By Abubakar Ibrahim Olaye
When President Bola Ahmed Tinubu assumed office in May 2023, Nigeria’s energy sector was at a crossroads. Crude oil production had dipped below OPEC quotas, electricity generation was barely scratching 4,000 megawatts for a population of over 200 million, and foreign investors were increasingly hesitant due to regulatory bottlenecks and insecurity. Yet, just two years later, the industry tells a markedly different story, one of revival, optimism, and forward momentum.
Tinubu’s reforms, anchored in bold executive actions and legislative continuity, are reshaping how Nigeria produces, consumes, and invests in energy. From upstream oil and gas revival to electricity market stability and renewable energy expansion, his administration has sought to reposition Nigeria as a regional powerhouse capable of balancing hydrocarbon wealth with a clean-energy future.
A Reform Blueprint: From Policy to Practice
At the heart of Tinubu’s energy transformation is a coordinated reform blueprint. In 2023, his administration created a Presidential Energy Office, consolidating oversight of oil, gas, and power. The goal was clear: eliminate duplication, accelerate decision-making, and align reforms with the Petroleum Industry Act (PIA) and the Electricity Act.
By early 2024, this agenda crystallised into three Presidential Directives, 40, 41, and 42, that introduced fiscal incentives across deepwater oil and gas, midstream gas processing, and renewable energy technologies. They streamlined bureaucratic processes, reduced approval delays, and provided tax relief for critical infrastructure such as pipelines, EVs, CNG stations, and LPG plants.
“Tinubu’s reforms mark a turning point in Nigeria’s oil and gas industry,” said Sahara Group’s Group Managing Director, Kola Adesina. “For the first time, we see policies designed not just to attract investment but to ensure sustainability and competitiveness across the value chain.”
Early Gains: Capital Inflow and Rig Count Surge
The impact of these measures was almost immediate. By mid-2024, Nigeria recorded three out of four Final Investment Decisions (FIDs) announced in Africa, worth over $5 billion.
This included TotalEnergies and NNPC’s $500 million commitment to the Ubeta gas project and a $5 billion pledge by Shell, Total, ENI, and ExxonMobil to the Bonga North development, which is set to add 110,000 barrels per day.
Rising rig counts and crude production
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed that the number of operational oil rigs rose by 22% in 2025, highlighting renewed investor confidence and increased exploration activity.
This has also seen Nigeria’s average daily crude production rise to 1.507 million barrels per day in July, according to a report by the Organisation of the Petroleum Exporting Countries (OPEC). This is a 7,000-barrel-per-day increase above the quota approved for Nigeria by OPEC.
The latest oil output figures indicate that the country has sustained its crude production above the OPEC quota for the second consecutive month.
According to the OPEC Monthly Oil Market Report for July, crude output increased marginally by 2,000 bpd, from 1.505 million bpd in June to 1.507 million bpd in the following month.
According to industry insiders, this surge reflects not only improved fiscal terms but also Tinubu’s June 2025 Executive Order on Oil & Gas Reforms, which streamlined contracting timelines and reduced project delivery costs by up to 40%.
Global Investors Take Notice
Nigeria’s reform momentum has caught the eye of local and international financiers. Renaissance Africa Energy, which recently acquired Shell’s onshore assets, praised the regulatory clarity of the PIA and the Nigerian Content Development Act, saying these reforms were “de-risking” Nigeria for global capital.
So far, foreign oil majors have announced over $8 billion in new projects. ExxonMobil is investing $1.5 billion in new deepwater fields, Chevron is ramping up Agbami expansion, while Shell deepens its Bonga portfolio. Even Petrobras, which once exited Nigeria, is signalling renewed interest.
In July, President Bola Tinubu held a closed-door meeting with billionaire industrialist Aliko Dangote at the Presidential Villa in Abuja, signalling renewed collaboration between the Federal Government and the private sector on energy sector reforms.
