From reviving idle oil fields to assembly the two million barrels per day manufacturing goal, Bayo Ojulari, the brand new group chief govt officer of the Nigerian Nationwide Petroleum Firm (NNPC) Restricted faces a frightening array of challenges that may check his management and strategic acumen.
President Bola Tinubu on Wednesday shifted his focus to overhauling the state oil agency in a bid to maximise its contribution to the nation’s income and appeal to extra oil traders after ending expensive subsidies and twice devaluing the naira foreign money in his first 12 months in workplace.
“Ojulari’s appointment, and the broader adjustments to the NNPC board, present Tinubu tapping the most effective of Nigeria’s E&P expertise to sort out the numerous challenges on the agency, and to enhance the nation’s funding enchantment,” mentioned Clementine Wallop, director for sub-Saharan Africa at consultancy Horizon Interact informed S&P World.
“Trying on the names on the board, there’s an emphasis on gasoline and deepwater expertise; that’s aligned with the best way Worldwide Power Firms see Nigeria now, and with Tinubu’s personal vitality priorities,” Wallop mentioned.
At first look, the numbers are spectacular for traders.
NNPC is the most important oil and gasoline firm in Africa. In 2023, it reported a N3.3 trillion ($ 2.1 billion) internet revenue, with an asset base exceeding N16 trillion.
Nigeria’s oil reserves are estimated at 37 billion barrels, and NNPC has set an formidable goal of manufacturing 2 million barrels per day within the close to time period, with plans to ramp as much as 4 million barrels per day by 2030.
Learn additionally: Tinubu will get all-round applause for NNPC’s new look
At the moment, nonetheless, international oil traders don’t simply purchase barrels or manufacturing forecasts, they need extra.
Inexperienced bonds, AI unicorns, renewable infrastructure funds are all competing for restricted international capital swimming pools.
For a nationwide oil firm in 2025, the competitors isn’t simply ExxonMobil or Aramco, it’s Tesla, personal fairness funds, and sovereign wealth funds with strict ESG mandates.
To entice traders, listed below are seven key contentious points awaiting the brand new NNPC management.
Assembly Tinubu’s goal
Nigeria beneath Tinubu goals to spice up its oil and gasoline output, focusing on 2 million barrels per day of oil and eight billion normal cubic toes per day of gasoline by 2027, with additional ambitions to succeed in 3 million barrels per day and 10 billion normal cubic toes per day by 2030.
Tinubu has additionally tasked the brand new Ojulari-led NNPC with elevating the corporate’s oil refining output to 200,000 barrels per day by 2027, and 500,000 barrels per day by 2030, regardless of its underperforming refineries.
The Nigerian authorities is relying on oil to assist shore up the battered naira, and business operators mentioned it should decisively ramp up oil manufacturing to 2 million barrels per day (bpd) constantly to realize that goal.
The nation’s oil and gasoline sector, which has generated a major chunk of presidency income and overseas alternate earnings for a few years, is teetering and in determined want of rescue.
Olusegun Omisakin, director of analysis and chief economist on the Nigeria Financial Summit Group, mentioned Nigeria can’t get higher when crude oil manufacturing is under two million barrels every day.
“We’re barely touching what we have now, you understand. For some years now and at present, we’re doing under two million barrels of oil manufacturing per day. We can not proceed to dream of a greater nation once we don’t know the right way to optimise our nationwide assets,” Omisakin mentioned at a quarterly macro-economic outlook webinar monitored by BusinessDay.
Safety for oil property, many analysts say, has not been handled with the seriousness it deserves, contemplating that oil is liable for the nation’s income. Militants routinely kidnap oil employees, particularly expatriates, and sabotage of oil pipelines happens too ceaselessly to absolve authorities officers, together with safety personnel, of collusion with criminals.
Learn additionally: Technocrats reign in NNPC’s board new look
Refineries: Revamp, concession, or scrap?
NNPC’s promise to revive the nation’s moribund refineries stays unfulfilled. The Port Harcourt, Warri, and Kaduna refineries have gulped billions in repairs however are but to function at full capability.
The refineries’ lengthy historical past of decay and wasteful spending on turnaround upkeep has triggered an elevated feeling of bitterness within the hearts of many Nigerians at any time when they hear billions of {dollars} the refinery has sucked.
They query why the federal government retains throwing cash right into a system that’s entrenched in a tradition of waste that has gulped far an excessive amount of public funds whereas its inflated payrolls contribute to the non-competitive value of fuels produced.
