Pipeline security, fresh investments drive Nigeria’s oil ambitions

Nigeria is pursuing higher oil production through fresh investments, new licensing rounds, and pipeline security as it targets three million barrels per day by 2030, DARE OLAWIN writes

Nigeria is seeking to increase crude oil production to three million barrels per day by 2030, more than two decades after output peaked at about 2.5 million bpd, as the government pursues fresh investments, expands licensing opportunities and strengthens the protection of oil infrastructure.

The Nigerian Upstream Petroleum Regulatory Commission is leading the drive through licensing rounds designed to attract investors into the upstream sector. The commission has announced a 2026 licensing round offering 40 oil and gas blocks across land, shallow-water and deepwater terrains.

Alongside the investment drive, the continued protection of oil assets, particularly pipelines in the Niger Delta, remains an important consideration in efforts to increase production and reduce losses associated with oil theft.

Nigeria’s crude oil production peaked at approximately 2.5 million bpd in November 2005, according to historical production data. Despite subsequent efforts to attract investment, including reforms introduced under the Petroleum Industry Act, national output, including condensate, has remained below that historical peak.

The Federal Government is targeting production of three million barrels of oil per day and 12 billion cubic feet of gas by 2030. Achieving these targets will require additional capital, improved infrastructure, stronger security and sustained investment in exploration and production.

A member of the governing board of the Nigerian Upstream Petroleum Regulatory Commission, Sunday Adebayo, recently stated that recent developments in the sector indicated progress towards higher production.

“We have already started in a good direction. One of them is the bid rounds, which were successfully done. New ones will be done that will bring in more players. Already, the Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Mrs Oritsemeyiwa Eyesan, has announced the commencement of the 2026 Licensing Round and offered 40 oil and gas blocks to investors. The rig count has increased tremendously, and I see more rigs coming in,” he said.

Adebayo also identified cooperation between host communities and oil companies as an important factor in sustaining operations and attracting investment.

“The host communities that are integrated into the Petroleum Industry Act are co-operating favourably with the companies operating in their environment. We also need to look at new horizons because there are some horizons that have not been taken advantage of. The abandoned hosts now want activities to continue in the area, like the Ogoni area. Fortunately, our own Chairman of the governing board of NUPRC, Senator Magnus Abe, is from there. A lot of activities are happening. And I see more companies; they have more indirect investments,” he said.

Licensing opportunities

The NUPRC Chief Executive, Oritsemeyiwa Eyesan, recently said the 2026 licensing round followed the approval of President Bola Tinubu and the Minister of Petroleum Resources.

She said the 40 blocks would be available to investors with the technical competence, financial capacity and commitment required to develop Nigeria’s petroleum resources.

“This round offers 40 blocks across land, shallow water and deepwater terrains. They are open to investors with the technical competence, financial capability and, above all, the commitment to develop Nigeria’s petroleum resources.”

Eyesan said the commission would continue to pursue measures aimed at attracting capital into the sector, noting that competition for upstream investment was intensifying.

“We will not rest on our laurels. Competition for upstream capital is fierce, and it grows fiercer by the day. Investors have choices. They go where the rules are clear, where the process is predictable and where data can be trusted,” she said.

The licensing round comes as Nigeria seeks to reverse a prolonged decline in investment in its oil and gas industry. According to Eyesan, annual investment in the sector has fallen from $26bn in 2014 to about $2bn.

The decline underscores the need for Nigeria to improve its investment climate and demonstrate that new projects can deliver competitive returns.

The NUPRC has also identified the potential for substantial investment in offshore oil and gas projects following the introduction of new incentives. The commission said the incentives could attract $50bn in fresh investment into Nigeria’s offshore energy sector.

However, attracting the funds will require the availability of skilled workers to support increasingly complex exploration and production activities.

Speaking at a human resources conference, Eyesan said Nigeria needed to improve its supply of skilled personnel, including workers with digital capabilities, to take advantage of emerging offshore opportunities.

“Today we are attracting new investments, and so we want to see an upward trajectory. It stands to reason that you must go back to the basics. First of all, we need the right competencies in sub-surface,” she said.