Though details of the meeting were not made public, it comes on the heels of Tinubu’s recent tour of the 650,000-barrel-per-day Dangote Refinery and Petrochemicals complex in Lagos, and highlights his administration’s commitment to a private-sector-led approach to revamping Nigeria’s oil and gas industry.
Earlier, the President, through his official X account, addressed participants at the West African Refined Fuel Conference, reiterating Africa’s need to move beyond being passive players in global energy pricing.
“Africa can no longer be a price taker. We must set transparent benchmarks that reflect our true value and protect our economies,” Tinubu said, adding that Nigeria is working with regional partners to create a unified African energy market.
Dangote, who also delivered a paper at the conference titled Building an African Refinery Hub: Prospects and Challenges, decried the rent-seeking culture that has long plagued the petroleum value chain in Africa.
“Our biggest problem lies in rent-seeking throughout the petroleum value chain. When a refinery like ours emerges, it disrupts a deeply entrenched system and threatens powerful interests who prefer the status quo,” he noted.
Analysts say the initiative could strengthen local currency stability, reduce forex dependence, and boost local refining.
Electricity Market: Towards Stability and Growth
While oil and gas grab headlines, Tinubu’s power sector reforms are equally significant. In 2024, his administration launched the Presidential Metering Initiative, targeting five million new smart meters by 2027 with ₦700 billion in committed financing. The rollout aims to curb estimated billing, improve revenue collection, and restore trust between distribution companies and consumers.
Complementing this, the government is expanding transmission capacity and encouraging private sector participation in renewable-powered mini-grids, especially in rural communities. Under the Solar Nigeria Programme, universities, health centres, and state-owned institutions are being solarised, helping to reduce reliance on diesel generators while cutting emissions.
The Green Transition: Building Renewable Capacity
Recognising global climate commitments, Tinubu’s administration has been careful to emphasise gas as a transition fuel while scaling investments in renewables.
A landmark agreement with China Energy Engineering Corporation and the Nigerian Governors’ Forum established a joint framework to expand solar, wind, and hydropower.
The deal also created the Nigeria-China Renewable Energy Research Centre, which is expected to drive knowledge transfer and local content growth.
According to the Energy Commission of Nigeria, these projects will not only decarbonise the power sector but also stimulate manufacturing and industrial clusters dependent on stable electricity.
“The solarisation project is going to be across every state of the federation, not just Abuja alone; it is going to be done in all universities and tertiary institutions,” said Mustapha Abdullahi, Director- General, Energy Commission of Nigeria (ECN). “This hasn’t been in the news because we don’t like speaking too much; we like being in action.”
Domestic Participation and Job Creation
Tinubu’s reforms are also recalibrating the balance between International Oil Companies (IOCs) and Nigerian independents. While IOCs retreat to deepwater operations, local firms are snapping up divested onshore and shallow water assets, driving indigenous participation and knowledge transfer.
Analysts argue this is crucial for long-term resilience. “Local players are now at the forefront of production and community engagement. This is what will sustain the industry beyond the multinationals,” noted one Abuja-based energy economist.
The multiplier effects are significant: more jobs in construction, pipeline maintenance, refining, and renewables installation; more skills transfer to local engineers; and stronger value chains for service providers.
Challenges Ahead
Despite these advances, challenges remain. Crude theft in the Niger Delta continues to undermine production, while funding bottlenecks persist for renewable energy developers. Power sector liquidity shortfalls also mean that generation companies often operate below capacity.
Moreover, critics argue that subsidy removal, though fiscally prudent, has increased hardship for ordinary Nigerians through higher fuel and electricity costs. To sustain reforms, Tinubu’s government must balance macro-economic stability with social protection.
A sector on the move
Two years in, Tinubu’s reforms have given Nigeria’s energy sector a renewed sense of direction. With billions in new investments, a surge in oil rigs, expanding refining capacity, and a more ambitious renewable energy plan, Nigeria is once again positioning itself as an African energy giant.
*Culled from September Edition of PAV Magazine
