Why Investors Are Returning To Nigeria’s Energy Sector—Lokpobiri

After more than a decade of stalled projects, capital flight and investor hesitation, Nigeria’s energy sector is witnessing a decisive turnaround. Fresh investments, renewed project approvals and rising production figures are signalling a return of confidence and government officials say the change is no accident.

Speaking at the 9th Nigeria International Energy Summit (NIES 2026), the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, outlined the factors driving renewed global interest in Nigeria’s oil and gas industry, pointing to sweeping reforms that have reshaped the sector’s legal, regulatory and commercial landscape.

According to the Minister, Nigeria’s appeal to investors now goes far beyond its vast hydrocarbon reserves.

“Investment readiness,” he said, is no longer defined by geology alone, but by clarity, predictability, efficiency and alignment across policy and regulation.

For years, Nigeria’s energy sector struggled under regulatory ambiguity and inconsistent fiscal terms, leading to declining production and the absence of major Final Investment Decisions (FIDs). That tide, Lokpobiri said, began to turn with the implementation of the Petroleum Industry Act (PIA).

The PIA established a stable fiscal framework, streamlined licensing processes, strengthened regulation, protected host communities and clarified contractual terms—key conditions international investors demand before committing long-term capital.

Complementing this framework, the government introduced the Upstream Petroleum Operations (Cost Efficiency Incentives) Order 2025, which offers tax credits and cost-reduction measures aimed at improving project economics, particularly in upstream operations.

“These reforms restored confidence,” Lokpobiri said, noting that investors now operate within a transparent and predictable environment.

Beyond policy, measurable output gains have reinforced investor optimism. The launch of Project One Million Barrels in October 2024 marked a turning point. Within months, Nigeria’s crude oil production climbed to between 1.7 and 1.83 million barrels per day, reflecting an increase of about 300,000 barrels per day in mid-2025 alone.

Equally significant is the rebound in upstream activity. The number of active drilling rigs rose from just 14 in 2023 to over 60, indicating renewed operational momentum and asset optimisation.

“These are clear signs that reforms are working,” the Minister said, describing the revival of idle assets and increased field activity as proof of renewed industry confidence.

Perhaps the strongest signal to global markets has been the return of large-scale FIDs. Shell’s $5bn Bonga North project and TotalEnergies’ $550m Ubeta project marked Nigeria’s first major FIDs in over a decade.

These were followed by Shell’s $2bn HI project, Chevron’s cumulative $1.8bn Panther investment, and recent commitments pointing toward a $20bn Shell FID.

In 2025 alone, 28 new field development plans valued at $18.2bn were approved, with estimated reserves of 1.4 billion barrels.

Between 2024 and 2025, four of the seven major FIDs announced across Africa were in Nigeria, a development Lokpobiri described as the result of consistent policy execution rather than coincidence.

Another driver of renewed confidence has been the government’s facilitation of long-delayed asset divestments by International Oil Companies.

Onshore and shallow-water assets previously held by Shell, ExxonMobil and Eni have been transferred to Nigerian operators including Renaissance, Seplat and Oando.

“These were not just asset transfers,” Lokpobiri said, “they were transfers of confidence and capability.” The transition, he noted, has already added about 200,000 barrels per day to national output, while empowering indigenous firms to expand operations.

Investor interest has also been buoyed by reforms in the downstream sector. The removal of fuel subsidy and improved product availability have opened space for private investment, with companies such as Dangote and BUA committing capital to refining and midstream infrastructure.

The liberalisation of licensing processes has further improved the investment climate. According to the Minister, approvals are now based strictly on compliance and transparency, eliminating discretionary bottlenecks that previously discouraged participation.

While acknowledging global conversations around energy transition, Lokpobiri emphasised that oil and gas remain central to energy security. Citing international outlooks, he noted that the world is shifting toward an energy mix, not an abandonment of hydrocarbons.

For Africa, he argued, the priority is retaining value on the continent. With over $120bn spent annually on hydrocarbon imports, Nigeria is positioning itself as a refining and energy hub, supported by initiatives such as the West African Reference Market and the proposed African Energy Bank, headquartered in Nigeria.

Taken together, these reforms have repositioned Nigeria as a credible destination for energy capital. Policy certainty, improved production, revived project approvals, indigenous participation and downstream expansion have combined to reverse years of investor skepticism.

“The reforms are in place. The opportunities are real. The leadership is committed,” Lokpobiri said, inviting global investors to partner Nigeria not just as financiers, but as co-builders of Africa’s energy future.

ENDS