Business
Nigeria Doubles Down On Oil After Years Of Trouble
After months of stalling because of Covid restrictions and OPEC cuts, as well as significant international criticism over misplaced funds, Nigeria appears to be optimistic about the future of its faltering oil industry in a time when few others are.
The Nigerian government announced this week that it expects the country to produce 1.88 million barrels per day of crude oil in 2022, assuming a benchmark price of $57 per barrel. In the 2022-2024 Medium-Term Expenditure Framework (MTEF), just approved by the senate, the government also predicted GDP growth of 4.2 percent and inflation of 13 percent in 2022. Inflation in Nigeria decreased to 17.01 percent in August, in a country that has continued to struggle with a double-digit inflation rate since 2016.
This is a highly optimistic plan seeing as Nigeria, Africa’s largest economy, was hit particularly hard by the Covid-19 pandemic, from which it is still recovering. The Nigerian economy contracted 1.92 percent in 2020, after a growth of 2.92 percent in 2019. However, the contraction was lower than the World bank estimate of a 4 percent contraction or the IMF estimate of 3.2 percent.
The hopeful budget approval follows President Muhammadu Buhari’s signing of the Petroleum Industry Bill into law in August. This comes after two long decades of delays in approving the PIB, at a time when much of the rest of the world is moving away from fossil fuel strategies towards green policies with a focus on renewable energy. Plans to stop the sale of diesel and petroleum vehicles as well as targets for net zero-carbon emissions by 2050, across Europe and North America, make the new Petroleum Industry Act (PIA) appear somewhat outdated. However, advocates for the Bill believe that the African continent will continue to rely on oil production for fuel well into the next decade. The President stated in August at the inauguration of the Steering Committee and PIA Implementation Group that Nigeria may have lost as much as $50 billion worth of investment because of years of delays in enacting the PIA, as investors were uncertain of Nigeria’s oil and gas outlook.
There has been significant criticism over Nigeria’s failure to establish a better regulatory environment for its oil and gas industry until now, which would have increased investor interest in the region. This is particularly pertinent at a time when other African states are beginning to develop their oil industries, and further competition comes from new emerging markets such as Guyana and Suriname.
Critics also point towards the $14 billion in funds provided to develop the Niger Delta region, the heart of the Nigerian oil industry, that was ill spent between 2001 and 2019. The funds were expected to support projects to “offer a lasting solution to the socio-economic difficulties of the Niger Delta Region and to facilitate the rapid and sustainable development of the Niger Delta into a region that is economically prosperous, socially stable, ecologically regenerative and politically peaceful.”
The inability to establish an adequate regulatory environment for foreign oil and gas investors for so long, as well as government’s failure to use funds to develop its oil-rich Niger Delta region, have put the country at the bottom of the list for many investors now attracted to up-and-coming oil regions without such a difficult past in the sector.
Not to forget, Nigeria is not out of the woods, still battling with reduced OPEC+ oil quotas and the lack of investment that came alongside them. Angola, Nigeria, and Kazakhstan have failed to increase their oil production in line with the OPEC+ easing of cuts this August, primarily due to years of underinvestment in the oil-rich nations’ energy industries.
In addition, concerns around Covid-19 restrictions continue to plague Nigeria’s oil industry, as the Delta region faces yet another lockdown if cases continue to rise. The challenges of 2020 could be seen all over again should Rivers State go into lockdown, with oil firms facing difficulties in transporting personnel to and from oil fields, as well as restrictions affecting pipeline and facilities maintenance, as was the case last year.
But the Nigerian government and those left in Nigeria’s oil industry are hopeful that ongoing demand from the African continent and increasing demand from Asia for oil and gas could help boost the country’s appeal following the enactment of the PIA. With 37 billion barrels of proven oil reserves, ranking 10th in the world, Nigeria has always had significant potential to become oil superstar but has until now lacked the regulatory framework to make this dream a reality until now.
So, the question is whether the “landmark” PIA will really be as ground-breaking for Nigeria’s oil industry as once hoped. The Nigerian government holds out hope for the new Act attracting greater foreign investment in the oil-rich nation, but time is yet to tell whether oil majors are willing to take a gamble on the African state so late in the game.
Other companies that look to capitalise on higher prices this year:
Transocean (NYSE:RIG) After having missed on earnings for a number of quarters in a row, this offshore rig giant is seeing opportunities left and right as oil majors are once again betting big on offshore oil and gas production. The increasing market for offshore operations couldn’t come at a better time for Transocean, which remains one of the more speculative players in its sector.
At the moment, the company is looking to expand its footprint in the Gulf of Mexico. Earlier this month, it landed a $252 million firm contract for its new, ultra-deepwater drillship, the Deepwater Atlas. Transocean’s client, BOE Exploration and Production LLC looks to commence operations at the Shenandoah project in the 3rd quarter of 2022.
Suncor Energy (NYSE:SU; TSE:SU): Suncor has been in the news this week as it decided to shut down some of its oil sands production due to a mechanical disruption. Syncrude, majority owned by Suncor, produces some 275,000 bpd of crude oil from bitumen at its upgrader in Alberta, according to the latest data, which was for January to May. Despite the disruption, Suncor remains one of the most attractive oil plays in Canada, which some see as the best contrarian oil bets out there.
Suncor’s relatively low extraction costs per barrel, coupled with strict ESG standards and long lasting reserves make the company interesting for long-term oil investors.
And Suncor isn’t just focusing on its flagship Syncrude project. Two weeks ago, the company announced the plan to extend the life of the Terra Nova FPSO. Together with Murphy Oil and Cenovus, and with support from the local government, Suncor looks to extend the production life of the Terra Nova FPSO by around 10 years.
