Oil and Gas: Industry leaders back reforms, local content

Nigeria’s oil and gas leaders have identified policy stability, investment incentives and stronger local content implementation as key drivers of renewed industry growth.

The News Agency of Nigeria reports they spoke on Tuesday in Lagos during a panel session at the ongoing Society of Petroleum Engineers (SPE) conference.

The panel, titled “Policy in Practice: Aligning Fiscal Strategy, Foreign Investment and Local Content for Sustainable Growth in Nigeria”, examined industry reforms and investment prospects.

Executives from Chevron Nigeria, TotalEnergies, NNPC Engineering and Technical Company (NETCO) and Heirs Energies said recent reforms have created fresh opportunities.

They, however, stressed that sustained growth would depend on stronger indigenous participation, capacity development and industry collaboration.

‘Developing local capacity is a journey’

Olusoga Oduselu, general manager, Policy, Government and Public Affairs, Chevron Nigeria, described sound policies as critical to industry advancement.

“Sound policy frameworks are the foundation upon which engineering, production and technological advancement thrive,” he said.

Mr Oduselu said Chevron had promoted local content development for more than six decades before Nigeria enacted its local content legislation.

He said the company’s goal had always been to grow investments while strengthening Nigeria’s industrial and engineering capabilities.

He said local content should be viewed as a strategy for building globally competitive Nigerian companies rather than mere domestication.

Mr Oduselu cited the Sonam Project, in which Chevron partnered with NigerDock and Hyundai Heavy Industries to execute fabrication and integration activities in Nigeria.

He said Nigerian engineering firms also participated in detailed engineering work on the project.

He also highlighted the Agbami project, where Chevron supported indigenous firms, including Marine Platforms, through financing and technical partnerships.

He noted that many firms nurtured by Chevron now execute major projects and provide services across the industry.

“Developing local capacity is a journey. It comes with costs, but many companies we supported now deliver projects across the industry,” Mr Oduselu said.

Remarks by a TotalEnergies official

Victor Bamidele, deputy managing director, Deepwater District, TotalEnergies, said reforms had ushered in a new investment phase for Nigeria’s energy sector.

He noted that improved fiscal incentives had encouraged operators to sanction major gas and deepwater investments after years of inactivity.

Mr Bamidele said TotalEnergies approved the Ubeta project in 2024, describing it as one of the country’s strongest local content projects.

He said production from the project was expected to commence next year.

According to him, the company is also nearing a Final Investment Decision on the Ima project, with first oil targeted for 2028.

Mr Bamidele said TotalEnergies was advancing the Preowei project and resuming exploration activities.

He disclosed that one exploration well would be drilled this year, while two additional deepwater wells were planned for 2027.

“There is no way to develop these projects without local participation profitably.

“The quality that Nigerian companies bring will determine the profitability of many of these projects,” he said.

Indigenous firms urged to strengthen capacity and financing

NETCO Managing Director, Salahuddeen Tahir, described the industry’s outlook as one of the most promising in recent years.

He attributed the momentum largely to presidential executive orders introduced in February 2024.

Mr Tahir said NETCO had promoted Nigerian content for nearly four decades and urged indigenous firms to strengthen capacity and financing.

He stressed the importance of adopting technology and collaborating among local engineering companies.

According to him, no single company may possess sufficient capacity to execute the expected volume of projects.

He urged local firms to establish strategic partnerships capable of delivering projects efficiently and boosting investor confidence.

“The opportunities are here. We need the people, capital, technology and capability to deliver.

“When local companies consistently execute projects successfully, investors will continue to invest,” Mr Tahir said.

Thumbs up for indigenous operators

Osa Igiehon, managing director and CEO of Heirs Energies, said indigenous operators had transformed Nigeria’s oil and gas industry.

He attributed the progress to policy reforms, improved security and stronger indigenous participation.

Mr Igiehon said crude production fell from about 2.2 million barrels per day in 2020 to around 700,000 barrels per day in 2022.

He said production had since recovered to between 1.7 million and 1.8 million barrels per day.

According to him, indigenous operators now account for more than 60 per cent of Nigeria’s oil production.

He said the figure stood between 20 and 30 per cent before the COVID-19 pandemic.

Mr Igiehon said Heirs Energies increased production from 25,000 barrels per day in 2021 to more than 55,000 barrels per day.

He added that the company also doubled gas production using a fully Nigerian workforce and largely indigenous contractors.

According to him, fiscal reforms, regulatory clarity, community engagement and improved pipeline security enhanced operational stability.

He said terminal delivery performance had improved from three per cent at acquisition to between 95 and 100 per cent.

READ ALSO: NNPC posts ₦535 billion profit, records 1.72 million barrels daily oil output in June

Looking ahead to Nigeria’s target of producing 3 million barrels of oil daily by 2030, Mr Igiehon called for stronger indigenous service companies.

He advocated consolidation among local firms, improved access to financing, and accelerated industrialisation.

Mr Igiehon said, “We have demonstrated what indigenous operators can achieve.

“The next challenge is building indigenous service companies with the scale, funding and manufacturing capacity to support future growth.”