Nigeria's share of Africa's upstream final investment decisions (FIDs) has risen from four percent to 40 percent within two years, amid sweeping reforms introduced in the country's oil and gas sector. This is contained in a new review by the Office of the Special Adviser to the President on Energy.
The report, titled Nigeria's Energy Sector Reforms 2023–2026: A Three-Year Review, and spearheaded by Special Adviser on Energy, Olu Verheijen, said that the country now has a $50 billion upstream project pipeline extending beyond 2026, signalling what it described as sustained capital commitment not seen in Nigeria's upstream industry in at least a decade.
The review noted that between 2014 and 2023, Nigeria ranked among Africa's weakest performers in upstream FIDs despite possessing 37.5 billion barrels of proven oil reserves, the second largest in Africa. During the period, Algeria accounted for 44 percent of Africa's upstream FIDs, Angola held 26 percent, while Nigeria lagged behind countries such as Mozambique, Ghana, Senegal and Namibia.
According to the report, crude oil production fell below one million barrels per day in the third quarter of 2022 as underinvestment, pipeline vandalism and regulatory uncertainties worsened operational challenges in the sector. However, it stated that reforms introduced under President Bola Tinubu's administration reversed the trend through fiscal adjustments, regulatory reforms and accelerated project approvals.
According to the review, the administration clarified the operational boundaries between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), a development it said resolved regulatory ambiguities that had slowed project sanctioning. The report added that Presidential Directive 40 introduced targeted tax incentives, while the 2024 Notice of Tax Incentives for Deep Offshore Production was designed to attract international oil companies back into deepwater investments. It further stated that the VAT Modification Order 2024 and the Upstream Cost Efficiency Order 2025 addressed cost-related concerns affecting the viability of marginal projects. In addition, contracting timelines within the Nigerian National Petroleum Company Limited (NNPCL) were reportedly reduced from 36 months to six months.
The review also highlighted four major asset divestments involving international oil companies, with Renaissance acquiring Shell's onshore assets, Seplat Energy completing the acquisition of ExxonMobil's Nigerian upstream interests, Oando taking over Agip's assets and Chappal acquiring Equinor's local portfolio. The transactions, valued at about $4 billion, contributed to increased participation by indigenous operators in onshore and shallow-water operations.
According to the report, oil production rose by about 400,000 barrels per day between 2023 and 2025 to reach 1.6 million barrels per day, which it described as the highest onshore production level recorded in 20 years. The reforms also triggered new investment decisions by major operators. Shell Nigeria Exploration and Production Company (SNEPCo) sanctioned the $5 billion Bonga North deepwater development project in December 2024 and committed an additional $2 billion to the HI Non-Associated Gas project, while TotalEnergies and NNPCL took a joint final investment decision on the $550 million Ubeta gas field development in June 2024.
The report stated that the three projects accounted for more than $10 billion in signed investments after nearly a decade of limited upstream project sanctioning activity. It added that the project pipeline beyond 2026 covers 11 projects, including Bonga South West, Owowo, Usan and Erha, with Nigeria approving 28 field development plans worth $18.2 billion in 2025 alone. The plans, according to the review, target about 1.4 billion barrels of reserves.
Executive Chairman of the African Energy Chamber, NJ Ayuk, said the reforms had improved investor confidence in Nigeria's upstream sector. “When a government rebuilds fiscal competitiveness and regulatory predictability at the same time, capital responds. Nigeria has done both, and the FID numbers are concrete proof,” Ayuk said.
