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Nigeria Oil and Gas Market Report Overview
Nigeria Oil and Gas Market at 1.44 MMT in 2025 and heading to 2.41 MMT by 2035 at a CAGR of 5.30%. The size and trajectory of the Nigeria oil and gas market is ultimately a function of three moving parts: how much crude Nigeria produces and at what price it sells, how efficiently the midstream infrastructure moves that crude and gas to processing and export, and how much refining value Nigeria captures domestically rather than exporting raw crude and reimporting refined product. The PIA 2021, the Dangote refinery, the IOC divestment programme, and the Decade of Gas initiative are all operating simultaneously on these three variables. The 5.30% CAGR reflects a market that is finally starting to capture more value from its own resources than the previous model allowed.
Key Market Trends and Insights
- In January 2025, Nigeria recorded national crude production of 1.53 million barrels per day, its first on-quota OPEC performance in years, after digital well-surveillance tools reduced unplanned downtime by 15%. A country that was chronically under-producing against its own targets finally closed the gap.
- Over USD 10 billion in new oil and gas investments were recorded by mid-2024 according to the Nigerian Upstream Petroleum Regulatory Commission, the clearest signal that the PIA 2021's fiscal and regulatory reforms are converting into actual capital commitment.
- Nigeria's oil and gas sector accounts for approximately 90% of the country's foreign exchange earnings and around 50% of the federal government budget. This is not a commodity sector. It is the fiscal foundation of the Nigerian state, which makes its performance a matter of national economic survival rather than just sector-level commercial interest.
Market Size and Forecast
- Market Size in 2025: 1.44 MMT
- Projected Market Size in 2035: 2.41 MMT
- CAGR from 2026 to 2035: 5.30%
2025
Base Year
2019-2025
Historical Period
2026-2035
Forecast Period
{IS_GRAPH}}
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| Nigeria Oil and Gas Market Report Summary | Description | Value |
| Base Year | MMT | 2025 |
| Historical Period | MMT | 2019-2025 |
| Forecast Period | MMT | 2026-2035 |
| Market Size 2025 | MMT | 1.44 |
| Market Size 2035 | MMT | 2.41 |
| CAGR 2019-2025 | Percentage | XX% |
| CAGR 2026-2035 | Percentage | 5.30% |
| CAGR 2026-2035 - Market by Type | Downstream Gas | 6.0% |
Key Trends and Recent Developments
The IOC Divestment Wave Is Transferring Nigeria's Onshore Production to Indigenous Operators - With Major Unknowns
In 2024, Nigeria saw unprecedented divestments by major IOCs like Shell, ExxonMobil, TotalEnergies, and Eni, driven by security risks, environmental liabilities, and ESG pressures tied to onshore and shallow-water assets, while retaining deepwater and LNG operations. Indigenous firms such as Seplat, Oando, and Renaissance Africa Energy are acquiring these assets, but questions remain around their ability to sustain and scale production given the capital and technical demands. Their success could shift control of Nigeria’s oil sector domestically, while failure may lead to declining output.
The Dangote Refinery Changes the Downstream Economics of the Entire Nigerian Oil Sector
Dangote’s USD 20 billion refinery, with a capacity of 650,000 bpd, is reshaping Nigeria’s downstream sector by reducing fuel import dependence and redirecting spending into the local economy. It creates new demand for domestic crude, leading to friction with IOCs used to exporting output, now reinforced by policy mandating local crude sales. Beyond petrol, the refinery produces diesel, aviation fuel, LPG, and petrochemical feedstocks, driving broader import substitution. Its full impact on supply chains, pricing, and trade patterns will unfold over time.
Gas Is Where Nigeria's Next Phase of Oil Sector Value Creation Actually Lives
Nigeria holds over 180 trillion cubic feet of gas reserves but has long struggled with flaring, limited domestic supply, and underutilisation beyond LNG exports. Recent policies under the Decade of Gas initiative and the PIA aim to reduce flaring, expand LNG capacity, and strengthen domestic supply for power and industry. Key projects like the Ajaokuta-Kaduna-Kano pipeline are building connectivity between southern gas fields and northern demand centres, while Nigeria LNG Train 7 and the NNPC-Golar FLNG deal are expanding export capacity and tapping stranded offshore gas. Gas is emerging as the primary growth driver in Nigeria’s hydrocarbon sector over the coming decade.
