Wood MacKenzie, a global energy research and consultancy firm, has suggested that for Nigeria to achieve President Bola Tinubu’s ambitious plan of 3 million bpd and 12 bcfd of gas by 2030, the country will require $12 billion annually.
In a report on the state of play in the country’s oil and gas sector, Woomac highlighted that between 2014 and 2024, investment in the West African nation’s hydrocarbons slumped by $24 billion, having fallen from $29 billion to $5 billion between those years.
Richly endowed with resources, Nigeria, it pointed out, not so long ago was among the most important sources of oil and gas production for Big Oil.
However, with recurring challenges, Woodmac stated that national liquids production has since fallen by 40 per cent from its 2005 peak to 1.6 million bpd currently, accelerated by the reallocation of capital towards lower-cost, lower-risk basins by the International Oil Companies (IOCs).
“Elected in 2023, in his role as Federal Minister of Petroleum Resources, President Tinubu has set ambitious new oil and gas production targets – 3 million bpd of liquids and 12 bcfd of gas by 2030.
“A culture change has begun with sweeping changes to the board at national oil company NNPC, more supportive fiscal policies and a suite of new JV operators suggesting the ingredients to drive growth are finally falling into place. The big question is: will the industry deliver?
“Investment has suffered a steep fall from a peak of $29 billion (real) in 2014 to just over $5 billion in 2024. We believe the latter is the absolute minimum required merely to sustain current levels of production. But to achieve the president’s targets, spending needs to more than double to $12 billion a year immediately and continue growing for the rest of the decade.
“There are already signs that things are moving in the right direction. Renaissance Africa Energy Company alone plans to invest $15 billion over five years, and we expect an uptick in activity by Oando and Seplat from their recently acquired assets. Shell has committed $5.5 billion at Bonga North and ExxonMobil could commit up to $10 billion on the Usan, Owowo and Erha fields,” Woodmac stated.
In the same vein, Woodmac emphasised that indigenous firms are producing more volumes than expected from their marginal fields, noting that even so, this group of companies now need to embrace a culture of growth.
From its discussions with the oil sector players, Woodmac stressed that it identified several of the key areas the industry, and government, must focus on, hinged on collaboration, urgency and pragmatism.
“NNPC can’t do it alone, it will require collaboration to unlock the growth potential. All operators must bring forward their top opportunities and work programmes. A common understanding and line of sight to where the incremental volumes will come from is a priority. Only then can partnerships and investment unlock synergies and tackle bottlenecks that have eluded the industry in the past.
“With 2030 targets looming, there is no time to lose. Delays in sign-offs and overbearing regulatory burdens can no longer be tolerated. Incentives provided to the industry are a good start, but the fiscal system remains complex and Nigeria is competing in a buyers’ market,” the research firm added.
The organisation highlighted Angola as a recent success story in West Africa, where it noted that the regulator has boosted activity by engaging with the industry, offering more competitive terms as well as structured and regular licensing.
According to Woodmac, for greenfield opportunities to be part of Nigeria’s solution by 2030, two shifts are required – a rapid signoff of development plans and pragmatism when challenging regulatory requirements become a blocker, while new production sources must be given priority.
“Not everything needed to get to the targets are under the government’s or industry’s control, of course. Volatile oil prices are already taking their toll on discretionary upstream spend globally. Moreover, many of the Nigerian indigenous companies have taken on considerable debt to acquire assets.
“But there is limited capacity for debt-fuelled growth, particularly in what remains one of the higher-cost and higher-risk oil and gas plays. The most viable route to accelerating growth is recycling cash flow from operations back into the assets, which is dependent on firm and stable oil prices,” it added.
For Nigeria to attain its goal of not just maintaining existing oil production, but adding another 1.3 million bpd and 4.6 bcfd of gas production in five years, which it described as admirably ambitious, Woodmac stated that it must consider the travails of the recent past.
“Even if Nigeria gets halfway towards its targets, it will be a significant success and would restore the industry’s faith in the country,” it said.
After sacking the erstwhile leadership of the national oil company, Tinubu recently tasked the newly installed NNPC board, reconstituted on April 2, 2025 with the ambitious targets to revitalise Nigeria’s energy sector and support the country’s economic reforms.
Emmanuel Addeh
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