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By Dozie Arinze

Introductory summary

Nigeria’s oil position has improved materially in 2026, but the country now faces a more strategic test than simply producing more barrels. Higher crude output, the scale-up of Dangote Refinery, and continued OPEC+ market management have created an opening for Nigeria to move from a volume-led oil model to a value-led energy strategy. The core policy challenge is to balance export earnings, domestic refining, fiscal stability and industrial growth in a period of elevated geopolitical uncertainty.

Suggested callouts

“In a quota-constrained world, value per barrel matters more than volume in isolation.”

“The most effective oil strategy for Nigeria now is not maximalist. It is disciplined: produce steadily, export strategically, refine locally, save windfalls, and build downstream industry.”

Nigeria’s oil conversation has changed materially this year and continues to track global geopolitical instability. The critical policy challenge is no longer whether the country can merely benefit from higher oil prices or small OPEC+ adjustments. The more urgent question is whether Nigeria can convert a better production profile, a stronger refining position and a more volatile geopolitical landscape into durable economic advantage.

That question matters because the 2026 fiscal framework still leaves very little room for policy error. The federal budget was built on an oil benchmark of about $64.85 per barrel, production of roughly 1.84Million barrels per day and a deficit already estimated more than ₦23Trillion. Even before the latest market shifts, that was a narrow balancing act. Since then, the external environment has become both more promising and more dangerous.

“The most effective oil strategy for Nigeria now is not maximalist. It is discipline. Produce steadily. Export strategically. Refine locally. Save windfalls. Incentivize capacity to leverage inevitable future windfalls. Build downstream industry beyond a one-horse army. Use oil to reduce fragility, not deepen dependence”

The first major development is that Nigeria’s production position has improved. By June 2026, the country’s crude oil output had risen to about 1.56Million barrels per day, above its OPEC quota of 1.5Million barrels per day, while combined crude and condensates climbed to roughly 1.74Million barrels per day. That is significant for two reasons. It shows that Nigeria is finally regaining some operational ground after years of underperformance. It also weakens the old argument that the country was being sidelined by OPEC+ simply because it could not meet even its existing allocation.

Yet this is not a moment for complacency. OPEC+ remains in the middle of a careful and politically charged unwinding of earlier production cuts. The group has continued approving additional increments of 188,000 barrels per day for a select set of core producers, Nigeria excluded, while maintaining the broader framework through the end of 2026 and carrying out a review of members’ sustainable production capacity for 2027 baselines. Nigeria supports that review, which it hopes to benefit from if it manages to consistently meet its 1.5Million barrels quota.

And rightly so. If the country  can sustain current production gains, it stands a better chance of arguing for a stronger future baseline. But sustaining gains is different from announcing them. Nigeria’s history of pipeline vandalism, theft, maintenance bottlenecks and export disruption still warns against treating one strong month as a permanent trend.

The second major development is more structural: refining has moved from aspiration to strategy. Dangote Refinery is no longer just a symbol of industrial ambition. It has become a regional energy factor. The plant has operated at its 650,000 barrel per day design capacity and, during testing, even exceeded 700,000 barrels per day. It is exporting products not only within West Africa but also to Europe, the United States and Saudi Arabia. More importantly, Nigeria crossed a historic threshold in March 2026 when it became a net exporter of petrol. That would have seemed improbable not long ago in a country that spent decades exporting crude and importing refined fuel.

This refining shift should change how Nigeria thinks about oil policy. For too long, strategy was dominated by a simple instinct: maximize crude exports, earn foreign exchange, and use the proceeds to patch the budget. That instinct is now outdated. In a quota-constrained world, value per barrel matters more than volume in isolation. A barrel refined domestically can support industrial activity, reduce import dependence, save foreign exchange, stabilize product supply and create downstream employment. A barrel exported as crude may bring immediate revenue, but it often leaves broader economic value on the table.

