Nigeria seeks to boost oil output

Nigeria aims to increase its oil production to 3 million barrels per day, but faces challenges including changes in operators, high investment needs, and limited financing for local companies involved in oil exploration and services.

PETAN highlights funding needs

The Petroleum Technology Association of Nigeria (PETAN) estimates that Nigeria will require about 6 billion dollars in drilling equipment and infrastructure to meet its production target. PETAN, which represents Nigerian-owned oil and petrochemical service companies, warns that these companies struggle to finance the purchase of necessary equipment.

Nigerian companies acquire oil assets

In late October, international oil companies Eni and TotalEnergies transferred parts of their ownership in Renaissance, an operator of onshore and shallow water oil assets, to local Nigerian firms. TotalEnergies' sale of a 10% stake in Renaissance was valued at 800 million dollars.

Recent asset transfers reshape the sector

This follows several recent transactions, including Eni’s sale of its Nigerian Agip Oil Company to Oando in August 2024 and Seplat’s acquisition of Mobil Producing Nigeria from ExxonMobil in December 2024. These deals are altering the ownership structure in Nigeria’s upstream oil sector.

Financing mechanism proposed

PETAN’s president, Wole Ogunsanya, proposed a supplier financing mechanism worth about 4.5 billion dollars. In this plan, Renaissance would guarantee loans for eligible service providers, allowing them to borrow based on revenue from contracts and repay using future income from those commitments.

Focus on long-term investments

Ogunsanya urged for a more stable investment approach less affected by short-term oil price fluctuations. He emphasized the need to maintain drilling and exploration activities to ensure long-term production goals and warned about the risk of losing skilled professionals, which could hinder the training of younger workers in the industry.