Local Companies now Produce Most of Nigeria’s Oil After 70 years

Recent industry reports and figures linked to regulators show that Nigerian-owned oil and gas companies and other local producers now make more than half of Nigeria’s total oil and gas output. 

This is a big turning point because Nigeria has produced oil for about 70 years, yet local companies did not control this much output before.

What caused the change: foreign companies are selling assets

This change is not because foreign oil companies no longer know how to produce oil. The main reason is that many now perceive Nigeria as more difficult and risky to operate in, particularly for certain types of oil fields.

In recent years, many international oil companies have been selling their onshore and shallow-water oil assets. These are areas that often face problems such as oil theft, pipeline damage, protracted community disputes, outdated equipment, and heavy pressure from regulatory and security constraints. As foreign firms sell, Nigerian companies are taking over. But they are not only taking over the benefits. They are also taking over the difficult problems that come with these assets.

What the production numbers show: about 200,000 barrels per day

A clear sign that local firms are now playing a larger role is the volume of oil produced from assets sold by foreign companies. Reports say these sold assets are producing about 200,000 barrels per day under the new local owners. This is oil that has been brought back, kept steady, or increased after the asset sales.

This number matters because Nigeria has struggled with unstable oil output for years. Oil money is still very important for government income and foreign exchange. So when output rises or falls, it affects the country’s budget plans, the value of the naira, and how investors see Nigeria.

The Renaissance example: output reportedly doubled

One major takeover people are watching is the old Shell onshore assets now operated by Renaissance Africa Energy Company Ltd.

Reports say Renaissance has increased output by 100 percent. That means production has doubled compared to what it was when the company took over. Other reports on the same trend also point to big improvements after these assets changed hands, linked to new spending, repairs, and stronger day to day operations.

This shows the new reality in Nigeria’s oil business. If a company can keep assets safe, keep equipment working, and keep oil moving through pipelines and export routes, it can increase production quickly. In a country where disruptions are common, even basic stability can lead to big gains.

Why local firms are gaining more control

This is not a story that local companies are always better. It is mainly a story of who is ready to deal with Nigeria’s tough operating environment.

Many Nigerian firms are more willing to handle the daily challenges of working in the oil sector, such as community issues, local politics, and security planning. For many of them, Nigeria is not one project among many around the world. Nigeria is the main focus.

Local firms also tend to work harder to get value from older fields and smaller assets that foreign companies had already reduced attention on. They may also fit better into local content rules, which can make hiring, contracting, and working with local partners easier.

Some industry voices also say reforms linked to the Petroleum Industry Act have helped to make rules clearer and encouraged new investment, although results still depend on how well the rules are enforced.

Funding is starting to follow the new owners

One big challenge for Nigerian oil companies has always been money. Oil operations need serious capital for drilling, maintenance, security, and exports. Banks and investors usually only support plans they believe can generate steady returns.

But financing is starting to follow the new ownership structure. One example reported is Aradel Energy Ltd getting a 250 million dollar facility arranged by Standard Bank. This suggests that more lenders are willing to fund Nigerian energy firms, especially those expanding through major asset purchases and production growth.