The enactment of the Petroleum Industry Act (PIA) is seen as a boost to Nigeria’s oil and gas sector growth but five years after it is yet to significantly help the country meet its OPEC quota, writes CHIKA IZUORA
Nigeria has struggled to meet its Organisation of Petroleum Exporting Countries crude production quota, falling short by hundreds of thousands of barrels daily due to a combination of oil theft, underinvestment, and operational inefficiencies.
Just in May 2025, the Nigerian Upstream Petroleum Regulatory Authority (NUPRC) disclosed that Oil production in Nigeria decreased to 1,452,941 barrels of oil per day, representing a 2.20 per cent drop compared to the 1,485,700 bpd in April.
The development underscores the broader challenges facing Nigeria’s oil and gas sector, where underinvestment, regulatory bottlenecks, and dormant licenses have continued to hamper growth despite improved midstream infrastructure.
It would be interesting to state here that on August 16, 2021, former President Muhammadu Buhari, signed the Petroleum Industry Bill (PIB) into law.
The Bill which thus became the Petroleum Industry Act (PIA) 2021, is viewed as Nigeria’s second-largest achievement in the energy sector.
Industry experts and analysts excitedly pointed that the Act had the potential to address longstanding challenges and drive significant reforms in the oil and gas sector.
Unfortunately, four years into its phased implementation it is yet to address key fundamental issues facing the industry especially with regard to increasing production capacity through massive investment opportunities.
Though, the PIA has driven some notable successes in Nigeria’s oil and gas sector through the effective functioning of regulatory bodies.
For instance, the Act has transformed the regulatory framework, catalysing a series of pivotal reforms and operational achievements. These obviously have enhanced transparency, improved efficiency and attracted substantial investment, collectively propelling the sector toward sustainable growth and long-term stability.
The Act restructured the regulatory framework of the petroleum sector by dividing oversight responsibilities between two distinct agencies: the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Each agency has clearly defined roles aligned with their respective segments of the industry.
The Act further reformed acreage management by introducing effective policies on voluntary conversion and relinquishment and established critical funding mechanisms, including the Frontier Exploration Fund and the Host Community Trust Fund, aimed at promoting exploration, infrastructure development, environmental remediation and the socio-economic advancement of host communities.
The transformation of the Nigerian National Petroleum Corporation (NNPC) into a limited liability company, Nigerian National Petroleum Company Limited, again marked a pivotal shift, while streamlined licensing processes have also enhanced industry transparency and efficiency.
The PIA also introduced mechanisms for the development of petroleum host communities, fostered a business environment conducive to investment and deepened local content participation. By repealing outdated laws and consolidating regulatory oversight, the Act has provided the basis for the modernisation of Nigeria’s oil and gas industry, attracting investment and ensuring sustainable economic benefits for the country.
Nigerian cultural tourism packages.
Invoking The PIA To Achieve Volume Crude Production
However, after announcing a slight leap in oil production output which is currently put at about 1.745 million barrels of crude oil per day (bpd) and aiming to hit two million bpd by the end of 2025, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said Government has issued a bold ultimatum to oil and gas operators in Nigeria: deliver measurable results or relinquish control of national assets.
Lokpobiri, informed about this bold decision at the 2025 edition of the Nigerian Oil and Gas (NOG) Week in Abuja.
Speaking under the event’s theme: “Accelerating Energy Progress Through Investment, Global Partnerships and Innovation,” Lokpobiri called for urgent and coordinated action to reverse the downward trend in national oil production, stressing that the era of excuses and underperformance is over.
“It is no longer acceptable for critical national resources to remain in the hands of companies that lack the technical or financial capacity to optimise them.
“The era of dormant fields and underperforming assets must give way to action,” Lokpobiri warned.
The minister revealed that President Bola Tinubu has directed the board of the Nigerian National Petroleum Company Limited (NNPC Ltd) to review all existing operatorship arrangements to ensure they align with national development goals.
He said partnerships and agreements, including Joint Ventures and Financial/Technical Services Agreements (FTSAs), must not become tools to hold the sector hostage.
“If you cannot act in the nation’s best interest, then it’s time to step aside or step up through meaningful partnerships,” he declared, urging companies to re-enter shut-in wells and turn dormant licenses into productive assets.
Lokpobiri expressed deep concern that despite the passage of the Petroleum Industry Act (PIA) and the implementation of numerous investment incentives and executive orders, production has not improved.
“Last year, we stood here and spoke passionately about increasing production. Yet today, we find ourselves asking: what has truly changed?” he asked
He said the federal government has declared an end to what it described as the “era of speculative licensing,” where companies acquire oil blocks but fail to develop them, hence putting an end to dormant oil fields.
Mr Lokpobiri said that the production target in the 2025 budget was 2.06 million bpd, adding that the country must ramp up production to hit two million.
“We can succeed when we work together to be strong enough to deliver.
“I urge the Nigerian National Petroleum Company Limited (NNPC Ltd.) to change its target ambition to producing above two million barrels by 2025,” he said.
He said that in 2023, when he was appointed as the minister, there was no investment for 10 years due to legal framework and other challenges.
He said that from 2023, the narratives changed and investments were recorded as a result of deliberate policies and reforms that worked, and an absolute increase in investors’ confidence in Nigeria.
Also speaking, the minister of state petroleum resources (Gas), Ekperikpe Ekpo, said Nigeria had proven gas reserves of over 200 trillion cubic feet.