This does not mean Nigeria should abandon crude exports. Export earnings remain critical for fiscal stability, debt service, reserve management and exchange-rate confidence. OPEC has itself noted that Nigeria’s near-term outlook is supported by stronger oil production and reform momentum, even as high borrowing costs and inflation remain major risks. That warning is important. The real constraint on Nigeria’s oil advantage may no longer be purely production. It may increasingly be the cost of money, the cost of macro instability and the difficulty of translating oil-sector gains into wider economic relief.

That is why the right framework is not export revenue versus local growth. It is export revenue in service of local growth. Nigeria should be managing four linked priorities at once.

First, production must become more reliable than spectacular. The objective should be to hold crude output above quota consistently and keep total liquids rising through better field uptime, improved evacuation, stronger security architecture and faster maintenance execution. In the current environment, the cheapest new barrel is often the one already discovered but currently lost to theft, deferred maintenance or infrastructure weakness.

Second, domestic refinery supply should be treated as a strategic national allocation, not an afterthought. The country should ensure predictable crude feedstock for high- performing local refineries, especially where domestic processing lowers import bills and supports regional product exports. The gain from this approach is not only cheaper fuel.

It is the creation of a broader domestic value chain in petrochemicals, logistics, fertilizer, plastics and industrial service.

Third, Nigeria should reposition itself as a regional products and energy hub rather than a country defined only by crude exports. Dangote’s growing exports have already shown that Nigeria can help ease African supply shortages during geopolitical disruption. That opens a strategic lane: use local refining and product exports to deepen commercial influence across West and Central Africa, while also building more resilient foreign exchange earnings beyond crude cargoes alone.

Fourth, government must resist the old temptation to treat every oil upswing as permission for fiscal relaxation. With deficits still high and debt metrics still uncomfortable, prices above the budget benchmark should be treated as upside to be saved or deployed into infrastructure, not simply absorbed into recurrent spending. That is the only way the oil sector can help reduce fiscal vulnerability instead of recycling it.

The geopolitical background makes this discipline even more necessary. The after-effects of the Iran crisis, shipping insecurity around Hormuz, the renewed contest for market share among Gulf producers and the visible weakening of OPEC cohesion all point to a less predictable oil market. Nigeria may benefit from some of this turbulence at the margin, especially when supply disruptions support prices or redirect product flows toward African refiners. But the same instability can just as easily weaken planning assumptions, compress margins and expose how⁷ dependent public finance remains on forces outside Abuja’s control.

That is why 2026 should be understood as a strategic turning point. Nigeria can finally produce more credibly, refine at scale and export more intelligently. But these gains will matter only if policy also evolves. The country must stop asking only how many barrels it can produce and start asking how much value each permitted barrel can generate across the full economy.

“Nigeria’s history of pipeline vandalism, theft, maintenance bottlenecks and export disruption still warns against treating one strong month as a permanent trend.”

The most effective oil strategy for Nigeria now is not maximalist. It is discipline. Produce steadily. Export strategically. Refine locally. Save windfalls. Incentivize capacity to leverage inevitable future windfalls. Build downstream industry beyond a one-horse army. Use oil to reduce fragility, not deepen dependence.

If Nigeria takes these sensible steps, the current moment will be remembered not as another temporary oil upswing, but as the point at which Africa’s largest producer finally began to behave like a modern energy economy.

Dr. Paul Dozie Arinze is president of Pedestal Africa, an energy and investment advisory firm.

By Macson Obojemuinmoin

The CEO of BP has lamented that the company’s operational delivery fell short of the expected performance in the second quarter of 2026.

Meg O’Neill said that the UK major’s plants didn’t run as well as they did in the previous quarter – upstream plant reliability was 92.4%, compared to 95.7%, and production was down and the refineries processed less crude.

“This was due, in part, to planned maintenance and the conflict in the Middle East, but this is a reminder that we have more to do to deliver consistent operational performance”, she declared in a terse message accompanying the second quarter and half year 2026 report.

“We are not making the most of our potential”, charged the American business executive, who took the job in April 2026. “Our performance over the past few years has not met our own expectations, let alone those of our shareholders. We have not delivered consistently; we have written off too much value; and our costs and liabilities are not resilient enough in a low price environment”.