Oil Theft and Pipeline Vandalism Cost More Than USD 1 Billion Annually and No Sustainable Solution Has Been Found
Oil theft is a major structural risk in Nigeria, costing over USD 1 billion annually and at times cutting 400,000–500,000 bpd from production. Efforts like Tantita Security Services and joint Navy-NNPC actions have improved output and reduced vandalism, restoring some capacity. However, these gains remain fragile. Past progress has often reversed when security efforts weakened or community ties broke down. Operators now spend up to 20% of OPEX on security, a significant burden. Long-term production growth depends less on temporary fixes and more on achieving sustained control over theft and pipeline vandalism.
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Nigeria Oil and Gas Industry Segmentation
The EMR’s report titled “Nigeria Oil and Gas Market Report and Forecast 2026-2035” offers a detailed analysis of the market based on the following segments:
Market Breakup by Sector
- Upstream
- Midstream
- Downstream
Key Insight: Upstream accounts for the majority of market revenue and is also the fastest-growing segment, reflecting the high capital intensity and value of crude oil production. Ongoing IOC divestments and increased participation by indigenous players are reshaping ownership, while offshore and deepwater assets continue to dominate due to their lower security risks and stable output potential. Midstream remains the critical link between production and end use, covering pipelines, storage, and processing infrastructure. Its growth is closely tied to large-scale investments such as the AKK pipeline and gas processing networks, though years of underinvestment have created bottlenecks that still limit overall efficiency. Downstream, historically the weakest segment due to poor refinery performance and heavy reliance on imports, is now undergoing a significant shift. Developments like the Dangote Refinery and rehabilitation of existing government refineries are gradually improving domestic refining capacity and reducing import dependence, marking a structural transformation in the sector.
Downstream Oil Market Breakup by End Use
- Residential
- Industrial
- Forest and Agriculture
- Transportation
- Others
Key Insight: Transportation is the dominant end-use for downstream oil, consuming petrol and diesel through a vehicle fleet that has grown substantially with Nigeria's urbanisation and economic development. Nigeria's vehicle penetration remains well below comparable-income-level peers, meaning transportation fuel demand growth has structural runway ahead of it. Industrial consumption is the second-largest end-use, encompassing manufacturing, commercial operations, and the extensive diesel generator capacity that substitutes for grid electricity in a country with chronic power supply deficits. Residential consumption is largely kerosene for cooking in lower-income households.
Downstream Gas Market Breakup by End Use
- Power
- Fertilizer
- Industrial
- Others
Key Insight: Power is the dominant downstream gas end-use and simultaneously the sector with the most structural demand potential. Nigeria's electricity generation capacity is chronically inadequate for a country of 220 million people. Gas-to-power is the primary route through which Nigeria intends to address this deficit, and the domestic gas supply expansion under the Decade of Gas initiative is explicitly designed to support power sector gas demand growth. Fertilizer represents a significant downstream gas end-use given Nigeria's agricultural scale: the Dangote Fertilizer plant at Lekki, which uses natural gas as feedstock, is among the largest urea producers in Africa and demonstrates the industrial value-capture potential of Nigeria's gas resources. Industrial gas consumption grows with manufacturing sector development.
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Nigeria Oil and Gas Market Share
Nigeria's oil and gas market share distribution is experiencing its most significant structural shift since the sector's development began. The upstream sector's dominance at 75.2% of market revenue reflects the commodity's fundamental value hierarchy: crude oil commands more revenue per barrel than the infrastructure that moves it or the refined products derived from it, at least at current processing margin levels. That balance shifts as the Dangote refinery adds downstream refining value and as petrochemical capacity is developed.
| CAGR 2026-2035 - Market by | Type |
| Downstream Gas | 6.0% |
| Downstream Oil | XX% |
The ownership shift in upstream assets is perhaps the more commercially important change in market share dynamics over the forecast period. International oil companies collectively held the majority of Nigerian production for decades. As those assets transfer to indigenous operators through the 2024-2025 divestment wave, the revenue and profit shares flowing to Nigerian-owned entities grow substantially. This is an intended policy outcome of both the PIA and the government's stated priority of expanding indigenous participation.
