Nigeria Targets 2.5mbpd, $21bn Deepwater Investment

By Olumide Johnson

Nigeria is seeking to restore crude oil production to 2.5 million barrels per day as improved pipeline security, new offshore incentives and progress on major deepwater projects create a fresh investment push across the upstream sector.

The target would return production to a level last reached more than two decades ago, while the proposed Bonga Southwest/Aparo development alone could attract up to $21 billion in investment.

DEVELOPMENT:
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is leading efforts to increase production through sustained pipeline surveillance, revival of dormant fields, deeper exploration and new investment.

Stakeholders are also calling for continued operations by Tantita Security Services Nigeria Limited in the Niger Delta, arguing that protecting oil infrastructure is fundamental to restoring production and investor confidence.

Nse Victor Udoh, President General of the Niger Delta Progressive Alliance, said that pipeline protection has helped shift the industry from reactive crisis management toward longer-term planning.

“It is important to clarify the role of pipeline surveillance within the wider energy landscape. Energy security encompasses the full value chain, from exploration and production to refining, distribution, pricing policy, and subsidy frameworks. Pipeline surveillance does not manage these domains,” Udoh said.

He added: “Its mandate is precise: safeguarding critical infrastructure that transports petroleum resources. Yet this single function has proven foundational. Without secure transportation channels, production targets falter, refining plans collapse, exports decline, and fiscal projections become unreliable.”

Udoh further described asset protection as an economic prerequisite, saying: “Asset protection, in this context, is not a supporting activity. It is a precondition for economic order.”

Meanwhile, NNPC Ltd and partners have signed agreements intended to move the Bonga Southwest/Aparo project closer to Final Investment Decision. The partners have also completed the project’s Pre-FEED phase.

NUMBERS:
Nigeria’s crude and condensate production has risen from 1.48 million bpd in February to 1.735 million bpd in June, according to the NUPRC.

The country’s historical production peak was approximately 2.5 million bpd, reached in November 2005. Current production therefore remains substantially below the government’s target.

The investment pipeline is potentially significant:

• $21bn: estimated investment in Bonga Southwest/Aparo.
• 175,000 bpd: projected peak oil production from the project.
• 140m scf/d: projected peak gas production.
• $50bn: potential new investment in Nigeria’s offshore sector associated with new incentives, according to the NUPRC.
• $2bn: current annual oil and gas investment, down from $26bn in 2014, according to Eyesan.

The 2025 licensing round also produced 31 successful companies for 37 oil and gas blocks, with signature bonuses ranging from $3 million to $7 million per block.

SIGNIFICANCE:
For investors, the central issue is whether Nigeria can convert improved security and regulatory reform into sustained production and actual capital deployment.

Higher production has direct implications for export earnings, foreign exchange inflows and government revenues. But production growth requires more than securing pipelines. It also depends on field development, infrastructure, exploration, enhanced recovery and faster regulatory execution.

Catherine Uju Ifejika, Chairman/Chief Executive Officer of Brittania-U, provides a useful illustration of what capital can achieve in mature assets. She said the company invested more than $400 million after acquiring the Ajapa field from Chevron, including additional wells and an FPSO, enabling production to begin at about 2,300 bpd in 2010 and subsequently increase and stabilise.

Mrs. Oritsemeyiwa Eyesan, Commission Chief Executive of the NUPRC), similarly stressed the need to rebuild technical capacity as investment returns to the sector.

“Today we are attracting new investments and so we want to see an upward trajectory. It stands to reason that you must go back to the basics. First of all, we need the right competencies in sub-surface,” she said.

NEXT MOVE:
The immediate test is execution.

Investors should watch whether the 37 blocks awarded in the 2025 licensing round progress beyond provisional awards, particularly as the NUPRC has warned successful bidders that failure to pay signature bonuses within the stipulated period could result in forfeiture.

The Bonga Southwest/Aparo project is another critical milestone. Its progression from Pre-FEED toward FEED and ultimately FID will provide a stronger indication of whether Nigeria’s offshore investment reforms are translating into committed capital.

Production data will remain the ultimate scorecard. The critical question is whether output can move materially beyond 1.7 million bpd and eventually close the gap toward the 2.5 million bpd target.

OUR LENS:
Nigeria’s production problem is increasingly less about the absence of hydrocarbons and more about the conversion of reserves into reliable, investable production.

Pipeline surveillance addresses one major leakage point, but security alone cannot deliver 2.5 million bpd. The investment decline from $26 billion in 2014 to about $2 billion annually shows the scale of the capital challenge.

As industry stakeholders put it, “Exploration must be accompanied by aggressive field development, enhanced recovery from mature assets, improved security, infrastructure upgrades and faster regulatory approvals.”

The deeper investment signal is therefore the interaction between security, policy, capital and project execution. If Nigeria can sustain secure production, make its fiscal regime competitive and move large projects such as Bonga Southwest/Aparo to FID, the 2.5 million bpd ambition becomes an investable proposition rather than simply a production target.

But if new discoveries and licensing awards continue without corresponding field development, infrastructure investment and project execution, Nigeria risks repeating the cycle of having substantial reserves without converting them into sustained barrels, revenues and foreign exchange.

Olumide Johnson is a journalist, reporting on energy, business, markets, policy and developments shaping Nigeria’s economy.