With the Dangote Refinery now operational, stress is mounting on NNPC to ship on its refinery rehabilitation pledges or face criticism over continued gasoline import dependence.
AKK gasoline pipeline venture delays
The $2.8 billion Ajaokuta-Kaduna-Kano (AKK) gasoline pipeline, a important infrastructure venture designed to spice up home gasoline provide and industrial development, has confronted repeated delays.
The AKK gasoline pipeline venture runs from Ajaokuta in Kogi State to Kano, delivering gasoline to main cities like Abuja and Kaduna alongside the route; it’s thought-about a key venture to spice up Nigeria’s industrialization by offering gasoline for energy technology, industries, and residential use.
Development of the Ajaokuta-Kaduna-Kano (AKK) pipeline started in June 2020, with NNPC promising it could assist generate 3.6 gigawatt of energy and assist gas-based industries alongside the route when accomplished.
BusinessDay findings confirmed funding constraints and contractual disputes have slowed progress regardless of the AKK venture being a precedence for the federal authorities.
Learn additionally: Right here’s what to find out about NNPC’s new board chairman
Idle oil blocs & under-utilised property
Regardless of Nigeria sitting atop 36 billion barrels of crude oil reserves and 206 trillion cubic toes of confirmed gasoline reserves, Nigeria has many income issues, and one in every of its most infamous points is unproductive oil blocs.
The difficulty isn’t a straightforward one to grasp as a result of it has a number of layers with many various sides.
Quite a few oil blocs stay underdeveloped on account of regulatory bottlenecks, funding gaps, and investor apathy.
Oil receipts fund the nation’s price range, however many oil and gasoline tasks lie idle, threatening the goal set over a decade in the past to lift reserves to 40 billion barrels.
These big-ticket tasks embrace: Zabazaba’s 150,000 bpd; Chevron Nsiko venture,100,000 bpd; Exxonmobil’s Bosi, 140,000 bpd; Satellite tv for pc Area improvement part, 80,000 bpd; and Ude, 110,000 bpd.
Specialists mentioned Ojulari should tackle the inefficiencies in licensing and appeal to competent gamers to unlock these assets as failure to take action might additional stifle manufacturing development amid declining output in key fields.
NNPC’s long-awaited IPO
The deliberate preliminary public providing (IPO) for NNPC Restricted, meant to rework the state oil agency right into a extra commercially viable entity, has stalled.
Transparency issues, weak monetary efficiency, and risky oil costs have deterred traders.
“Buyers are usually not lining as much as purchase yesterday’s oil narrative. They’re shopping for what’s subsequent; vitality transition readiness, downstream integration, gasoline infrastructure dominance, regional management in vitality provide,” a senior govt in upstream enterprise informed BusinessDay.
He added, “NNPC’s pitch should transfer past crude oil barrels. It should articulate a strategic future, one which speaks to how this IPO positions NNPC as an indispensable participant in Africa’s vitality safety and transition. When Aramco went public, it offered itself not simply because the world’s largest oil firm, however as a modernised, tech-enabled, future-facing vitality powerhouse.”
Learn additionally: Austin Avuru, Musa-Kida be a part of NNPC’s board as Tinubu reshuffles
Attracting International Direct Funding (FDI)
When an oil govt mentioned Nigeria wanted $25 billion each year in investments to have the ability to obtain a manufacturing goal of two million barrels every day, the duty at hand for Nigeria got here into higher perspective.
The 2010s witnessed a interval of great FDI from worldwide firms wanting to faucet into the nation’s huge oil and gasoline reserves as the long run for Nigeria’s nascent indigenous upstream oil and gasoline business seemed vibrant, nearly dazzlingly so.
In 2014, Nigeria attracted the most important quantity of FDI of any African nation, with inflows exceeding $22.1 billion. This inflow of capital fueled main tasks, together with deepwater exploration and improvement of latest oil fields.
Ojulari should work with regulators to create a extra investor-friendly local weather, making certain Nigeria stays aggressive in opposition to rivals like Angola and Namibia, that are drawing main oil investments.
Naira for crude deal
There may be nervousness within the downstream arm of the oil and gasoline sector as operators await the choice of the Federal Authorities on the naira-for-crude deal between the NNPC and the Dangote Petroleum Refinery.
The six-month deal, which began in October 2024, ended March 31, 2025. The deal’s extension or full halt continues to be being mentioned by the events concerned.
It was gathered on Wednesday, nonetheless, that the committee liable for the negotiations has but to resolve the matter. As this lingers, the impact is now felt within the pump costs of refined petroleum merchandise.
