(Ecofin Agency) - • Local producers now drive over half of Nigeria’s crude output
• Renaissance plans $15 billion investment; Seplat targets 140,000 bpd
• Firms face high costs amid sabotage, theft, and weak infrastructure

Nigeria’s new generation of local oil producers is reshaping the energy sector. As international companies such as Shell, ENI, and ExxonMobil reduce their presence, Nigerian firms are stepping in and now account for over half of the country’s crude production, up from about 40% just a few years ago.

Renaissance Africa Energy, which acquired Shell’s onshore assets, plans to raise $15 billion over five years to increase oil output and double its gas production. Seplat Energy, which took over ExxonMobil’s shallow water assets, will invest $320 million this year to reactivate 400 wells and raise production to 140,000 barrels per day. Other firms such as Green Energy and Conoil, owned by billionaire Mike Adenuga, are also expanding.

Green Energy recently launched Otakikpo, the first onshore terminal fully designed and operated by a local company. Conoil shipped a cargo of a new crude grade, Obodo, produced in the Niger Delta.

This shift aligns with the government’s strategy to strengthen local content and promote national champions in the oil sector. Many of the assets acquired from departing majors remain underdeveloped, offering room for growth, particularly in smaller fields previously abandoned due to low returns or security risks.

Still, the transition comes with significant challenges. Nigerian firms must contend with insecurity, pipeline sabotage, oil theft, community disputes, and aging infrastructure, all of which raise operating costs and test their capacity.

However, the outlook may be improving. President Bola Tinubu last week signed a decree introducing tax incentives aimed at reducing upstream operating costs, especially in onshore and shallow water zones.

To meet Nigeria’s near-term goal of producing 2 million barrels per day, local producers will need to prove they can scale operations efficiently under these difficult conditions.