The emphasis on skills reflects the growing technical demands of oil and gas projects, particularly offshore developments, where companies require specialised expertise to identify reserves, develop fields and maintain production.

Investment commitments

Nigeria’s efforts to attract new capital also depend on ensuring that companies awarded oil blocks fulfil their financial obligations.

The NUPRC has warned 31 companies that emerged winners of 37 oil and gas blocks in the 2025 licensing round to pay their signature bonuses within the stipulated period or risk losing their provisional awards.

The warning came one month after the commission hosted the commercial bid conference in Abuja, where the successful companies emerged as winners of the available blocks.

The commission said compliance with signature-bonus payments had commenced following the issuance of provisional awards.

“Exactly a month ago, the NUPRC hosted the 2025 commercial bid conference in Abuja, where 31 companies emerged winners of 37 oil and gas blocks. Having issued the winners with the provisional awards, compliance with the payment of signature bonuses has already begun.

“Winners who fail to pay signature bonuses within the stipulated time frame in line with the Petroleum Industry Act will forfeit their bid guarantee and lose their provisional awards to the reserve bidders,” the NUPRC stated.

Under the Petroleum Industry Act and applicable licensing guidelines, successful bidders are required to pay signature bonuses ranging from $3m to $7m per block.

They must also provide the required guarantees, pay first-year rents and meet other post-award conditions within the prescribed period. Failure to comply results in the transfer of the affected award to the next-ranked reserve bidder, according to the commission.

The requirements are intended to ensure that companies awarded blocks meet their financial commitments and are positioned to proceed with the development of the assets.

Mature fields

While new licensing rounds are expected to attract investors, existing fields also offer opportunities to increase production through additional capital expenditure and improved operations.

Chairman and Chief Executive Officer of Brittania-U, Catherine Uju Ifejika, recently highlighted the importance of investment in mature oil assets, citing the company’s Ajapa field.

She said Brittania-U invested more than $400m after acquiring the asset from Chevron. The investment included drilling additional wells and deploying a Floating Production, Storage and Offloading facility.

According to her, the investment enabled Ajapa to begin production at about 2,300 bpd in 2010, followed by increased and more stable output.

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The example illustrates how additional investment in existing assets can support production growth, particularly where operators can improve recovery through new wells, facilities and operational upgrades.

For Nigeria, developing both new and mature fields will be important in achieving higher output. However, investment decisions will depend on companies’ assessments of geological prospects, infrastructure, operating costs, security and the stability of the regulatory environment.

Nigeria has recorded growth in crude oil and condensate production this year. According to the NUPRC, total output rose from 1.48 million bpd in February to 1.735 million bpd in June.

The country is also seeking to increase production in response to major global supply disruptions caused by the war in Iran. Although the improvement in output represents progress, the gap between current production and the government’s three-million-bpd target remains substantial.

Closing that gap will require new projects to progress from licensing and investment commitments to actual production, alongside improvements in existing fields.

Pipeline security

The protection of oil infrastructure remains another consideration in Nigeria’s efforts to increase production and attract investment.

For many stakeholders, the Federal Government’s appointment of Tantita Security Services Nigeria Limited to protect oil assets and support stability in the Niger Delta has become part of the broader discussion about safeguarding the country’s petroleum revenues.

President Bola Tinubu appointed Tantita Security Services Nigeria Limited, led by High Chief Dr Government Ekpemupolo, popularly known as Tompolo, to protect oil assets in the region.

The arrangement was intended to support the national economy by protecting infrastructure and helping the country obtain greater value from its petroleum resources.

Tantita works with other security agencies to protect oil assets and support peace and stability in the Niger Delta. Its operations have focused on securing pipelines, reducing opportunities for oil theft, and helping maintain the transportation of petroleum resources.

The security of pipelines is particularly important because disruptions can affect production, exports, and government revenues. Damage to infrastructure and illegal tapping can also increase operating costs and undermine confidence in the reliability of supply.

Stakeholders advocating continued collaboration with Tantita have argued that protecting oil infrastructure is necessary to sustain production and support the country’s economic objectives.