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Competitive Landscape
Nigeria's oil and gas competitive landscape has undergone its most significant realignment in decades between 2022 and 2025. The IOC divestment wave, accelerated by the PIA's new fiscal framework, community conflict liabilities, and a global energy transition that makes long-cycle onshore Nigeria assets less attractive to international balance sheets, has transferred significant production assets to Nigerian hands. What remains for the IOCs is predominantly deepwater and LNG, where technical complexity, scale requirements, and offshore security advantages make foreign capital and expertise more difficult to replace.
The new competitive dynamic is between NNPC, which retains its central role as both a joint venture partner and a state enterprise with production ambitions of its own, and a growing tier of indigenous operators, led by Seplat, Oando, Aradel Holdings, and Renaissance Africa Energy, who are now managing assets at scales they have never previously controlled. Above this, foreign companies including Total Energies, Eni, Chevron, Shell, and CNOOC retain significant deepwater and LNG positions. The competitive question over the forecast period is whether the indigenous operators can execute at the scale their new asset portfolios demand.
Nigerian National Petroleum Corporation (NNPCL)
NNPC Limited is the transformed successor to the Nigerian National Petroleum Corporation, commercialised under the Petroleum Industry Act 2021 into a corporate entity that is no longer required to remit all revenue to the federation account and now operates under commercial rather than civil service governance. This transformation matters commercially: NNPC operates as both joint venture partner to IOCs in the major production sharing contracts and as an independent operator in its own right. It is simultaneously the most powerful entity in the Nigerian oil sector and the one that has most struggled operationally, carrying USD 6 billion in debt to petrol suppliers by mid-2024 and managing the politically charged fuel pricing environment. The February 2025 Caverton-Stena tanker JV and the June 2025 FLNG deal with Golar LNG both reflect NNPC's commercial transformation agenda. Whether that transformation delivers operational improvement rather than just institutional restructuring is the central question about NNPC's trajectory.
Shell Plc
Shell's Nigeria story in 2024 was primarily an exit story. The December 2024 ministerial consent for SPDC's sale to Renaissance Africa Energy concluded a process that had been building for years as Shell's onshore Niger Delta operations became increasingly difficult to justify against its global portfolio priorities. Shell retains its interests in deepwater blocks and remains a significant partner in Nigeria LNG, which is a very different risk profile from onshore operations: fewer community conflicts, no pipeline vandalism exposure, and the kind of long-cycle infrastructure investment that aligns with Shell's global LNG strategy. The onshore exit, however, removes Shell from most of the day-to-day operational complexity that had consumed disproportionate management attention and legal cost in Nigeria for decades.
Total Energies SE
Total Energies has pursued a selective Nigeria strategy: divesting onshore shallow-water interests like Shell and ExxonMobil while maintaining and investing in deepwater positions and gas. The June 2023 discovery of a gas field at OML 102 offshore Nigeria demonstrated that the company is still actively exploring in the country rather than simply managing down its position. Total Energies' commitment to Nigeria LNG and to deepwater development aligns with its global strategic emphasis on natural gas as a transition fuel. It has a stronger commercial case for staying in Nigeria than in onshore, precisely because the offshore and gas assets sit in a regulatory and security environment that doesn't carry the same operational overhead as the Niger Delta onshore blocks it has progressively exited.
Exxon Mobil Corporation
ExxonMobil's Nigeria story in 2024 was the closure of a chapter that had been open since the 1960s. The USD 1.28 billion sale of Mobil Producing Nigeria Unlimited to Seplat, finally receiving ministerial approval in October 2024 after two years of delay, transferred the onshore and shallow-water Nigerian assets that ExxonMobil had accumulated over decades to an indigenous operator. ExxonMobil retains deepwater interests, where it has invested in the Bonga and Erha fields. The onshore exit follows the same logic as Shell's: onshore Niger Delta operations carry a risk and cost profile that ExxonMobil's global capital allocation no longer justifies. For Seplat, the acquired assets represent a production base several times larger than its previous scale.
