Uche Cecil Izuora
Despite Nigeria’s sweet light crude grades attractiveness in the international markets which is attracting investor interest in the country’s oil and gas industry, institutional, legal and commercial bottlenecks in the upstream sector remain largely unresolved, despite a series of executive directives aimed at improving the operating environment.
The managing partner at energy advisory firm Dairy Hills, Kelvin Emmanuel, made the observation in a television interview anchored by CNBC.
The comment follows June 12 deadline for the submission of technical and commercial bids by prequalified applicants in the country’s 2025 oil licensing round, as announced by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The timeline underscores the Commission’s push to accelerate investment into the oil and gas sector even as structural challenges continue to weigh on output growth.
The Commission’s timeline comes at a moment of renewed policy urgency in Africa’s largest crude producer, where authorities are seeking to attract fresh capital into upstream assets and lift production closer to official targets.
The licensing process also comes alongside expectations for another bid round as early as the third quarter, suggesting the government is trying to maintain momentum in opening acreage to investors.
Emmanuel,noted that the previous licensing round, held in December, offered roughly 50 blocks across onshore and shallow-water terrain. Launching another round within a short interval, he said, reflects an effort to capitalize on global supply tightness and position Nigeria as a more important source of crude.
According to Emmanuel, geopolitical tensions in the Middle East and persistent gaps between crude supply and demand have increased the strategic value of producers such as Nigeria.
He added that Nigeria’s sweet light crude grades remain attractive in international markets, helping explain the expected investor interest.
Still, he warned that licensing activity alone will not resolve the deeper issues that have historically deterred long-term capital.
He said the packed schedule of bid rounds signals a clear government intention to speed up upstream investment.
He pointed to crude theft, weak metering systems, and the absence of a credible hydrocarbon accounting framework as major impediments.
In his assessment, Nigeria still lacks reliable end-to-end measurement of how much crude is produced at the wellhead, transported to terminals and ultimately exported. That gap, he argued, leaves both investors and policymakers without the level of transparency needed to build confidence in the sector.
He also said the country’s fiscal and commercial terms remain less competitive than those of emerging oil jurisdictions such as Guyana, which has rapidly ramped up production in recent years. In Emmanuel’s view, unless those underlying constraints are addressed, fresh bid rounds may generate interest but will not by themselves unlock the scale of investment needed to transform output.
The comments come as officials continue to project higher oil production targets. State oil company NNPC has spoken of a 2 million barrels-per-day objective, while Nigeria’s Minister of State for Petroleum Resources has referenced a 2.5 million barrels-per-day ambition.
Emmanuel challenged those figures, arguing that headline production claims may be overstated when measured against sustained monthly averages. He said Nigeria’s actual crude output, net of condensates, is closer to around 1.47 million to 1.5 million barrels per day, rather than the 1.8 million to 1.9 million barrels per day sometimes cited by officials.
He further argued that Nigeria still struggles to account accurately for field condensates, which form a meaningful share of total hydrocarbon output. In his view, stronger measurement and accounting systems will be essential if the government is to credibly track production and revenue.
On the prospect of reaching 2.5 million barrels per day, Emmanuel said the target appears unrealistic in the near term. He said ongoing and expected projects, including work tied to major offshore developments and production recovery from shut-in wells, could add meaningful volumes over the next two to three years. However, he estimated that the likely increase would be closer to 300,000 to 400,000 barrels per day if execution remains strong, rather than a jump sufficient to deliver 2.5 million barrels per day in the immediate future.
That would still represent progress for a country looking to recover from years of underinvestment, asset divestments by international oil companies, insecurity and operational losses.
The interview also turned to refining, with attention on the Dangote refinery after its gasoline-making unit was reportedly derated by 4% from May 21, with full operating rates expected to resume by mid-June.
Emmanuel described the temporary reduction as a normal operational event for a large refinery rather than a sign of broader distress. He said refineries globally periodically scale back output or adjust unit runs for maintenance, and may process intermediates to offset temporary shortfalls in finished fuel production.
He argued that the Dangote refinery has become strategically important for Nigeria’s domestic fuel market, especially at a time of heightened international risk. Without the plant, he suggested, Nigeria could have been even more exposed to imported fuel costs amid global disruptions.
Emmanuel added that the refinery has achieved gasoline quality specifications that meet international standards, allowing it to serve both domestic and export markets. He said the plant is capable of supplying Nigeria’s daily petrol requirements, reinforcing its role as a buffer against external shocks and import dependence.
Beyond the broader market discussion, Emmanuel also disclosed that his consulting firm recently received a permit from the Nigerian Midstream and Downstream Petroleum Regulatory Authority for a specialized category of services, including project economics validation and crude sourcing strategy. He said the approval would support the firm’s work across upstream, midstream and downstream projects, while helping local capacity development in areas historically dominated by expatriate service providers.
For investors, the immediate focus remains the June 12 submission deadline in the 2025 licensing round. While the timing points to government determination to pull in capital and raise activity levels, analysts say the real test will be whether Nigeria can match licensing momentum with reforms that improve security, transparency, metering, fiscal competitiveness and investor certainty.
Until then, the country’s oil sector may continue to attract attention for its geological potential and strategic crude quality, but remain constrained by the same operational and governance issues that have held back production growth for years.