Indigenous Operators Now Produce More Than Half of Nigeria’s Oil — What It Means for Nigerians

For Nigerian workers, businesses and professionals in the oil and gas industry, a major shift is taking place: indigenous companies now account for more than half of the country’s crude oil production, according to the Federal Government.

The development means a larger share of Nigeria’s oil-producing activity is being handled by Nigerian-owned or Nigerian-led operators, creating greater opportunities for local companies, technical professionals, contractors and workers across the petroleum value chain.

However, the government says increased production must be matched by investment in infrastructure, refining, transportation, storage and skills if the wider economy is to benefit.

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, disclosed the development on Wednesday at the maiden Petroleum Technology Development Fund (PTDF) Journal Summit 2026 in Abuja.

Represented by his Technical Adviser, Engr. Emmanuel Sinime, Lokpobiri said indigenous operators now account for more than 50 per cent of Nigeria’s crude oil production.

He attributed the change partly to major divestment transactions involving international oil companies, which transferred important assets and created opportunities for indigenous operators to expand their participation in the upstream sector.

The minister also said Nigeria's crude oil production had risen from about one million barrels per day in 2023 to more than 1.7 million barrels per day, while the number of active drilling rigs increased from about 14 to more than 60.

Recent government statements have put the indigenous share even higher. In July, the Ministry of Petroleum Resources said indigenous operators accounted for more than 60 per cent of Nigeria's daily crude production, following completed divestments by major international oil companies.

The difference between the figures reflects statements made at different times and contexts. The specific figure announced at the PTDF summit was more than 50 per cent.

The change is important because oil production supports a much wider network of businesses and workers than the companies extracting crude.

Oilfield service companies, engineers, technicians, logistics providers, manufacturers, contractors and other suppliers can participate when indigenous operators invest in exploration, production, transportation and processing.

The growth of indigenous operators has also been accompanied by examples of increased local operational capacity.

For instance, Heirs Energies said in August that its crude production had increased to more than 55,000 barrels per day, while its executive said indigenous companies now operated more than 60 per cent of Nigeria's oil production.

That does not mean every Nigerian will automatically see higher income or employment. The wider benefit depends on how much investment takes place locally, how many Nigerian businesses participate in supply chains and whether the additional production can be transported and processed efficiently.

The petroleum industry's changing ownership structure also increases the importance of Nigerian technical expertise.

At the PTDF summit, Executive Secretary Prof. Shuaibu Aliyu said the agency wanted research to move beyond publication into practical application, intellectual-property development and commercialisation.

The Managing Director of Waltersmith Petroman Oil Limited, Oladapo Filani, similarly highlighted the need not only to train Nigerians but also to retain skilled professionals and create opportunities for them to apply their expertise to local problems.

This is particularly relevant as indigenous operators take on assets that require engineering, geology, drilling, production, maintenance, logistics and other specialised skills.

Nigeria's higher oil production comes with a significant infrastructure challenge.

Lokpobiri said increased crude production needs to be supported by efficient transportation and storage systems, greater refining capacity and a competitive market.

Other industry participants at the summit pointed to gaps in pipelines, gas processing, storage, terminals and product logistics. Pipeline vandalism, theft and infrastructure-integrity problems were also identified as factors that can disrupt supply.

The Federal Government has also linked recent production improvements to completed divestments and increased investment. In July, the government reported that production had risen to more than 1.8 million barrels per day and that active drilling rigs had increased from about 14 in 2023 to more than 60.

Why people should care

For ordinary Nigerians, the significance of the development is not simply that ownership of oil assets is changing.

The more important question is whether greater indigenous participation translates into productive investment, jobs, stronger Nigerian businesses, technical skills and more reliable energy infrastructure.

A larger role for indigenous companies can create opportunities across the domestic supply chain, but those opportunities depend on companies having access to financing, technology, infrastructure and stable regulation.

The government itself acknowledged these challenges. Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), identified infrastructure gaps, high financing costs, project risks, regulatory bottlenecks and inadequate reliable energy infrastructure as constraints to private-sector participation.

The Federal Government says it will continue creating conditions for private-sector investment across the petroleum value chain.

In the gas sector, officials said investment is needed in processing, transportation and distribution infrastructure, as well as LPG, CNG, petrochemicals and other gas-based industries.

The government has also said international oil companies are increasingly focusing their investments on deepwater operations after divesting some onshore assets, while indigenous companies take a larger role in domestic production.

Nigeria's petroleum industry is becoming more domestically operated, with indigenous companies now responsible for more than half of crude production according to the Federal Government.

The real test for Nigerians will be whether this greater participation is accompanied by the infrastructure, skills, financing and industrial capacity needed to turn oil production into broader economic opportunities.