NNPCL: Long-term strategic imperatives (part six)

This is the sixth article in the series titled “NNPCL: Long-term strategic imperatives”. The series is canvassing the need for the privatisation of the entire Nigerian National Petroleum Corporation Limited (NNPCL) and its subsidiaries along the path of the privatisation of British Petroleum, which took nine years to achieve and turned the company into a globally competitive oil and gas major. The justification is for NNPC Limited, as a privately held national oil company, to focus more intently on its upstream operations to enhance the nation’s portfolio of oil and gas assets to the fullest and more productively and profitably, thereby optimising our overall benefits from our upstream hydrocarbon resources. The first article laid the foundation and conceptual framework for the series, and parts two to five focused on the privatisation of the midstream (the three refineries) and downstream assets (NNPC Retail Limited) of NNPCL. The current article will be devoted to the need for NNPCL to focus its attention a hundred percent on its upstream operations, which is where our strategic national interests in the oil and gas sector are most paramount and urgent, against the background of the energy transition plan (ETP) and ensuring Nigeria derives the maximum benefits from its enormous gas reserves, which are 210.54 trillion cubic feet (TCF) as of January 2025, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The proposed NNPCL’s exclusive strategic focus on the upstream oil and gas sector will be guided by and aligned with the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) long-term strategic plan for the Nigerian oil and gas sector, the present administration’s Decade of Gas programme and the imperatives of energy security and sustainability.

The Bola Ahmed Tinubu Administration within two years unleashed a number of transformative policy reforms in the Nigerian upstream oil and gas sector that have provided the required business environment and incentive framework that have increased the number of rig counts from 14 in July 2023 to 46 in mid-2025, with the number increasing to 69 in October 2025 and with a total investment commitment of $8 billion within the same period, June 2023 to October 2025. The reforms, which are based on the foundation of the Petroleum Industry Act (PA) 2021, include targeted fiscal and regulatory incentives, streamlined contracting approvals and performance-based tax credits for companies that achieve verifiable cost reductions. These reforms have unlocked investments that have been stalled for decades, like the offshore gas project in the HI field, for which a final investment decision (FID) of $2 billion was taken on October 14, 2025, by Shell Nigeria Exploration and Production Company Limited (SNEPCo); the $550 million Ubeta gas project by TotalEnergies; and the Bonga North Deepwater, a $5 billion deepwater crude oil production project announced by SNEPCo in December 2024.

“These reforms have unlocked investments that have been stalled for decades, like the offshore gas project in the HI field, for which a final investment decision (FID) of $2 billion was taken on October 14, 2025, by Shell Nigeria Exploration and Production Company Limited (SNEPCo); the $550 million Ubeta gas project by TotalEnergies; and the Bonga North Deepwater, a $5 billion deepwater crude oil production project announced by SNEPCo in December 2024.”

As a national oil company, NNPCL is the primary implementation agency working with NUPRC and the international oil companies (IOCs) and indigenous oil companies to develop Nigeria’s crude oil reserves and gas reserves. Nigeria’s crude oil reserves were officially put at 37.28 billion barrels as of January 2025, while our gas reserves were 210.54 TCF, also as of January 2025. Nigeria’s crude oil production target for 2025 is 2.1 million barrels of oil per day (mbpd), while the target for 2030 is 4 mbpd. According to the Organisation of Petroleum Exporting Countries (OPEC), Nigeria’s actual oil production was 1.39 mbpd in September 2025, down from 1.43 mbpd in August and 1.50 mbpd in July 2025. Nigeria’s gas production in July 2025 was 7.59 billion standard cubic feet per day (BSCFD), while the target for 2030 is 10 BSCFD. The foregoing shows that there is so much work NNPCL, working with other strategic partners in the upstream oil and gas sector, needs to do to realise these targets. There is huge potential for both crude oil production and gas production, even as Nigeria has three times more gas reserves than oil reserves, compared on an energy equivalent basis.

The potential for offshore deepwater oil prospecting and production is huge, as the $5 billion Bonga North Deepwater oil production project attests to. But the potential of gas production in Nigeria is even greater. Nigeria ranks as the ninth largest holder of proven natural gas reserves globally as of early 2025, while we rank 19th in natural gas production globally as of early 2025. This shows that there is so much work Nigeria needs to do to bridge the gas reserves-gas production gap. This should be the number one mandate before NNPCL: to work collaboratively with NUPRC and key international and local upstream companies to ramp up Nigeria’s natural gas production in the next five to ten years. The ongoing Nigeria Liquefied Natural Gas (NLNG) Train 7 expansion project is expected to increase the capacity of the plant from 22 million tonnes per annum (mtpa) to 30 mtpa, a 33 percent increase. Efforts to implement the Train 8 expansion plan should be set in motion without delay, given that Train 7 is taking about seven years to be completed. Similarly, the Brass LNG and the Olokola LNG projects should be revived. Instead of being distracted by the pressure to revive the moribund petroleum refineries, NNPC should work assiduously, putting on the cap of an opportunity-seeking private enterprise to upscale its portfolio of gas investments in partnerships with key investors in the gas sector, who are mainly the IOCs.

NNPCL should follow the pioneering spirit of UTM Offshore, the promoter of Nigeria’s first floating LNG (FLNG) plant, to embark on multiple FLNG projects simultaneously, as they are of smaller scale, cost much less than onshore LNG plants and are delivered on average within three years after the final investment decision (FID), compared to an average of four to five years for an onshore LNG plant.

From the foregoing, it is clear that NNPCL’s continued romance with its inoperable refineries and mission drift into retail trade have been great distractions with huge opportunity costs both for NNPCL, the Federal Government and the Nigerian economy. Nigeria has sustained huge losses of revenue, job and wealth creation and loss of enormous investment opportunities over the years in the gas sector, realising that we are three times more of a gas country than an oil country in terms of our proven reserves of both crude oil and gas. NNPCL divesting from and fully exiting both the midstream and downstream oil and gas sectors will enable it to face squarely the challenges and huge opportunities in the upstream sector, particularly the virtually limitless opportunities in the gas sector, against the background of the closing window of opportunity for investment in gas projects imposed by the energy transition or decarbonisation bandwagon.

Mr Igbinoba is Team Lead/CEO at ProServe Options Consulting, Lagos.