By Akpandem James
It would amount to driving against traffic to suggest that the Nigerian economy has been having a smooth ride. While key indicators show signs of gradual improvement, the strain on livelihoods remains evident. This persistent pressure has heightened expectations on government to accelerate recovery through the most visible channels. In this context, the oil and gas sector, for long the mainstay of the country’s economy, has again assumed strategic importance as the quickest route to stabilisation and growth.
Although the sector contributes less than 10% to the country’s Gross Domestic Product (GDP), it accounts for over 80% of export earnings, making Nigeria highly vulnerable to external shocks. Recent geo-political tensions, particularly the USA-Israel-Iraq hostilities, have further disrupted the global energy market with telling effects on economies such as Nigeria’s. These developments underscore a critical reality, and emphasise the imperative of strengthening domestic capacity in the oil and gas sector. It probably could have been worse in Nigeria if the economy had not been on the path to recovery from a debilitating weakness caused by past poor handling.
Arguably, the economy had reached the emergency gate by May 2023, but the shock therapy applied by the government accentuated the impact. Tough as the prescriptions of the petroleum subsidy removal and foreign exchange liberalisation are, they are seen as essential market reforms to stabilise a failing economy. While these reforms triggered short-term hardship, they also laid the foundation for longer-term stability and prosperity. Even with residual pains, it is evident that better days may be arriving soon, with the intensive policy initiatives in the oil and gas sector aimed at pushing up production levels and increasing revenue.
At the core of this reform momentum is a series of Executive Orders issued by the President Bola Ahmed Tinubu administration to speed up economic recovery. Apart from the Petroleum Industry Act (PIA) 2021, which lays the framework with clear mandates, the sector has seen the highest level of executive reform in the last three years. Between 2023 and last month, nine Executive Orders have been issued, six of which directly target the oil and gas sector, underscoring the urgency for results from the goose that lays the nation’s golden eggs. They include: Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024; Presidential Directive on Reduction of Petroleum Sector Contracting Cost and Timelines, 2024; Presidential Directive on Local Content Compliance Requirements, 2024; Value Added Tax (Modification) Order, 2024; Upstream Petroleum Operations (Cost Efficiency Incentives) Order, 2025; Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026.
The Order to Safeguard Federation Oil and Gas Revenues and Enhance Regulatory Clarity, issued in February this year, realigns oil and gas revenue flows with Constitutional requirements, reinforcing the country’s 1999 Constitution, which mandates that all resource revenues be paid into the Federation Account. The Order improves fiscal transparency, regulatory clarity and government revenue generation. In the main, it addresses revenue leakages and off-budget deductions linked to the PIA 2021.
Implications include suspending management and frontier exploration fees previously collected by the Nigerian National Petroleum Company Limited (NNPCL); requiring contractors to remit taxes, royalties and profit from oil directly to government authorities; and suspending gas flare penalty payments to the Midstream Gas Infrastructure Fund. The roles of the two main regulators, NUPRC and NMDPRA, have been clarified, while an inter-agency committee led by the Finance Minister oversees implementation. The reforms are to address declining revenue inflows that continue in spite of improved oil production and favourable market conditions. Collectively, these Orders aim to improve fiscal efficiency, reduce operational constrains and enhance investor confidence.
Beyond the Orders, a flurry of actions within the period has repositioned critical operations in the sector, including top management changes to align with government priorities in the overall public interest. With policy and regulatory framework taking shape, ramping up oil output has taken centre stage. Authorities have consequently tasked the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) with increasing oil production to two million barrels per day (bpd). Current production levels of about 1.84 million bpd signal steady recovery, though still short of national targets. Of course, the goal is not only to hit the benchmark but to sustain it, requiring stricter oversight, improved operational efficiency and sustained collaboration between regulators and operators.
While past declines were linked to disruptions in the Niger Delta and lack of accountability within the system, NUPRC says stability has returned. Ongoing licensing rounds and “drill or drop” enforcement are expected to unlock dormant assets, while indigenous firms continue to expand their role. The broader challenge remains balancing output growth with effective regulation and long-term industry stability. To create a more stable operating environment and grow the economy sustainably, NUPRC is deepening collaboration with other industry operators, setting accountability structures and working to sustain security in the Niger Delta.
Leadership has also played a defining role in driving the process. When Mrs Oritsemeyiwa Eyesan assumed duty at the Commission as chief executive officer in December 2025, she emphasised speed, efficiency and collaboration as key drivers for optimising upstream delivery. Her early engagement with stakeholders and push for internal reforms have contributed to renewed investor confidence, positioning the Commission as both regulator and business enabler. As a result of the new business environment, operators are already queuing up.