Other key players in the market include Chevron Corporation, Lekoil Nigeria Limited, Sterling Oil Exploration & Energy Production Co. Ltd., Pinnacle Oil and Gas Company Limited, CNOOC International Ltd., Eni S.p.A., and Others.
*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*
Key Findings from the Nigeria Oil and Gas Market Report
- Historical market data from 2019 to 2025 and forecasts through 2035, covering the full period from the COVID-related oil price collapse through the PIA 2021 reform cycle and into the IOC divestment and indigenous operator expansion phase.
- Sector-level analysis covering upstream, midstream, and downstream, with individual historical and forecast trends capturing the different growth trajectories, risk profiles, and competitive dynamics of each segment.
- Downstream oil end-use breakdown across residential, industrial, forest and agriculture, transportation, and others, and downstream gas end-use breakdown across power, fertilizer, industrial, and others.
- Middle East and Africa regional oil and gas overview providing the broader context in which Nigeria's market operates, including comparative production, reserves, and investment data.
- Trade dynamics analysis using HS codes 2709, 2710, and 2711, covering crude oil, refined petroleum products, and natural gas imports and exports by country in both volume and value terms.
- SWOT analysis, Porter's Five Forces, key demand indicators, and key price indicators applied to the specific Nigerian context, where political economy, security, and regulatory dynamics shape commercial outcomes more than in most comparable hydrocarbon markets.
- Company profiles for NNPC, Shell, Total Energies, ExxonMobil, Chevron, Lekoil, Sterling Oil, Pinnacle Oil and Gas, CNOOC International, and Eni.
Why Choose Expert Market Research?
- Our Nigeria oil and gas market analysis integrates geopolitical, regulatory, security, and financial dimensions in a way that technically-focused commodity reports typically don't.
- We track the events that actually move this market: the PIA implementation timeline, NNPC commercialisation progress, IOC divestment completions, production milestone achievements, and gas infrastructure project advances that together determine the market's actual trajectory.
- Clients in oil company M&A, infrastructure investment, energy trading, government advisory, and financial services rely on our Nigeria-specific intelligence to navigate a market where political and operational context is as analytically important as reserve and production data.
- Research scope is customisable across sector-specific depth, trade flow analysis, project-level tracking, or regulatory change impact assessment.
Call to Action
Unlock the latest insights with our Nigeria oil and gas market trends 2026 report. Discover regional growth patterns, consumer preferences, and key industry players. Stay ahead of competition with trusted data and expert analysis. Download your free sample report today and drive informed decisions in the market.
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Key Questions Answered in the Report
At 2025, the market reached an approximate volume of 1.44 MMT.
The market is projected to grow at a CAGR of 5.30% between 2026 and 2035.
The market reaches 2.41 MMT by 2035, supported by indigenous operator-driven upstream production recovery, the Dangote refinery's downstream import substitution impact, the Decade of Gas initiative's domestic gas supply expansion and LNG export growth, and the fiscal clarity provided by the Petroleum Industry Act 2021 that is converting into tangible investment commitments across all three sectors.
Stakeholders are investing in modular facilities, partnering with refiners, expanding gas distribution, deploying digital monitoring, securing offtake contracts, and localizing services to improving margins, reliability, and capital efficiency nationwide sustainably.
Companies face pipeline insecurity, financing gaps, regulatory transition risks, foreign exchange volatility, aging infrastructure, and rising compliance costs while maintaining production reliability and meeting domestic supply obligations amid market reforms.
The key players in the market include Nigerian National Petroleum Corporation, Exxon Mobil Corporation, Total Energies SE, Shell Plc, Chevron Corporation, Lekoil Nigeria Limited, Sterling Oil Exploration & Energy Production Co. Ltd., Pinnacle Oil and Gas Company Limited, CNOOC International Ltd., Eni S.p.A., and Others.
Report Summary
Explore our key highlights of the report and gain a concise overview of key findings, trends, and actionable insights that will empower your strategic decisions.
| REPORT FEATURES | DETAILS |
| Base Year | 2025 |
| Historical Period | 2019-2025 |
| Forecast Period | 2026-2035 |
| Scope of the Report |
Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:
|
| Breakup by Sector |
|
| Breakup by Type |
|
| Market Dynamics |
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| Competitive Landscape |
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| Companies Covered |
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