeline, which should connect gas fields in the Eastern Delta to Lagos and other markets, has faced years of delay. Its completion could be a game changer,” the report said.
Operational costs are also a concern. Woodmac’s benchmarking tool shows that NNPCL has a higher cost base compared to its peers, driven by factors such as barrel losses, insecurity, and policy challenges like local content regulations.
“The company must urgently address its cost competitiveness, especially if it wants to attract investors or consider an Initial Public Offering in the future,” the team warned.
In addition, the retreat of major oil companies from Nigeria’s onshore and shallow water assets has reshaped the upstream landscape. Deepwater fields now account for the bulk of investments, and projects like Bonga North, which secured Final Investment Decision in 2023, are expected to play a pivotal role in any future production rebound.
While NNPCL maintains a 60 per cent stake in many joint ventures, the analysts cautioned that future financing will be more complex. Indigenous partners like Oando, Renaissance, and Seplat are unlikely to continue the carry arrangements previously offered by oil majors.
“The ability to finance onshore operations independently will be critical. Without that, growth will be severely constrained,” Woodmac said.
Despite the challenges, the firm acknowledged Nigeria’s untapped potential, especially in deepwater reserves. However, unlocking that potential will require aggressive project development, better cost control, and regulatory clarity.
“Nigeria’s upstream future hinges on timely FIDs, increased capital inflow, and removing infrastructure bottlenecks. Otherwise, production will continue to slide,” the experts concluded.
Undaunted By Such Projections
However, the NNPCL has listed a number of audacious and bold measures to sustain growth projections as mandated by the government.
Bashir Bayo Ojulari, the Group Chief Executive Officer of the Company, in enterprising and courageous initiative has set an ambitious target, stating that the company under his stewardship aims to attract sectoral investments worth $30 billion by 2027 and $60 billion by 2030; raise crude oil production to over 2 million barrels per day, sustained through 2027 and attain 3 million by 2030.
Ojulari, also unveiled plans to expand refining output to 200kbpd by 2027, and 500kbpd by 2030; grow gas production to 10bcf per day by 2027, and 12bcf by 2030 and deepen energy access and affordability for all Nigerians.
To achieve these targets, the company will be focusing on reconfiguring its business structure for agility and value creation; conducting independent value assessments to inform data-driven decisions; enforcing a robust performance management framework; building transparent, value-aligned partnerships with all stakeholders and most critically, taking control of its narrative.
While explaining the criticality of pursuing the Company’s bold ambitions, the Group CEO said the targets are not just metrics, but indicators of hope, jobs, industrial growth, and energy security for millions of Nigerians.
Describing NNPC Ltd as a renewed, forward-facing, and future-ready organisation that is leading Nigeria’s energy transformation, Ojulari said “it’s time we tell our story—one of innovation, reform, and national pride.
“We stand at the gateway of a new era—one that demands courage, professionalism, and a relentless drive for excellence. The task before us is great, yet the opportunity to redefine Nigeria’s energy future is even greater. Now is the time to turn our transformation promise into performance,” Ojulari said.
He charged staff to be proud of NNPC Ltd’s recent transformation, stressing that the next journey to becoming a fully-fledged limited liability company will require the collective drive towards making NNPC more transparent, profitable and accountable.
“We will provide the best combination where the experienced and the young will both thrive towards achieving our set targets.
“We recognise that our greatest asset is our people. Our success will be powered by empowered employees. As such, we are fully committed to creating a workplace where everyone is valued, motivated, and inspired to thrive. Together, we will build a high-performing, globally competitive NNPC Ltd that is proudly Nigerian and proudly world-class,” Ojulari concluded.
NNPCL Board Broader Support
Meanwhile, the newly inaugurated board of the Nigerian National Petroleum Company Limited, NNPC Ltd, has reiterated its commitment to transparency, accountability, and performance in steering the country’s oil and gas sector towards prosperity.
The group chief executive officer, GCEO, Mr. Bayo Ojulari, and the chairman of the board, Alhaji Ahmadu Kida, re-emphasised their resolve in Abuja after their inauguration by President Bola Tinubu.
The GCEO lauded the diverse composition of the board, which includes professionals from the private sector and public service, including representatives from the Ministries of Petroleum and Finance.
He said that would ensure alignment with national goals while drawing on institutional memory and practical business experience.
“We have the opportunity to steward this God-given wealth to prosperity for Nigerians, just like Saudi Arabia and Qatar have done,” he stated.
Asked whether the under-performing refineries would be privatised and if plans for a long-anticipated Initial Public Offering (IPO) had begun, the chairman said no specific date could be given for the IPO but confirmed that full preparations were underway to meet global standards of governance and corporate structure necessary for a successful market entry.
“We are sailing full speed ahead to make sure that NNPC delivers maximum value when we go public,” he said.
Addressing the refinery question, the chairman confirmed that no option, including privatisation, was off the table.
He acknowledged years of public frustration with the state-owned refineries and said a detailed, honest assessment of their current condition was in progress.
“We will come back with concrete steps to ensure the refineries either add the greatest value to Nigerians or function optimally,” he pledged.
On the broader transformation agenda, the GCEO explained that transitioning from a public corporation to a limited liability company under the Petroleum Industry Act (PIA) was complex and would take at least two more years to fully implement.
“We’re not regulators anymore; we’re a business. Nigerians must begin to see us as a company governed under the Companies and Allied Matters Act, CAMA,” he said.
