Nigeria’s upstream petroleum sector exhibits significant potential for growth, despite facing challenges that hinder optimal crude oil production. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has confirmed a technical production capacity of 2.24 million barrels per day (mbpd), considerably higher than the current production rate of 1.75 mbpd. This discrepancy highlights the untapped potential within the sector, attributed to factors such as underutilization of advanced oil recovery technologies, high operational costs, and entry barriers that discourage investment and innovation. The NUPRC, recognizing this potential, is actively implementing strategic initiatives to bridge the gap and maximize production output. These initiatives include enhancing transparency in operations, fostering collaboration between regulatory bodies and exploration and production companies, and ensuring the financial viability of projects to attract investment.
A central focus of the NUPRC’s strategy revolves around promoting the adoption of cutting-edge technologies for enhanced oil recovery. By embracing innovative solutions, the commission aims to optimize production processes and unlock the full potential of existing oil fields. Furthermore, the commission is working to streamline operations and reduce costs, thereby making the sector more attractive to investors and facilitating the entry of new players. Addressing the issue of crude oil theft is another crucial aspect of the NUPRC’s agenda. Through measures such as the Advanced Cargo Declaration Solution and engineering audits of upstream measurement equipment, the commission seeks to minimize revenue leakage and ensure that the country benefits fully from its petroleum resources. These comprehensive efforts reflect a commitment to maximizing production efficiency and creating a more sustainable and profitable upstream petroleum sector.
The importance of the oil and gas industry to the Nigerian economy cannot be overstated. It serves as the primary source of foreign exchange earnings, contributing 95%, and provides 70% of government revenue. Consequently, the sector plays a pivotal role in national development and economic stability. The NUPRC emphasizes the need for a transparent and forward-looking regulatory framework to sustain Nigeria’s position as a key player in the global energy market. The commission’s focus on achieving regulatory efficacy underlines its commitment to creating an enabling environment for growth and investment in the upstream petroleum sector. This approach is crucial for attracting foreign investment, promoting technological advancement, and ensuring the long-term sustainability of the industry.
Over the past year, Nigeria has witnessed encouraging progress in its upstream petroleum sector. Oil reserves have increased by 1.43%, reaching 37.5 billion barrels, while gas reserves have grown by 0.21% to 209.26 trillion cubic feet. The country’s rig count, a key indicator of exploration and production activity, has significantly increased from eight in 2021 to 40 in 2025, with projections indicating a further rise to 50 rigs in the near future. These positive trends reflect the impact of the NUPRC’s strategic initiatives and the growing confidence of investors in the Nigerian petroleum industry. Furthermore, crude oil production has seen a substantial increase of 70%, rising from 1 mbpd in 2021 to the current level of 1.75 mbpd. This growth trajectory underscores the effectiveness of the commission’s efforts to boost production and optimize resource utilization.
The NUPRC has set ambitious targets for future growth, aiming to reach 40 billion barrels of oil and 220 trillion cubic feet of gas reserves. To achieve these goals, the commission is actively stimulating exploration activities and accelerating field development. The successful completion of the 2022/2024 bid licensing round, which resulted in the award of 27 Petroleum Prospecting Licenses (PPLs) across various terrains, demonstrates the commission’s commitment to attracting investment and expanding exploration efforts. This approach ensures continuous resource discovery and development, contributing to long-term energy security and economic growth. The NUPRC’s adoption of an annual licensing round framework, supported by high-quality geological and geophysical data, further strengthens its proactive approach to resource management and development. This strategic initiative streamlines the licensing process, providing investors with clear and consistent opportunities to participate in the Nigerian petroleum sector. By ensuring the availability of reliable data, the commission enhances transparency and facilitates informed investment decisions, promoting sustainable and responsible resource development.
Beyond boosting exploration and production, the NUPRC is dedicated to implementing innovative regulations to improve operational efficiency and address critical challenges. These regulations encompass various aspects of the upstream sector, including hydrocarbon measurement, crude oil theft prevention, and hydrocarbon accounting practices. By strengthening these regulatory frameworks, the commission aims to create a more transparent, accountable, and sustainable industry. The Nigeria Gas Flare Commercialisation Programme, another key initiative, is projected to attract approximately $2.5 billion in investments, generating substantial revenue and creating numerous job opportunities. This program not only contributes to environmental sustainability by reducing gas flaring but also unlocks economic value from previously wasted resources. Through these multifaceted efforts, the NUPRC is working towards creating a robust, efficient, and sustainable upstream petroleum sector that contributes significantly to Nigeria’s economic growth and development.
