Nigeria Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in nigeria, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Oil, Gas, and Mining Sectors
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Overview

As of the end of 2024, the oil and gas outlook for Nigeria reflects a complex landscape shaped by various factors, including the following:

  • Production Levels: Nigeria has been aiming to increase oil production levels, with targets set to enhance output from approximately 1.5 million barrels per day (bpd) to higher levels. However, challenges such as pipeline vandalism, regulatory issues, and maintenance of aging infrastructure continue to hinder full production potential.
     
  • Investment Climate: The Nigerian government is actively seeking foreign investment to boost the oil and gas sector, especially in exploration and production. Reforms aimed at improving the regulatory environment are expected to attract new investors.
     
  • Global Oil Prices: Fluctuating global oil prices will significantly impact Nigeria’s economy, which is heavily reliant on oil revenues. Prices have seen volatility due to geopolitical tensions, OPEC+ production decisions, and global demand shifts.
     
  • Transition to Renewables: There is an increasing emphasis on diversifying the energy mix, with Nigeria exploring renewable energy options. The government is promoting gas as a transitional fuel while also investing in solar and wind energy projects.
     
  • Local Content Development: Efforts to boost local content in the oil and gas industry continue to be a priority. The government is pushing for increased participation of Nigerian firms in oil exploration and production activities.
     
  • Environmental Concerns: Environmental issues, particularly in the Niger Delta, remain a significant challenge.
    Communities are advocating for more sustainable practices and equitable sharing of oil revenues, leading to potential social unrest if not adequately addressed. Crimes of opportunity persist in host communities through which oil and gas pipelines run.
     
  • Technological Advancements: The adoption of new technologies in exploration and production, such as digital tools and enhanced oil recovery techniques, is expected to improve efficiency and output.

Nigeria continues to face significant economic challenges due to oil theft and disruptions in production, which impact a vital source of government revenue and GDP. In 2024, the country’s average daily oil production was approximately 1.43 million barrels per day (bpd) as of October, marking a slight increase from earlier months but still below the OPEC quota of 1.5 million bpd. Oil theft remains a persistent issue, causing billions of dollars in revenue loss annually​

Nigeria remains a leading African oil producer, exporting high-value, low-sulphur crude oil, and remains a significant exporter of liquefied natural gas (LNG). The $10 billion Nigeria Liquified Natural (NLNG) Train 7 project continues to progress, aiming to enhance LNG production capacity in the coming years. NLNG currently operates six LNG production units (referred to as “trains”) at its Bonny Island facility in Rivers State. The Train 7 project is designed to add a seventh unit, boosting annual LNG production from the current 22 million metric tons (MMT) to approximately 30 MMT. 

The Petroleum Industry Act (PIA), implemented in 2021, is gradually reshaping the oil and gas sector by streamlining regulations and fiscal structures, facilitating stalled projects, and potentially boosting production efficiency​. While the core provisions of the PIA have not undergone major amendments, the GON’s focus has been on refining its implementation to address evolving industry needs and improve regulatory effectiveness These developments highlight opportunities for international investments, including U.S. companies, in Nigeria’s oil infrastructure and LNG development to support sector recovery and expansion. However, challenges for interested companies include foreign exchange controls, local content requirements, and infrastructure deficiencies. Nevertheless, the GON is working to improve transparency and attract greater private investment in the mining sector.

Opportunities

  • Upstream: Provision of gas-to-liquid technology, technical service contracts, and participation in marginal field development.

  • Downstream: Equipment and services for storage, transportation, and distribution infrastructure.

  • Gas: Gas processing and pipeline equipment, LNG/LPG plant technology, and gas-based industrial projects.

  • Mining: Sales of mining equipment, machinery, and associated technology/services for solid minerals extraction.
     

Opportunities and Challenges in the Mining Sector 

The Nigerian mining sector continues to evolve as a significant investment destination, particularly for U.S. companies involved in extractive industries. The sector presents substantial opportunities in equipment sales, machinery, technology, and associated services. The Ministry of Solid Minerals Development (MMSD) has taken an active role in attracting both local and international investment, with current mining activities concentrated in Gold, Baryte, Tin, Lead, and Zinc mining and processing. A notable development is the discovery of Lithium deposits in Northern Nigeria, creating new opportunities for local mining companies.

The government has implemented substantial institutional and legal reforms to enhance the sector’s attractiveness for investment. These reforms focus on addressing the underutilized potential of solid mineral wealth and creating a more favorable environment for foreign investment. The regulatory framework continues to evolve with ongoing discussions about mining activity regulations and environmental compliance.

Despite some advancements, Nigeria’s mining sector continues to face considerable challenges in 2024. Production has been affected by a lack of reliable geoscience data, inadequate infrastructure, and security issues, particularly in mineral-rich regions. Access to electricity, transportation to mine sites, and outdated equipment are among the most critical barriers to efficient operations. The Nigerian Geological Survey Agency has introduced the Mineral Resources Decision Support System to address data deficits, but its full impact is yet to be realized. Additionally, the government is working to improve infrastructure and security through public-private partnerships and specialized task forces to combat illegal mining​. 

To enhance governance and focus, Nigeria split its mining administration into the Ministry of Solid Minerals Development and the Ministry of Steel Development in 2023. These entities are tasked with improving sector-specific operations and advancing projects like rail rehabilitation and tax incentives to attract private investments. However, the industry still grapples with environmental concerns, community engagement issues, and a need for technological modernization. Tackling these challenges is essential for the sector to meet its potential and sustain growth

Resources 

Nigerian Upstream Petroleum Regulatory Commission 
Nigerian Midstream and Downstream Petroleum Regulatory Authority
The Nigerian National Petroleum Company Limited

For more sector information, e-mail:  Banksharon Nwaneri, U.S. Commercial Service, U.S. Consulate General, Lagos, Nigeria at Banksharon.Nwaneri@trade.gov