This repositioning is particularly obvious in the gas subsector. In April this year, the Commission and Nigeria LNG Limited intensified engagment to boost gas production, reflecting broader shifts in Nigeria’s energy landscape. Central to this is PIA-driven regulatory reform, with the Commission functioning as a business enabler to attract investment and improve operational efficiency. The push not only aligns with the government’s “Decade of Gas” agenda but also underscores persistent challenges, including ensuring consistent upstream supply, enforcing compliance and sustaining investor confidence. NLNG’s growing domestic LPG commitment and planned Train 7 expansion spotlight rising demand, underlining the need for stronger regulator-operator coordination to translate policy ambition into tangible production gains.
Apart from the three-year Petroleum Exploration Licence (PEL) agreement already signed with SeaSeis Geophysical Limited (SeaSeis), to acquire and process new 3D seismic and gravity data, ExxonMobil recently unveiled a $24 billion investment plan for Erha development projects targeting deepwater assets, signalling renewed confidence. During talks with NUPRC, the company sought regulatory backing ahead of a Final Investment Decision. Anchored on the Erha field, with expansion plans covering Usan, Owowo and Bosi, the initiative reflects improved fiscal stability and extended contracts. With the backing of NUPRC, the plan underscores a resurgence in deepwater activity and Nigeria’s push for sustained oil growth.
While reiterating its resolve to enhance local participation by positioning indigenous firms as key growth drivers, the Commission highlights the cumulative impact of smaller operators, stressing that consistent contributions can significantly raise national output. Citing Ingentia Energies Limited as a model, the regulator points to strong leadership, technical capacity and long-term institutional development as growth strengths, while cautioning that operators who focus on short-term gains risk competitiveness due to weak internal systems. It emphasises human capital development, regulatory compliance and collaboration, while urging firms to meet statutory obligations. Ingentia’s expansion plan to raise production to 30,000 barrels per day by 2030, reflects both the promise and challenges facing indigenous players.
There are also significant breakthroughs in infrastructure procurement. Recently, NNPC Limited completed the critical River Niger Crossing of the 130-kilometre Obiafu-Obrikom-Oben (OB3) gas pipeline, a milestone unlocking full capacity for two billion cubic feet of gas daily, strengthening supply reliability and supporting power generation and industrial growth. The project has been described as an engineering feat. For years, infrastructure gaps, execution delays and weak project governance have constrained gas utilisation despite vast reserves. The OB3 success underscores the importance of technical capacity, disciplined execution and sustained investment in overcoming such constrictions. It also reflects a broader ambition to build an integrated gas network capable of driving economic diversification. However, sustaining these gains will depend on consistent project delivery, maintenance culture and alignment between policy goals and operational performance across the sector.
Underlying these operational gains is a continued effort to strengthen governance and institutional stability within the sector. Apart from the exit and replacement last year of the leadership of the two key regulatory bodies, NUPRC and NMDPRA, further interventions have also been noticed. Recently, the Authority Chief Executive of the NMDPRA appointed not long ago, was replaced. NUPRC’s new board, led by Senator Magnus Abe, was inaugurated. These signal a deliberate push to enhance oversight, transparency and accountability. Industry observers note that this alignment of leadership with reform objectives is essential to sustaining confidence and ensuring policy continuity.
Secretary to the Government of the Federation, Senator George Akume, while inaugurating the board, tasked members with strategic oversight, policy direction and institutional stability to strengthen investor confidence, optimise revenue and ensure sustainable upstream development. They are expected to uphold transparency, accountability and regulatory independence while working closely with stakeholders.
Other members of the Board include: Mrs. Eyesan (Commission Chief Executive), Engineer Sunday Babalola (Non-executive Commissioner), Engineer Paul Jezhi (Non-executive Commissioner), Bashari Indabawa (Executive Commissioner), Muhammed Sabo Lamido (Executive Commissioner), Mrs. Patience Oyekunle (Permanent Secretary, Ministry of Petroleum Resources), Engineer Mustapha Lamorde (Executive Director, HSEC, NMDPRA) and Mr. Dalhat Muhammad Kamal (Director, Ministry of Finance). Ms. Olayemi Adeboyejo serves as Commission Secretary/Legal Adviser.
The chairman, Senator Abe, pledged collaboration, stressing credible leadership and sustained regulatory performance while assuring the management that his team will collaborate effectively to uplift the Commission and help the country. Commission Chief Executive, Mrs Eyesan, said the inauguration came at the most auspicious moment. “Today, the oil and gas industry is seeing volatility because of the war in the Middle East and the transition and its impact on the industry. Nigeria must position itself to respond appropriately to both the energy transition imperative and the disruptions in the Middle East.” She believes the Commission is positioned for the shocks or eventuality that may arise.
Industry experts have predicted that a sustained focus on this integrated approach in the sector, of combining policy reform, institutional strengthening, investment attraction and infrastructure provision could signal a turning point in Nigeria’s economic trajectory, transforming the hydrocarbon sector from a source of vulnerability into a more stable foundation for long-term growth.
- James, a Fellow of the Nigerian Guild of Editors and Member of the International Press Institute, resides in Abuja.
