Major Developments in Nigeria’s Oil & Gas Sector

Nigeria aims to increase crude oil production to upwards of two million barrels per day (bpd) by 2026, reinforcing its position as one of Africa’s leading oil producers. Recent developments in the oil and gas sector – spanning regulatory reform, strategic acquisitions, infrastructure projects and enhanced exploration and production activities – support this goal, as both indigenous and international operators expand their investments in the country.

GEIL Launches Onshore Terminal

Nigerian energy firm Green Energy International Limited (GEIL) has exported its first oil from the country’s first indigenous onshore crude export terminal in Otakikpo, Rivers State. Commissioned in June 2025, the facility features 750,000 barrels of storage – expandable to three million barrels – and an export capacity of 360,000 bpd. Crude is transported via a 23 km pipeline to a single-point mooring system. The terminal’s first cargo, lifted by a Shell-chartered Aframax tanker, marked the start of operations. Completed in less than two years, the project is designed to serve about 40 marginal fields and reduce evacuation costs by up to 40%.

ExxonMobil Plans Investment in Usan Oilfield

Energy major ExxonMobil is set to inject $1.5 billion between 2025 and 2027 into revitalizing the Usan deepwater oilfield (OML 138) in Nigeria’s Niger Delta. With 34 subsea wells tied to a 180,000 bpd FPSO and two-million-barrel storage facility – where production peaked at 100,000 bpd in 2014 – the project targets a Final Investment Decision (FID) by Q3, 2025, pending approval of the field development plan and partner funding. This effort complements ongoing development in Owowo and Erha, aligning with Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) “Project 1 Million Barrels” initiative to boost production to 2.4 million bpd by 2026.

Shell Increases Stake in OML 118

Oil major Shell will acquire TotalEnergies’ 12.5% stake in the offshore OML 118 Production Sharing Contract, – an oil lease including the Bonga field offshore Nigeria. The decision was taken in May 2025, raising Shell’s interest from 55% to 67.5%. Shell operates the Bonga field via the Bonga FPSO and is developing Bonga North, with FID made in December 2024. The acquisition supports Shell’s goal to grow liquids production by 1% annually through 2030. The deep-water Bonga field, producing since 2005, has a capacity of 225,000 bpd and reached its one-billionth barrel milestone in 2023. The deal awaits regulatory approvals and is expected to close by year-end.

Nigeria Issues Upstream Executive Order

Nigeria’s government has launched a performance‑based tax relief scheme to boost cost efficiency in upstream petroleum operations. Bola Ahmed Tinubu, President of Nigeria, signed the Upstream Petroleum Operations Cost Efficiency Incentives Order in April 2025, providing fiscal clarity and drawing strong interest from investors in the energy sector. Operators across onshore, shallow-water and deep offshore sectors can earn tax credits of up to 20% of their annual tax liability by meeting cost‑reduction benchmarks verified by the NUPRC. The NUPRC will set and review these benchmarks annually and coordinate with the Federal Inland Revenue Service to validate claims.

Nigeria–Morocco Gas Pipeline Advances

The Nigeria–Morocco Gas Pipeline, a project spanning 5,600 km, has made progress in 2025. Feasibility and Front-End Engineering Design studies are complete and the pipeline route has been finalized. A joint Nigeria–Morocco special-purpose vehicle has been established to oversee development, with agreements signed by participating countries. FID is expected by the end of 2025. Key financiers and partners include the UAE, European Investment Bank, Islamic Development Bank, OPEC Fund and China’s Jingye Steel. Tendering for Moroccan sections is scheduled this year, with later phases extending through West African countries.