Mr Ekpo said value would only be created in the gas sector when resources were developed and utilised.
He said through the “Decade of Gas” initiative, the country was focused on translating its vast gas wealth into tangible socio-economic benefits.
This, he said, included driving industrialisation, expanding power generation, increasing domestic Liquefied Petroleum Gas (LPG) usage, deepening gas-to-transport adoption, and growing gas export capacity.
This came as the Nigerian National Petroleum Company Limited revealed the breakthroughs in tackling pipeline vandalism and ensuring full availability of key crude oil pipelines. It, however, lamented that despite this, Nigeria’s crude production still lags behind government targets.
The company announced that five of its major crude evacuation pipelines achieved 100 per cent availability between May and June 2025, a milestone in the ongoing efforts to stabilise Nigeria’s oil infrastructure.
The pipelines include the Trans-Niger Pipeline, Oando Brass Pipeline, Trans Forcados Pipeline, Trans Escravos Pipeline, and the Trans Ramos Pipeline, all of which traverse critical economic corridors in the Niger Delta and are essential for moving crude oil from wellheads to terminals for export.
However, despite these gains, the NNPCL Group Chief Executive Officer (GCEO) Bayo Ojulari, lamented that oil producers have failed to ramp up output to meet the national production target of 2.02 million barrels per day as projected in the 2025 budget.
The GCEO announced a full recovery in pipeline infrastructure security and capacity across the country.
According to him, as of June 29, 2025, the country had achieved 100 per cent pipeline availability, a feat he described as “previously unthinkable” given the long history of sabotage and vandalism in the sector. However, he noted that while pipeline access is no longer a constraint, the country’s oil production levels remain below potential.
He said, “For years, whenever we gathered at this event, we lamented the insecurity around our pipeline network and its impact on crude oil production. But I am pleased to share with you today that, through the collective efforts of the federal government, regulatory bodies, the military, and the industry, we have 100 per cent pipeline availability today.
“As of last month, we averaged 1.35 million barrels per day in crude production, and with condensates, it came to about 1.6mbpd. So now that the pipelines are available, the question becomes: where is the production?”
Ojulari attributed the suboptimal output to years of underinvestment, warning that Nigeria must urgently attract new capital into the oil and gas sector to take full advantage of the restored infrastructure and favourable market dynamics.
“We have solved the infrastructure bottleneck, now we need investments to raise production. The stars are beginning to align, and this is the time to act,” he said.
The GCEO called on both local and international investors to take advantage of Nigeria’s improved pipeline security, regulatory reforms, and expanding gas infrastructure to commit fresh capital to upstream and midstream projects.
Ojulari also announced a breakthrough in its ongoing $2.8bn Ajaokuta-Kaduna-Kano gas pipeline project, confirming that contractors have successfully crossed the River Niger, a critical milestone that had previously posed significant technical and commercial challenges.
Richly endowed with resources, Nigeria not so long ago was among the most important sources of oil and gas production for big oil.
National liquids production, though, has fallen by 40 per cent from its 2005 peak to 1.6 million b/d currently. And the downward trend accelerated as IOCs reallocated capital towards lower-cost, lower-risk basins in the wake of the oil price crash after 2014.
Signs of the positive change in the industry emerging under the leadership of President Bola Tinubu were evident at Wood Mackenzie’s 7th Annual Nigeria Upstream Briefing in Lagos recently.
Wood’s Upstream experts, Mansur Mohammed and David Parkinson, shared at the event their perspective of what’s afoot.
Tinubu has set ambitious new oil and gas production targets – 3 million b/d of liquids and 12 bcfd of gas by 2030.
A culture change has begun with sweeping changes to the board at the NNPCL, more supportive fiscal policies and a suite of new JV operators suggesting the ingredients to drive growth are finally falling into place.
Investment has suffered a steep fall from a peak of US$29 billion (real) in 2014 to just over US$5 billion in 2024.
But to achieve the president’s targets, spend needs to more than double to US$12 billion a year immediately and continue growing for the rest of the decade.
There are already signs that things are moving in the right direction. Renaissance Africa Energy Company alone plans to invest US$15 billion over five years, and industry analysts expect an uptick in activity by Oando and Seplat from their recently acquired assets.
Shell has equally committed US$5.5 billion at Bonga North and ExxonMobil could commit up to US$10 billion on the Usan, Owowo and Erha fields.
Indigenous firms are producing more volumes than expected from their marginal fields. Even so, this group of companies now need to embrace a culture of growth.
Experts says the NNPCL can’t do it alone and the transformation will require collaboration to unlock the growth potential. All operators must bring forward their top opportunities and work programmes and a common understanding and line of sight to where the incremental volumes will come from is a priority. Only then can partnerships and investment unlock synergies and tackle bottlenecks that have eluded the industry in the past.
With 2030 targets looming, delays in signoffs and overbearing regulatory burdens can no longer be tolerated. Incentives provided to the industry are a good start, but the fiscal system remains complex and Nigeria is competing in a buyers’ market, experts added in their opinion.
They opined that for greenfield opportunities to be part of Nigeria’s solution by 2030, two shifts are required – rapid signoff of development plans and pragmatism when challenging regulatory requirements become a blocker. New production sources must be given priority.
NNPCL Taking Bold Action
Not daunted certain drawback, the NNPCL has highlighted 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 recognize 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.
Also, 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.
Between Depleting Workforce And Declining Productivity