CHIKA IZUORA looks at ongoing efforts by the federal government to ramp up oil production as the country’s crude oil export set to hit record level before end of the year.
At the moment Nigeria is extensively working to ramp up its oil production, with the government directing the reactivation of dormant oil assets and implementing fiscal incentives to attract investment.
The country aims to increase production to 2.1 million barrels per day and is currently producing around 1.745 million barrels per day.
Key strategies include attracting investment, maximising production from existing assets, and addressing security concerns in oil-producing areas.
The federal government has gazetted 21 new regulations for Nigeria’s oil and gas upstream sector in a sweeping move to unlock investments, streamline operations, and align industry practices with both national and global priorities.
The Commission chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, made this known while delivering a goodwill address at the 48th edition of the Society of Petroleum Engineers’ Nigeria Annual International Conference and Exhibition held in Lagos.
According to Komolafe, the new regulatory frameworks developed under the Petroleum Industry Act, 2021, are designed to offer clarity, attract capital, and promote accountability across exploration and production operations.
“Since the enactment of the Petroleum Industry Act, 2021, the commission has so far gazetted 21 key regulations, with others at various phases of development. These regulations provide the clarity required to support investment, streamline administration, and align upstream operations with national and global priorities,” he said
Recently the Nigerian Upstream Petroleum Regulatory Authority (NUPRC) talked about the Upstream Petroleum Measurement Regulations, which promote transparency and accountability through technological deployment for accurate production tracking, and the Gas Flaring, Venting and Methane Emissions Regulations aimed at reducing emissions and enforcing decarbonisation.
Other key regulations include Host Community Development Regulations, Domestic Gas Delivery Obligation Regulations, Upstream Petroleum Safety Regulations, and Decommissioning and Abandonment Regulations.
Commission chief executive Gbenga Komolafe stressed that the NUPRC is “not just focused on compliance,” but is repositioning as an enabling regulator capable of fostering innovation and sustainable value.
“These instruments demonstrate our commitment to creating a regulatory environment that fosters innovation, secures long-term value, and ensures the responsible stewardship of Nigeria’s upstream resources,” he said.
He stated that the commission is also implementing a seven-pillar Decarbonisation and Sustainability Blueprint, and recently achieved a peak production of 1.8 million barrels per day.
The upstream regulator called on all operators and stakeholders to engage with the regulations, align their operations, and support the commission’s drive for an efficient, transparent, and globally competitive petroleum sector.
The government has instructed the reactivation of dormant oil fields and introduced fiscal incentives like VAT waivers and tax credits to encourage investment in the oil and gas sector.
Nigeria’s 2025 budget included a production target of 2.06 million barrels per day, but current production is below that level. The government is working to reach 2 million barrels per day by the end of 2025.
However, Nigeria faces challenges such as oil theft, security concerns, and the need for technological advancements to optimise production. The government is addressing these issues by improving security measures, encouraging the adoption of digital technologies in the industry, and reviewing its refinery strategies.
The Nigerian National Petroleum Company Limited (NNPC) has been directed to increase oil production beyond current levels.
Nigeria is seeking investment from international companies, including those from the United Arab Emirates, to boost production add is also focused on increasing gas production and developing a robust domestic market for refined petroleum products.
Also, in a concerted effort Heineken Lokpobiri, minister of state for petroleum resources (oil), has asked engineering, procurement, and construction (EPC) companies that exited Nigeria’s oil and gas sector to return and reinvest in the country.
Lokpobiri spoke at the 2025 Nigeria annual international conference and exhibition organised by the Society of Petroleum Engineers (SPE) Nigerian Council.
He said President Bola Tinubu’s administration has worked hard to create an investment-friendly environment.
“I would like to use this opportunity to make a strong case to engineering, procurement, and construction companies that have previously operated in Nigeria and have since exited.
“With reforms given by the Petroleum Industry Act and other strategic incentives, Nigeria is positioned as a dependable and rewarding destination for EPC companies.
“We recognise the pivotal role EPC companies play in infrastructure development, project execution, and technology transfer within the energy sector.
“Therefore, we invite you to return, reinvest, and become part of Nigeria’s renewed journey toward energy security and economic prosperity,” Lokpobiri said.
On April 24, Lokpobiri had said Nigerians will benefit more from divestments of IOCs.
He added that “if people want to invest, that question is no longer whether Nigeria is an investment destination where you can come and invest and also divest.”
All these efforts are coming as Nigeria’s oil production surpassed 1.8 million barrels per day (bpd) last month, with current average output at 1.78 million bpd, according to NUPRC.
Nigeria, Africa’s largest oil producer, relies on crude oil for nearly two-thirds of government revenue and over 80 per cent of foreign currency earnings, making production gains critical for stabilising its economy.
But widespread oil theft, unrest and years of underinvestment curtailed output and strained public finances before Nigeria stepped up a crackdown in the oil-rich Niger Delta region.
Komolafe told delegates at an energy conference that the output increase, largely possible due to the step-up in security operations, is part of a push to boost oil production by 1 million bpd to 3 million bpd.
