FG admits oil demand from US, Europe, Middle East outstrips supply

… races to expand oil, gas capacity as global buyers seek more crude

…industry warns country cannot afford to miss next geopolitical windfall

…Oil firms decry multiple taxes, seek PIA review as Nigeria joins IEA

The Federal Government on Tuesday admitted that Nigeria is struggling to meet growing international demand for its crude oil despite recent gains in production, as industry leaders warned that the country risks missing future geopolitical windfalls unless it rapidly expands production capacity, gas infrastructure and domestic industrialisation.

Speaking at the opening of the 25th Nigerian Oil and Gas (NOG) Energy Week in Abuja, Heineken Lokpobiri, the Minister of State for Petroleum Resources (Oil), disclosed that countries across the United States, Europe and the Middle East have approached Nigeria seeking crude supplies amid continuing global energy market disruptions.

Lokpobiri said, “I receive delegations from across the world, the USA, Europe, and the Middle East. Everybody comes to me. They want to do business with Nigeria. They want to buy Nigerian oil.”

“Unfortunately, we don’t have enough to sell to them. But I promise them that in the next few years, Nigeria will increase production so we can meet some of those obligations.”

The disclosure comes as geopolitical tensions in the Middle East and shifting global energy supply chains continue to reshape international crude markets, creating fresh opportunities for major oil-producing countries.

Although Nigeria has increased crude production from around one million barrels per day in 2023 to more than 1.8 million barrels daily, including condensates, government officials and industry executives said current output remains insufficient to maximise periods of elevated global demand.

Lokpobiri said the administration is targeting even higher production.

“I’ve also told them that 1.8 million barrels is not enough,” he said.

“They say I’m too ambitious, but we’ve done 2.5 million barrels before. We can do it again. What we need is sustained investment.”

According to the minister, one of the clearest indicators of renewed confidence in the sector is the sharp increase in drilling activity.

“When we came into office in 2023, active rigs were about 14. Today we have over 60 active rigs. That is what will guarantee future growth because this is where the new barrels will come from.”

Read also: Nigeria’s oil producers say 270 levies threaten investment revival

The minister attributed the turnaround to reforms introduced by the Tinubu administration, including approvals for major divestments that transferred onshore assets from international oil companies to indigenous operators.

“Today, independents account for over 60 percent of our daily production,” he said.

“When those decisions were taken, many people doubted whether Nigerian companies had the capacity. Today, the results speak for themselves.”

However, industry operators warned that Nigeria’s inability to quickly expand production during periods of global supply disruption continues to cost the country significant export earnings.

Adegbite Falade, the Chairman of the Independent Petroleum Producers Group (IPPG), said Nigeria failed to fully benefit from both the Russia-Ukraine conflict and the recent Middle East crisis because production capacity remained constrained.

“The lesson from both crises is the same,” Falade said.

“The next geopolitical shock is not a question of if, but when.”

He added, “We must see infrastructure not just as an economic asset but as a strategic national shield. We must build the partnerships, capital and readiness today that enable us to seize tomorrow’s opportunity rather than watch it pass us by once again.”

Falade noted that while reforms under the Petroleum Industry Act (PIA) and subsequent presidential executive orders have restored investor confidence, rising operating costs threaten to undermine those gains.

According to him, upstream operators currently contend with more than 270 different taxes, statutory charges and levies imposed by various government agencies.

“Today, the Nigerian oil and gas industry remains the most taxed and levied in the country, and perhaps globally,” he said.

“For smaller producers and operators of mature assets with thinner margins, this burden is a direct threat to project viability, investment decisions and, in some cases, asset abandonment.”

Responding to the concerns, Lokpobiri said the Federal Government has commissioned PwC to benchmark Nigeria’s fiscal regime against competing petroleum jurisdictions.

“Our attention was drawn to this issue,” he said.

“We have directed PwC to carry out a global benchmarking. Nigeria has committed to becoming globally competitive, and we intend to resolve this issue.”

The conference also highlighted government’s renewed push to position natural gas as the backbone of Nigeria’s industrial transformation.

Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), said Nigeria’s ambition has moved beyond exporting gas to building an economy powered by the resource.

“We are moving from a nation that simply possesses gas to a nation that is entirely powered by gas,” Ekpo said.

“Our message to the global investment community is unified and resolute: Nigeria is open for business and we have established a stable, competitive and highly predictable investment environment.”

He cited progress on the OB3 and Ajaokuta-Kaduna-Kano gas pipelines, expansion of NLNG Train 7, the Presidential Compressed Natural Gas Initiative and the Decade of Gas programme as key projects expected to increase domestic gas utilisation while strengthening Nigeria’s export capacity.

Ekpo also described Nigeria’s recent admission into the International Energy Agency (IEA) as an Association Country, the first by any OPEC member, as a significant endorsement of the country’s ongoing energy reforms.

“That reflects growing international confidence in Nigeria’s technical expertise and policy direction,” he said.

Adding another dimension to the debate, John Enoh, the Minister of State for Industry, Trade and Investment, argued that higher oil and gas production alone would not guarantee economic transformation.

“Reliable energy is the entry point,” Enoh said.

“What makes us take a seat and maintain that seat is the value that we add.”

He said Nigeria’s newly launched Industrial Policy seeks to channel more gas into fertiliser, petrochemicals, manufacturing and industrial parks rather than relying predominantly on exports.

“It is not how much energy Africa exports,” he said.

“It is how much it transforms at home.”

Earlier, Bayo Ojulari, Chief Executive Officer, NNPCLsaid Nigeria and other African countries must move beyond simply possessing vast hydrocarbon resources to building the partnerships needed to transform them into sustainable economic growth.

Ojulari argued that Africa’s biggest energy challenge was no longer resource availability but the inability of governments, investors and institutions to work together effectively.

“The defining challenge facing Africa today is not a shortage of hydrocarbons; it is not a shortage of talent, and it is not a shortage of opportunity.

“It is the persistent fragmentation of the ecosystem required to convert resources into prosperity,” he said.

According to him, recent geopolitical tensions in the Middle East, disruptions to global shipping routes and changing energy supply chains have reinforced the need for resilient partnerships across the sector.

“The winners of the next energy era will not necessarily be those with the largest reserves,” Ojulari said.

“They will be those who can build the most effective partnerships and the most resilient ecosystems around those reserves.”

He noted that while Africa holds about 17 per cent of global natural gas reserves and abundant renewable energy resources, the continent continues to attract only a fraction of global energy investment.

Ojulari called for stronger collaboration among governments, national oil companies, indigenous producers, international oil companies, financiers, regulators, technology providers and research institutions, saying NNPC’s production growth, gas monetisation, refining projects and energy transition plans all depend on strategic partnerships.

“We increasingly view NNPC Limited not merely as an energy producer but as an ecosystem builder, connecting capital, technology, policy, talent and markets to create lasting value for Nigeria and Africa,” he said.