The Federal Government of Nigeria has announced a sweeping reform in its oil and gas sector, effectively ending what it described as the “era of speculative licensing” where companies hold oil blocks without developing them. This bold move comes as the Nigerian National Petroleum Company Limited (NNPCL) revealed that all five of its major crude evacuation pipelines have achieved 100% operational availability between May and June 2025, marking a milestone in the battle against pipeline vandalism and oil theft.
Despite the infrastructural progress, Nigeria’s oil production remains significantly below the budgeted target of 2.02 million barrels per day (bpd), averaging just 1.35 million bpd in crude and 1.6 million bpd including condensates.
This contradiction—secure pipelines but poor production—was at the center of discussions at the 24th Nigeria Oil and Gas Energy Week in Abuja, themed: “Accelerating Global Energy Progress Through Investment, Partnerships & Innovation.” The event featured top oil sector players, investors, and policymakers.
In his keynote address, the Group Chief Executive Officer of NNPCL, Bayo Ojulari, announced that critical pipelines such as the Trans-Niger, Oando Brass, Trans Forcados, Trans Escravos, and Trans Ramos were now fully available for operations—a feat once deemed impossible due to chronic sabotage.
“For years, insecurity around our pipeline network hampered output. Today, through a united front of government, regulators, security forces, and industry, we have achieved full operational availability,” Ojulari said.
However, he raised concerns about the stagnant crude output despite these gains. “Now that the pipelines are available, the question becomes: where is the production?” he asked, blaming underinvestment and inactive license holders for the shortfall.
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, vowed that the government would revoke oil field licenses from companies that fail to demonstrate the technical and financial capacity to develop them.
“It is no longer acceptable for critical national assets to remain idle in the hands of speculative licensees. Licenses are not to be used as financial leverage for non-oil ventures,” Lokpobiri said.
He added that existing Joint Ventures and Financial/Technical Services Agreements would be reviewed to ensure alignment with national goals.
While the improved pipeline infrastructure is being lauded, analysts have cautioned that it doesn’t guarantee successful crude delivery. Energy analyst Kelvin Emmanuel explained that while the infrastructure is now available, crude theft, illegal tapping, and unaccounted losses between wellhead and terminal remain concerns.
Similarly, Olatide Jeremiah, CEO of Petroleumprice.ng, warned, “Theft and sabotage are still major risks. Without addressing these, output won’t surpass 1.5 million bpd despite improved infrastructure.”
In a bid to enhance competitiveness, the FG has engaged international consultants to harmonize Nigeria’s 273 oil industry fees. The consultant, a member of the Oil Producers Trade Section, has been tasked with benchmarking Nigeria’s fees with global standards.
“Investors won’t come where there are nearly 300 different fees. We must streamline and simplify if we want to compete,” Lokpobiri said.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, revealed that Nigeria’s 200+ trillion cubic feet of proven gas reserves are being prioritized through the Decade of Gas initiative.
He said the plan focuses on using gas for industrialization, electricity, LPG distribution, transportation, and exports. A key milestone was announced by Ojulari, who confirmed that the $2.8bn Ajaokuta-Kaduna-Kano (AKK) gas pipeline has successfully crossed the River Niger—a major technical hurdle.
As the energy week continues, the Federal Government is intensifying its campaign for new investments, leveraging restored pipeline security, regulatory reforms, and global partnerships. However, analysts argue that tangible improvements in oil output will depend on transparent regulation, sustained security, and genuine investor commitment.
Industry stakeholders await further action from the government on enforcement and clarity regarding license revocations. But for now, Nigeria’s message is clear: underperforming license holders must step up—or step aside.