Bradstock Reports for Oilprice.com
The Minister of State for Industry, Trade and Investment, John Enoh said this at the 8th annual induction and conference of the Chartered Institute of Project Managers of Nigeria (CIPMN).
He explained that abandoned projects continue to lock up public funds that could have been used for infrastructure development, industrial growth, job creation and essential social services.
Represented by the ministry’s Permanent Secretary, Chris Osa Isokpunwu, he said the impact goes beyond financial losses, as incomplete projects affect communities and limit access to important public services
He cited examples of that remain unopened, schools that cannot accommodate students, roads that fail to connect communities and electricity projects that have not delivered their intended benefits.
The Registrar-General and Chief Executive Officer of CIPMN, Henry Ifeanyi Mbadiwe, also identified poor project management as a major challenge affecting development in Nigeria.
He revealed that the institute had developed a project management curriculum for Nigerian universities, which has received approval from the National Universities Commission (NUC). The programme is expected to enable universities to offer project management as a bachelor’s degree.
Mbadiwe further referenced findings by the Presidential Projects Assessment Committee, which identified 11,886 ongoing federal capital projects in 2011, with an estimated financial commitment of ?7.78 trillion.
He noted that inadequate planning, supervision, accountability and implementation were among the factors contributing to the abandonment of projects across the country.
The minister called for stronger project management structures across ministries, departments and agencies to improve planning, monitoring and evaluation.
He added that the Federal Ministry of Industry, Trade and Investment had introduced a 90-day implementation reporting cycle to strengthen transparency and monitor the progress of government programmes.
Ikenga said the company remained committed to Nigeria’s power sector and would continue investing in its operations despite the challenging business environment.
He spoke in Lagos at the third edition of the Shell Power Conference, themed “Powering Nigeria’s Progress: Turning Ambition and Action into Sustainable Impact”.
The Transcorp Power chief said the company would sustain electricity generation, invest in its facilities and deliver value to shareholders.
“Transcorp Power is a long-term player, not a short-term player. This year has been challenging, but what is important is getting power to schools, hospitals and businesses to power progress,” he said.
Ikenga said the company’s focus on operational efficiency and investment had strengthened its contribution to Nigeria’s electricity supply.
He disclosed that since acquiring the Ughelli Power Plant in Delta State in 2013, Transcorp Power had quadrupled its available generation capacity.
He also said the company became the first privatised power generation firm to receive a post-privatisation discharge certificate after fulfilling all its privatisation obligations.
The company’s unaudited results for the nine months ended September 30, 2026, showed a profit before tax of N83.1 billion, while its profit-before-tax margin rose to 31.2 per cent from 29.6 per cent recorded in the corresponding period of 2025.
Its total assets rose to 11.7 per cent amounting to N629.5 billion, while shareholders’ funds grew 8.9 per cent to N199.8 billion. Cash and cash equivalents also rose to N10.3 billion, supported by improved collections.
On the company’s contribution to grid stability, Ikenga said Transcorp Power’s black-start capability enabled it to restart operations without relying on electricity from the national grid.
He explained that the capability allowed the company to support power restoration following grid disturbances, helping to restore electricity supply to homes, businesses and industries.
Ikenga noted that Nigeria had an installed electricity generation capacity of about 13,000 megawatts, with an estimated potential of 50 gigawatts, adding that realising the potential would require effective coordination across the entire value chain.
“Everything in the value chain has to work,” he said.
He called for stronger collaboration among federal and state governments, regulators and private-sector operators, alongside increased private investment, to build a sustainable electricity market.
This was contained in a statement issued on Thursday by his Senior Special Assistant on Communications and Press Secretary, Maryann Duke.
The statement said Oyedele pointed to “improved digital systems, including electronic invoicing, as a key driver behind a record of N33tn in government revenue collected between January and October 2026.”
The minister said the performance demonstrated the potential of technology to improve revenue administration, strengthen compliance and increase efficiency across government institutions.
Speaking on the theme, ‘Digital Sovereignty and Ethics: Guarding the Economy for the Next Generation,’ Oyedele warned that Nigeria risked losing substantial economic opportunities if it continued to depend heavily on foreign digital infrastructure.
Citing Nigerian Communications Commission figures, he disclosed that the country recorded more than 157 million active internet subscriptions as of May 2026.
He explained that these connections generated significant volumes of information through financial transactions, healthcare, education and taxation.
However, citing estimates from the Nigeria Data Protection Commission, Oyedele said as much as 90 per cent of the country’s data was hosted abroad.
According to him, the situation has implications for foreign exchange expenditure, employment opportunities, technological skills and Nigeria’s control over information generated by its citizens.
He compared the country’s reliance on foreign digital infrastructure with its historical dependence on imported refined petroleum products, warning against a situation where Nigerian data would be processed abroad and the resulting services sold back to domestic users.
The minister consequently advocated greater investment in local data infrastructure, technical expertise, cybersecurity and predictable regulations to enable Nigerian businesses to capture more value from the digital economy.
He clarified that digital sovereignty should not translate into technological isolation but should strengthen Nigeria’s capacity to participate competitively in international markets.
Addressing graduating students, Oyedele urged young Nigerians to become developers of technological solutions rather than remain primarily consumers of products created elsewhere.
He identified artificial intelligence as both a disruptive force and an opportunity for innovation, advising graduates to acquire relevant digital skills alongside critical thinking, creativity, sound judgement and integrity.
The minister also cautioned against irresponsible online behaviour, explaining that digital footprints increasingly influence employment prospects, commercial relationships and professional credibility.
Oyedele outlined five priorities for graduates, including continuous learning, value creation, integrity, responsible digital citizenship and active participation in national development.
“Your degree is evidence of what you have learned. Your competence will demonstrate what you can do. Your character will reveal who you truly are,” he told the graduating students.
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