Indigenous oil and gas companies have increased their presence in Nigeria’s upstream petroleum industry, with local operators now responsible for more than half of the country’s crude oil output, according to the Federal Government.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, disclosed the development on Wednesday, September 30, 2026, during the maiden Petroleum Technology Development Fund Journal Summit in Abuja.
Represented at the event by his Technical Adviser, Emmanuel Sinime, the minister said the growing role of Nigerian-owned companies was partly linked to recent divestment deals involving international oil companies.
According to him, the transactions have opened additional opportunities for domestic operators to take a larger role in exploration and production activities.
Nigeria’s Oil Output Rises
Lokpobiri also highlighted an increase in Nigeria’s crude production in recent years.
He said average output, which stood at around one million barrels per day in 2023, had climbed to more than 1.7 million barrels per day.
The number of active drilling rigs has also increased significantly, moving from approximately 14 in 2023 to more than 60, according to the minister.
He further disclosed that Nigeria had attracted more than $10 billion in foreign direct investment in recent years.
The government sees the increased participation of indigenous companies as an important development for the country’s petroleum industry, particularly as international oil companies continue to restructure their portfolios and sell some assets.
More Investment Needed Across Oil Sector
Despite the increase in production, Lokpobiri said higher crude output alone would not be sufficient to deliver maximum value from Nigeria’s petroleum resources.
He stressed the need for improved infrastructure covering crude transportation, storage and processing.
According to the minister, the country also needs greater refining capacity and a competitive petroleum market that can benefit consumers while providing an attractive environment for investors.
The emergence of the Dangote Petroleum Refinery and the expansion of modular refineries were cited as examples of increasing private-sector involvement in Nigeria’s downstream petroleum industry.
Among the modular facilities mentioned were Waltersmith and Aradel, which have added to the country’s domestic refining capacity.
Government Pushes Gas Development
The government also highlighted natural gas as a major area for future investment.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said private capital, technical knowledge and innovation would be essential to unlocking the country’s vast gas resources.
He said the government was working to create conditions that would encourage investors to participate throughout the petroleum value chain.
Ekpo pointed to the Petroleum Industry Act as an important framework for improving regulatory certainty and strengthening governance within the industry.
He also referenced the government’s Decade of Gas programme, which seeks to expand the use of natural gas and support the development of a more industrialised Nigerian economy.
Infrastructure Remains a Challenge
According to Ekpo, achieving Nigeria’s gas ambitions will require sustained investment in processing plants, pipelines, transportation networks and distribution infrastructure.
He identified several obstacles that could affect investment, including infrastructure shortages, expensive financing, project-development risks, regulatory challenges and inadequate access to reliable energy infrastructure.
He also called for greater development of Nigerian technical expertise, local manufacturing and specialised skills that can support the petroleum industry.
The minister stressed that government could not finance and execute the required transformation alone, making cooperation between public institutions, private investors, financial organisations and technology providers necessary.
PTDF Seeks Stronger Industry-Research Links
The PTDF summit also focused on the relationship between research institutions and the petroleum industry.
PTDF Executive Secretary Shuaibu Aliyu said the organisation wanted its research activities to move beyond academic publication and contribute directly to solving practical problems in the oil and gas sector.
He called for stronger partnerships between universities, researchers and industry players, particularly in areas such as technology development, financing, infrastructure and technical capacity.
Oladapo Filani, Managing Director of Waltersmith Petroman Oil Limited, similarly identified infrastructure, financing, commercial viability and investment uncertainty among the major challenges facing the midstream and downstream segments.
He also pointed to crude theft, pipeline vandalism and infrastructure integrity problems as issues that continue to disrupt petroleum operations.
Indigenous Participation Enters New Phase
The growing share of crude production attributed to indigenous operators marks a significant shift in Nigeria’s petroleum industry.
The development comes as the sector undergoes restructuring, with international oil companies completing major asset divestments and Nigerian businesses taking greater control of upstream operations.
However, maintaining higher production levels will depend on the country’s ability to improve transportation networks, storage, refining capacity and other supporting infrastructure.
The government is also betting on increased gas investment and domestic technical expertise to broaden the economic benefits of the petroleum sector.
With local operators now accounting for more than 50 per cent of crude production, the next challenge will be ensuring that increased Nigerian participation translates into stronger investment, employment, technology development and sustainable growth across the wider oil and gas value chain.