Oil output last reached 1.8 million bpd in November.Komolafe said the commission would continue working with stakeholders to sustain production gains and improve industry transparency.
India To Boost Nigeria’s Export Potential
Indian oil refiners are set to turn to Nigeria’s crude oil to satisfy their domestic market demand which is expected to position Nigeria for a higher export target between September and October this year.
In response to US pressure, Indian Oil Corp and Bharat Petroleum purchased 22 million barrels of non-Russian crude, including U.S. Mars, Brazilian, and Libyan grades.
These spot purchases represent about 6 per cent of India’s May crude processing and are supported by favorable arbitrage economics for Asian refiners.
Following pressure from the United States to stop buying from Russia, India’s largest state refiners, Indian Oil Corp and Bharat Petroleum, purchased at least 22 million barrels of non-Russian crude for delivery in September and October.
After Russia’s invasion of Ukraine, Indian state refiners became one of the few buyers of cheaper Russian crude, largely removing themselves from the spot market since 2022.
In response to pressure from US President Donald Trump, they halted Russian acquisitions in late July.
The sources claimed that IOC purchased two million barrels of U.S. Mars crude, two million barrels of Brazilian grades, and an additional one million barrels of Libyan oil on a delivered basis in its most recent tender.
They stated that BP sold the high-sulfur Mars crude shipment for $1.5 to $2 per barrel more than the September Dubai rates.
According to those who spoke to Reuters, the European trader Petraco sold one million barrels of Libyan Sarir and Mesla crude, while Totsa, the trading arm of the company, sold two million barrels of Brazilian Sepia and Sururu crude.
Prices for these cargoes were not immediately available.
Swiss gold refining sector hits US tariff mine and these agreements follow IOC’s purchase of 8 million barrels of crude from the Middle East, the United States, Canada, and Nigeria through tenders last week for September delivery.
Nine million barrels of oil were negotiated for September arrival by BPCL, India’s second-largest state refiner, according to a source familiar with the transactions who spoke to Reuters.
The purchases included two million barrels of Nigerian oil, three million barrels of Abu Dhabi Murban, one million barrels of Angola Girassol, and one million barrels of U.S. Mars, the source said.
Businesses often use confidentiality as an excuse to avoid discussing questionable transactions.
The combined September and October spot purchases by the two state refiners amount to about 6 per cent of India’s May crude processing, according to calculations by Reuters.
These purchases are supported by improving arbitrage economics for Asian refiners when transporting grades from the Atlantic Basin to Asia, Reuters reported.
Shell, ExxonMobil Supporting Oil Production Boost
Shell is highlighting its contributions to the growth of oil industry in Nigeria after it received an award for the Bonga North FID at the opening ceremony.
Shell is recognised for the $5 billion Bonga North FID which was announced late last year. Bonga North currently has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and will reach a peak production of 110,000 barrels of oil a day. The project is currently being executed.
“We are pleased that our businesses in Nigeria have delivered tangible benefits to the country through the taxes and royalties we pay, the local businesses we support with contract awards and the lives we have touched in social investments ranging from health to education,” Executive Vice President and Country Chair Nigeria, Marno de Jong said in comments on the award.
Similarly, ExxonMobil has affirmed its long-term commitment to Nigeria’s oil and gas sector with a planned investment of 1.5 billion dollars in deepwater exploration and development.
This significant financial commitment, which will be implemented between Q2, 2025 – 2027 focuses on revitalizing production in the Usan deepwater oil field. The company proposed FID in late Q3 2025 subject to final Field Development Plan approval as well as internal and partner funding approvals.
This is in addition to investment targeted at the accelerated development of the Owowo, Erha deepwater oil fields, amongst others.
This was announced during a courtesy visit by Mr. Shane Harris, ExxonMobil’s Managing Director in Nigeria, to the Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe.
According to Mr. Harris the planned capital deployment reflects ExxonMobil’s confidence in Nigeria’s upstream potential and its dedication to playing a pivotal role in the sector’s growth.
This move counters speculation about ExxonMobil’s potential withdrawal from Nigeria, instead underscoring a strategic expansion and strengthening of its operational footprint in the country. Mr. Harris also voiced ExxonMobil’s support for the NUPRC’s “Project 1 Million Barrels” initiative, which aims to increase Nigeria’s crude oil production to 2.4 million barrels per day in the medium term.
On his part, the CCE of NUPRC Engr. Gbenga Komolafe welcomed the announcement, reaffirming the NUPRC’s role as a business enabler and pledging regulatory support to facilitate ExxonMobil’s operations. He highlighted the importance of sustained collaboration between regulators and investors to meet Nigeria’s production and energy security goals.
Discussions during the visit also addressed compliance with the Domestic Crude Supply Obligation and the need for transparent pricing and accountability in the sector. “The Commission is committed to the implementation of Section 109 of the PIA which addresses the subject of willing buyer, willing seller and we urge producers to comply with the Domestic Crude Supply Obligation” he said.
In his role as the new Chairman of the Oil Producers Trade Section (OPTS), Mr. Harris expressed his intent to foster stronger collaboration between industry stakeholders and the NUPRC.
Rent Upsurge Pushing FCT Residents To Brink Of Displacement