He also said inspections of two of the three major refineries had already been completed, adding that full Board reviews are scheduled in the coming weeks.
In response to concerns raised by a recent report suggesting NNPC could lose 80% of its oil and gas revenue due to over-reliance on unproductive assets, the management strongly disagreed, stressing that Nigeria’s daily oil production had already risen from 1.5 to 1.7 million barrels since the board assumed office.
“We are doing everything to increase production and attract fresh investment. Our credibility is restoring investor confidence, and we are seeing proposals from businesses that stayed away for years”, he said.
The Board re-affirmed its resolve to walk its talk and be judged by concrete outcomes, not promises.
Government Tasks Oil Companies
To further motivate investors the government is urging the oil companies operating in the country to collaborate to increase oil output in the producer that hasn’t been able to pump to its OPEC quota for years.
Nigeria’s crude oil production averaged 1.4 million barrels per day (bpd) in the first quarter of the year, well below the 1.8 million bpd quota in OPEC, Ekperikpe Ekpo, Minister of State for Gas, said.
“Production growth hinges on optimising our existing resources and exploring new frontiers,” Gbenga Komolafe, chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), said at the event.
Oil theft and pipeline vandalism have long plagued Nigeria’s upstream oil and gas industry, driving majors out of the country and often resulting in force majeure at the key crude oil export terminals.
Nigeria, failed to pump to its OPEC+ quota due to oil theft and vandalism and struggles to launch new projects.
The government has been clamping down on oil theft and been supportive of an increase in oil and gas output in recent months.
The NUPRC said recently that U.S. supermajor ExxonMobil plans to invest as much as $1.5 billion in deepwater oil and gas exploration and development offshore Nigeria.
Launching New Crude Grade
Also, in a major boost for Nigeria’s crude oil production, revenue generation and economic growth efforts, the NNPC Ltd has officially unveiled its latest crude oil grade, the Utapate crude oil blend, before the international crude oil market.
It would be recalled that in July, 2024, NNPC Ltd and its partner, the Sterling Oil Exploration & Energy Production Company (SEEPCO) Ltd introduced the Utapate crude oil blend, following the lifting of first cargo of 950,000 barrels which headed for Spain.
During a ceremony held at the Argus European Crude Conference in London, United Kingdom, the Managing Director, NNPC E & P Limited (NEPL), Mr. Nicholas Foucart described the introduction of the Utapate crude oil blend into the market as a significant milestone for Nigeria’s crude oil export to the global energy market.
“Since we started producing the Utapate Field in May 2024, we have rapidly ramped up production to 40,000 barrels per day (bpd) with minimum downtime. So far, we have exported five cargoes, largely to Spain and the East Coast of the United States; while two more additional cargoes have been secured for November and December 2024, representing a significant boost to Nigeria’s crude oil export to the global market,” Foucart told a packed audience of European crude oil marketers.
He added that since its introduction into the global market, the Utapate crude oil blend has enjoyed a positive response from the international crude oil market, due to its highly attractive qualities.
Foucart said the Oil Mining Lease (OML) 13, fully operated by NEPL and Natural Oilfield Services Ltd (NOSL), a subsidiary of SEEPCO Ltd, boasts a huge reserves of 330million barrels of crude oil reserves, 45 million barrels of condensate and 3.5 tcf of gas.
“We have a number of ongoing projects to increase our production from the current 40,000bopd to 50,000bopd by January 2025 and 60,000bopd to 65,000bopd by June 2025. Essentially, we are targeting opportunities to increase production to 80,000bopd by the end of 2025,” Foucart added.
He said the Utapate crude oil terminal is sustainable, affordable and fully compliant with the rigorous environmental regulations and sustainability principles especially those aimed at reducing carbon emissions and other ecological effects.
Also speaking, the Managing Director of NNPC Trading Ltd (NTL), Mr. Lawal Sade said the pricing structure of the Utapate crude oil blend is similar to that of Amenam crude as it is a light sweet crude which is highly sought after by refiners across the world due to its low sulphur content, efficient yield of high-value products, API gravity and other similarities.
He said in bringing the new crude oil blend to the global market, NNPC Ltd wanted to optimise value for both its producers and counterparties across the globe.
He added to ensure predictability and sustainability of supply, the NNPC Trading intends to run a term contract on the Utapate crude oil blend cargoes, principally targeting off-takers from the European and the US East Coast refineries.
Produced from the Utapate field in OML 13 in Akwa Ibom State in Nigeria, the Utapate crude oil blend is similar to the Nembe crude oil grade. It has a low sulphur content of 0.0655% and low carbon footprint due to flare gas elimination, fitting perfectly into the required specification of major buyers in Europe.
The NNPC E&P Ltd and NOSL partnership is also committed to operating in a manner that is safe, environmentally responsible, and beneficial to the local communities.
The Utapate field development plan, executed between 2013-2019 and approved in October, included converting wells and facilities from swamp/marine to land-based operations.
The plan involved a multi-rig drilling campaign for 40 wells and the development of significant infrastructure such as production facilities, storage tank, a subsea pipeline and an offshore loading platform to facilitate crude oil evacuation and loading.
The entry of the Utapate crude oil blend into the market is coming barely a year after the NNPC Ltd announced the launch of Nembe crude oil, produced by the NNPC/Aiteo operated Oil Mining Lease (OML) 29 Joint Venture (JV).
This remarkable achievement signals the commitment of the NNPC Ltd to increasing Nigeria’s crude oil production and growing its reserves through the development of new assets.
