Introduction
The Nigerian oil and gas sector experienced significant shifts in 2024, from major mergers and acquisitions to new regulatory changes and infrastructure developments. As indigenous companies take on greater roles, Nigeria is positioning itself as a key player in Africa’s energy transition. This report highlights the key industry developments and projections for 2025.
Key Highlights from 2024
- Surge in Mergers and Acquisitions
Nigeria’s oil and gas landscape witnessed a wave of acquisitions in 2024. Oando acquired Nigerian Agip Oil Company for $783 million, increasing its stake in key oil blocks. Meanwhile, Chappal Energies expanded its portfolio by acquiring a 10% interest in the SPDC joint venture. These deals underscore the growing influence of indigenous firms in upstream operations. - Infrastructure Growth: Dangote Refinery & LNG Expansion
The Dangote Refinery became Africa’s largest refining hub, reaching 85% operational capacity and reducing Nigeria’s dependence on imported petroleum products. The expansion of Nigeria LNG’s Train 7 project and new Floating Liquefied Natural Gas (FLNG) projects are driving the country’s commitment to the “Decade of Gas” initiative. - Regulatory Reforms and Investment Incentives
New tax incentives were introduced to attract foreign and domestic investments. The government rolled out policies to streamline approvals, reduce petroleum sector costs, and promote local content development. Key regulatory changes include the Midstream Petroleum Host Communities Development Trust and revised contract approval thresholds. - Challenges: Security, Investments & Oil Production Declines
Despite progress, challenges persist. Oil theft, pipeline vandalism, and security risks remain significant concerns, driving up operating costs. Nigeria’s crude oil production fluctuated throughout 2024, failing to meet the 1.7 million barrels per day (bpd) target. High production costs ($48 per barrel) continue to affect revenue generation. - Global Trends Impacting Nigeria’s Oil & Gas Industry
Geopolitical tensions, including the Russia-Ukraine war and OPEC+ supply cuts, shaped global energy markets in 2024. The rise of U.S. crude exports and increased competition from Middle Eastern suppliers affected Nigeria’s market share in Asia. Meanwhile, energy transition efforts are gradually gaining momentum, but challenges remain in policy implementation.
Outlook for 2025
Nigeria’s oil and gas sector is set for further transformation. Indigenous companies are expected to strengthen their foothold in upstream operations, while gas projects will play a crucial role in boosting economic growth. Regulatory adjustments and new investments will shape the industry’s future, with a strong focus on energy security and sustainability.
Read our report and outlook below.