A recent survey cited in the article found that a majority of respondents attributed the de-escalation of security incidents in the Niger Delta to pipeline surveillance operations carried out by Tantita. However, pipeline protection is only one component of the wider requirements for energy security and production growth.

President-General of the Niger Delta Progressive Alliance, Nse Udoh, said pipeline surveillance had helped national institutions move from reacting to crises towards longer-term planning.

“It is important to clarify the role of pipeline surveillance within the wider energy landscape. Energy security encompasses the full value chain, from exploration and production to refining, distribution, pricing policy, and subsidy frameworks. Pipeline surveillance does not manage these domains,” he said.

He added: “Its mandate is precise: safeguarding critical infrastructure that transports petroleum resources. Yet this single function has proven foundational. Without secure transportation channels, production targets falter, refining plans collapse, exports decline, and fiscal projections become unreliable.”

Udoh said protecting oil assets should be viewed as a prerequisite for the effective functioning of the petroleum value chain.

“Asset protection, in this context, is not a supporting activity. It is a precondition for economic order. In effect, the pipeline is the hinge on which the entire petroleum value chain turns. When that hinge is weak, every other link in the chain carries strain. When it is secure, the entire system gains coherence.”

He said sustained monitoring and rapid-response systems had reduced pipeline breaches and illegal tapping, while improved receipt rates had supported higher production.

Udoh also linked the security of petroleum transportation infrastructure to Nigeria’s ability to meet export commitments and plan refining operations.

“Economic stability follows predictability. When crude flows are secure, refineries can plan feedstock intake with assurance. Export commitments can be met without fear of sudden shortfalls. Gas-to-power projects can operate without recurrent shutdown risks.”

He added that a more predictable operating environment could help investors assess risks and make decisions about projects in the sector.

“Investors can assess Nigeria’s petroleum sector with clearer risk profiles. Surveillance therefore does more than stop theft. It reintroduces reliability into national energy planning. And reliability is the bedrock upon which sustainable economic growth is built.

“With predictable flows, national budgeting becomes more credible, infrastructure planning becomes more precise, and long-term contracts become easier to negotiate. Predictability is the silent currency of modern economies, and pipeline surveillance has begun restoring it,” he stated.

Higher accounted-for production can increase export revenues and foreign exchange inflows while strengthening the government’s fiscal position. Reduced losses and more consistent operations can also support the performance of oil companies and other institutions across the value chain.

Nevertheless, the extent to which these gains can be sustained will depend on continued infrastructure protection, repairs, investment and the effective implementation of industry reforms.

Improved oil receipts

Nigeria’s efforts to increase production and improve oil revenues come amid signs of improved external conditions.

Advisor in the African Department of the International Monetary Fund, Montfort Mlachila, said Nigeria was benefiting from improved oil prices, which had increased foreign exchange receipts and supported the growth of external reserves.

Speaking at the 2026 Annual Meetings of the World Bank and the IMF in Bangkok, Thailand, he said improved liquidity in the economy had also supported an upward revision of the country’s growth outlook.

According to Mlachila, Nigeria’s economic growth was projected to rise from four per cent last year to 4.2 per cent this year and 4.3 per cent in 2027.

The improved outlook provides a favourable backdrop for investment, but sustained growth in oil receipts will depend partly on production levels and the country’s ability to maintain reliable supplies.

Director of the IMF’s African Department, Zeine Zeidane, also identified Nigeria’s market size, entrepreneurial activity and technology-oriented population as factors that could attract private investment.

“This is a country that has a lot of dynamism, a lot of young entrepreneurs, a young, tech-savvy population. So there is, and it’s a large market, very attractive for private investment in general,” he said.

For Nigeria’s oil and gas industry, translating that investment potential into higher output will require more than the announcement of new blocks and incentives. Investors must be able to develop commercially viable projects within a predictable regulatory environment, supported by adequate skills, infrastructure and security.

The combination of new licensing opportunities, investment in mature assets and improved pipeline security offers a route towards higher production. However, the scale of the challenge remains evident in the difference between current output and the government’s 2030 ambition.

The ability to attract capital, meet licensing obligations, develop reserves and protect infrastructure will therefore be central to determining whether Nigeria can exceed its historical production peak and reach the three-million-barrel-a-day target.