Indigenous oil producers now account for more than 60 per cent of the country’s total crude oil production.
This marks one of the biggest structural shifts in the history of the petroleum industry as local operators take control of assets previously dominated by international oil companies (IOCs).
The transformation, driven by divestments, regulatory reforms and improvements in pipeline security, has also coincided with a recovery in national production, which climbed from about 700,000 barrels per day (bpd) in 2022 to approximately 1.7 million bpd.
Speaking at the 49th Nigeria Annual International Conference and Exhibition (NAICE) organised by the Society of Petroleum Engineers, Nigeria Council in Lagos, Chief Executive Officer of Heirs Energies, Osayande Igiehon, said indigenous operators had become the driving force behind the country’s ambition to raise crude production to three million bpd by the end of the decade.
According to him, local companies accounted for only about 20 to 30 per cent of production before the COVID-19 pandemic but have since emerged as the dominant players in the sector.
He cited the performance of Heirs Energies, which assumed operational control of its assets in 2021 with production of 25,000 bpd but has since more than doubled output.
The company is also producing more than 100 million standard cubic feet of gas per day and has doubled both oil and gas output within five years.
Igiehon attributed the gains to improvements in security, fiscal reforms introduced under the Petroleum Industry Act (PIA), stronger engagement with host communities and increased participation by indigenous companies throughout the value chain.
According to him, the transformation in pipeline security has been particularly significant.
“When we came in during 2021, only three per cent of our production reached the export terminal. Today, we deliver between 95 and 100 per cent of production to the terminal,” he said.
He identified inadequate scale within the oilfield services segment as one of the biggest obstacles to future growth, arguing that many local service companies remained too fragmented to undertake large-scale projects. Igiehon called for strategic consolidation, stronger financing arrangements and broader industrialisation to build a more competitive domestic service industry.
He also stressed the need for increased collaboration among indigenous operators as they assumed greater responsibility for national production.
The Managing Director and Chief Executive Officer of Midwestern Oil and Gas Company, Elozino Olaniyan, said shared infrastructure had become increasingly important in reducing operating costs and improving profitability.
According to her, Midwestern and several operators within its operating area had adopted a cluster model that enabled companies to share risks and infrastructure. Olaniyan urged operators to collaborate on crude evacuation, gas transportation, water disposal and other shared facilities to reduce operating expenses.
Igiehon said: “The country is in transition, and the industry is in transition as well. A great deal of collaboration has already taken place, but much more will be required if Nigeria is to achieve its long-term production ambitions,” she said.