Oil & Energy
NNPC, Oil Firms’ Feud Hampers Investment
The ongoing disputes between the Nigerian National Petroleum Corporation and international oil companies over Production Sharing Contracts (PSCs) is hampering further investment, even as funding challenges have led to a significant decline in joint venture oil and gas production.
Under the PSCs, the NNPC holds the concessions, and the contractors (mostly the IOCs) fund development of the deepwater offshore blocks and recover their costs from the production after royalty payments.
Faced with declining oil revenue, Nigeria announced in 2015 that it planned to review the PSCs with foreign companies, proposing an increase in royalty rates for terrains beyond 1,000 meters, from zero to three per cent, and a royalty rate of eight per cent for output of up to 50,000 bpd.
“Negotiations between the NNPC and the PSC contractors [are] ongoing to resolve all PSC disputes. The goal is to ensure continuous investment by the IOCs while maintaining a competitive share of 47 per cent,” the Group Managing Director, NNPC, Dr Maikanti Baru, said in his presentation at an industry conference in Lagos last week, a copy of which was obtained by our correspondent.
Under the JV regime, both the NNPC and the IOCs fund field development capital expenditure through cash calls and receive prorate share of crude oil produced in the proportion of their JV equity holdings.
The Chief Executive Officer, Stanbic IBTC Bank, Mr Demola Sogunle, in his presentation at the Nigerian Annual International Conference and Exhibition of the Society of Petroleum Engineers, said the JV model had been challenged in recent years, majorly due to funding challenges, which had negatively impacted on growth of JV oil and gas production.
“The JV oil production has been on the downward trend since 2010. The trend is attributable to the reduced investment in the JV assets by the IOCs,” he said.
In December 2016, the NNPC exited the cash call agreement and opted for alternative financing arrangement.
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Digital Technology Key To Nigeria’s Oil, Gas Future

Experts in the oil and gas industry have said that the adoption of digital technologies would tackle inefficiencies and drive sustainable growth in the energy sector.
With the theme of the symposium as ‘Transforming Energy: The Digital Evolution of Oil and Gas’, he gathering drew top industry players, media leaders, traditional rulers, students, and security officials for a wide-ranging dialogue on the future of Nigeria’s most vital industry.
Chairman of the Petroleum Technology Association of Nigeria (PETAN), Wole Ogunsanya, highlighted the role of digital solutions across exploration, drilling, production, and other oil services.
Represented by the Vice Chairman, Obi Uzu, Ogunsanya noted that Nigeria’s oil production had risen to about 1.7 million barrels per day and was expected to reach two million barrels soon.
Ogunsanya emphasised that increased production would strengthen the naira and fund key infrastructure projects, such as railway networks connecting Lagos to northern, eastern, and southern Nigeria, without excessive borrowing.
He stressed the importance of using oil revenue to sustain national development rather than relying heavily on loans, which undermine financial independence.
Comparing Nigeria to Norway, Ogunsanya explained how the Nordic country had prudently saved and invested oil earnings into education, infrastructure, and long-term development, in contrast to the nation’s monthly revenue distribution system.
Chief Executive Officer (CEO) and Executive Secretary of the Major Energies Marketers Association of Nigeria (MEMAN), Clement Using, represented by the Secretary of the Association, Ms Ogechi Nkwoji, highlighted the urgent need for stakeholders and regulators in the sector to embrace digital technologies.
According to him, digital evolution can boost operational efficiency, reduce costs, enhance safety, and align with sustainability goals.
Isong pointed out that the downstream energy sector forms the backbone of Nigeria’s economy saying “When the downstream system functions well, commerce thrives, hospitals operate, and markets stay open. When it fails, chaos and hardship follow immediately,” he said.
He identified challenges such as price volatility, equipment failures, fuel losses, fraud, and environmental risks, linking them to aging infrastructure, poor record-keeping, and skill gaps.
According to Isong, the solution lies in integrated digital tools such as sensors, automation, analytics, and secure transaction systems to monitor refining, storage, distribution, and retail activities.
He highlighted key technologies including IoT forecourt automation for real-time pump activity and sales tracking, remote pricing and reconciliation systems at retail fuel stations, AI-powered pipeline leak detection, terminal automation for depot operations, digital tank gauging, and predictive maintenance.
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