The sixth installment of the series “NNPCL: Long-term strategic imperatives” examines the necessity for the privatization of the entire Nigerian National Petroleum Corporation Limited (NNPCL) and its subsidiaries. Drawing parallels with the nine-year privatization process of British Petroleum, this article advocates for a similar approach for NNPCL, transforming it into a competitive player in the global oil and gas market.
The focus of this article is to emphasize the critical need for NNPCL to concentrate exclusively on its upstream operations. This strategic shift is essential for maximizing Nigeria”s oil and gas portfolio, particularly in light of the country”s significant gas reserves, which are projected to be 210.54 trillion cubic feet (TCF) by January 2025, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The proposed strategy aligns with NUPRC”s long-term vision for Nigeria”s oil and gas sector, the current administration”s Decade of Gas initiative, and the overarching goals of energy security and sustainability. In the past two years, under the leadership of Bola Ahmed Tinubu, transformative policy reforms have been implemented within the Nigerian upstream oil and gas sector. These reforms have fostered a conducive business environment, resulting in an increase in rig counts from 14 in July 2023 to 46 by mid-2025, with expectations of further growth.
Investment commitments within this timeframe have reached $8 billion, reflecting renewed interest driven by strategic fiscal and regulatory incentives established under the Petroleum Industry Act of 2021. These incentives include streamlined contracting processes and performance-based tax credits for companies that achieve measurable cost efficiency.
Key projects benefiting from these reforms include Shell Nigeria Exploration and Production Company Limited”s final investment decision on the offshore gas project in the HI field, valued at $2 billion, and TotalEnergies” $550 million Ubeta gas project. Additionally, SNEPCo announced a $5 billion deepwater crude oil production initiative in December 2024.
As the national oil corporation, NNPCL serves as the principal agent for collaboration with NUPRC and both international and indigenous oil companies in the development of Nigeria”s oil and gas reserves. Current estimates indicate that Nigeria”s crude oil reserves stand at 37.28 billion barrels, while natural gas reserves remain at 210.54 TCF as of January 2025.
Nigeria aims to produce 2.1 million barrels of oil per day (mbpd) by 2025, with a target of 4 mbpd by 2030. However, recent figures from the Organization of the Petroleum Exporting Countries (OPEC) reveal an actual oil production of 1.39 mbpd in September 2025, down from previous months.
The gap between Nigeria”s gas reserves and production capabilities remains significant, highlighting the urgent need for NNPCL to collaborate effectively with NUPRC and key upstream partners to enhance natural gas output over the next five to ten years. The ongoing expansion project for the Nigeria Liquefied Natural Gas (NLNG) Train 7 is expected to raise the plant”s capacity from 22 million tonnes per annum (mtpa) to 30 mtpa, representing a 33 percent increase.
Furthermore, the revival of the Brass LNG and Olokola LNG projects is essential. Rather than diverting resources to refurbish outdated petroleum refineries, NNPCL should adopt a proactive approach, viewing itself as a private enterprise focused on expanding its gas investment portfolio in partnership with leading stakeholders in the gas sector.
Following the example set by UTM Offshore, which pioneered Nigeria”s first floating LNG (FLNG) plant, NNPCL should consider initiating multiple FLNG projects. These projects, being smaller in scale, are less expensive than traditional onshore LNG plants and can be delivered more swiftly.
Ultimately, NNPCL”s distractions with non-operational refineries and retail ventures have resulted in significant opportunity costs. Nigeria has incurred considerable losses in revenue and investment potential, particularly in the gas sector, which is three times more significant than its oil sector based on proven reserves. A decisive exit from midstream and downstream operations will empower NNPCL to address the challenges and seize the remarkable opportunities within the upstream sector.
In conclusion, NNPCL”s primary mandate should be to enhance Nigeria”s natural gas production in the face of an imminent energy transition. The time is critical for NNPCL to pivot its focus towards maximizing the nation”s substantial gas resources.
