• Nigeria cuts oil contract approval periods from 36 to 6 months, unlocking major stalled projects.

• Over $16 billion in new investments mobilized since 2023, accelerating activity in upstream oil.

• Sustainable recovery hinges on consistent reforms, stable fiscal terms, and improved security.

Nigeria’s decision to slash the approval timeline for oil exploration and production contracts from three years to just six months has reignited investor enthusiasm for its oil sector. This bold reform, introduced a few months ago, was highlighted by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in local reports on June 27, underscoring its early successes in attracting capital and unblocking key projects.

The oil sector is critical for Nigeria, accounting for about 90% of the country’s export revenues. Since the start of the reform, more than $16 billion in new investments have been mobilized, according to the NUPRC. These funds are breathing life into projects that had long been stalled and creating momentum for new offshore developments.

A standout example of this turnaround was the approval in October 2024 of ExxonMobil’s $1.28 billion sale of onshore assets to Seplat Energy. After more than two years of delays, the transaction was concluded within weeks following the regulatory changes. Seplat has since announced plans to drill 400 wells in 2025, backed by a $320 million budget.

The streamlined processes have also benefited major offshore projects. In December 2024, Shell approved the $5 billion Bonga North development after acquiring an additional 12.5% stake from TotalEnergies. Meanwhile, ExxonMobil aims to make a final investment decision on the Usan field before the end of 2025, pending regulatory clearance.

The positive ripple effects extend beyond international oil majors. Local companies like Renaissance Africa Energy, which acquired Shell’s Nigerian assets, plan to invest $15 billion over five years in the Niger Delta. Other local operators, including Oando Trading and Conoil, have also launched new exploration and development activities on blocks recovered from multinationals.

According to the NUPRC, this surge in activity reflects the success of recent reforms, which have introduced clearer rules, digitized approval procedures, and faster decision-making processes. According to the regulator, the reforms have been carefully planned and executed with the goal of strengthening investor trust, increasing transparency in regulations, and making Nigeria a leading competitive hub for upstream oil in Africa.

With proven crude oil reserves of 37.28 billion barrels and natural gas reserves of 210 trillion cubic feet, Nigeria intends to capitalize on its abundant resources to raise its production, currently estimated at 1.5 million barrels per day.

However, experts caution that the lasting impact of these measures will depend on maintaining consistent implementation. Key to success will be upholding contractual timelines, ensuring a stable fiscal regime, enhancing security in oil-producing regions, and providing access to financing for both local and international players. Without these conditions, the current momentum risks stalling before it translates into a structural recovery of the sector.

Abdel-Latif Boureima