O’Neill, who joined BP from Woodside, the Australian operator, said that she had, in her three months in the role, “spent time with BP’s teams on the frontline and met investors, business partners, governments and other key stakeholders. In four months, I’ve seen enough to know this company can be extraordinary – from our high-quality assets to our integrated model, deep capabilities, strong partnerships and exceptional people”.

Her job, she explained, is to help make BP the best it can be. “We need to take a clear look at ourselves: assessing what needs to change, stopping what holds us back and building strength where it matters. We have to get fit to grow”

To deliver a step change in performance, in her view, Ms. O’Neill lays out five priorities:

1. Strengthening the balance sheet. This quarter we reduced the total of net debt, hybrids, leases and Gulf of America settlement liabilities by more than 11% compared to last quarter. That is still not enough – we need to do more. Financial resilience provides greater flexibility to invest to grow through the cycle and reward our shareholders.
2. Simplifying the portfolio based on value, not sentiment nor history. BP has to focus on the assets with the strongest potential to deliver competitive returns and long-term value – just as it has done with its decisions on the North Sea and Archaea.
3. Investing with greater discipline to ensure every dollar of capital competes. BP’s decision to sell Bay du Nord and free up the capital, shows that discipline in action. The company must keep challenging itself, using its balanced investment criteria to make decisions rooted in profitability, cash generation and market realities.

“I am very clear on this, we need to compete in the weight class we are in”.

4. Driving operational excellence. BP needs to run its assets safely, reliably and with greater cost efficiency. The company has made progress on reducing structural costs, but it has not improved enough where it matters most: the bottom line. BP needS to move faster, and it has both the opportunity and the technology to do this. Operational excellence is also about working safely with people, communities and the environment; it helps BP work to deliver energy that is secure, affordable and lower-carbon, where it makes business sense – and it is how BP will make itself more competitive.
5. Hardwiring high-performance and accountability into BP.

“We must make better, faster decisions, reduce complexity and sharpen accountability. Last month, we moved to an Upstream and Downstream organization, supported by our world-class trading business. This integrated model is a competitive advantage and an important first step”.

A new Floating Storage and Offloading (FSO)  for Oriental Energy’s Ebok oilfield, has sailed out China, passing through Malaysia, enroute to Ebok in south east offshore Nigeria.

Named MT Topaz, the vessel is expected to arrive in Nigeria latest July 31, 2026. It will replace Virini Prem,  the old, aging FSO which has been at work on the field since 2010.

Apart from storing crude from the main Ebok field, MT Topaz  will be useful in the development of the Ebok Deep North, a high priority project for the company in the next two years.

Ebok was put on stream in February 2011 by Afren, the then technical partner to Oriental Resources, the holder of the licence to the field.

When Afren crashed out due to bankruptcy in 2014, Oriental took over the operatorship of the two assets; Ebok and Okwok, by default.

At peak, Ebok produced around 40,000Barrels of Oil Per Day (BOPD).

In the last five years however, output has been around 10,000BOPD. The storage capacity of the new, incoming FSO is 1.2Million barrels, same as the old one.

By Olu Verheijen

For twenty-five years, NOG Energy Week has been one of the rooms where Nigeria tells the truth about energy: what we have promised, what we have postponed, what we have delivered, and what we must now become.

This year’s theme speaks of ambition, competitiveness and resilience. I want to add a fourth word: proof.

Because in this season — when records are being tested, reforms are being debated, and the future of our economy is being contested — Nigeria does not need louder promises. Nigeria needs proof that courage works. Proof that discipline works. Proof that when government does what it says, capital responds, production rises, and national confidence returns.

Let us begin with the world as it is, not as we wish it to be.

The global energy map has changed. Capital is no longer sentimental. It is not moved by speeches, slogans or sympathy. Capital has no passport. It is rational. It prices risk. It follows credibility. It asks one question: can this country turn resources into bankable projects, and bankable projects into reliable returns?

“This is campaign season. So, let the record be examined. Let the questions be asked. Let the debate be vigorous. But let it be honest.”

For Africa, that question is urgent. And for Nigeria, the scale of the task is equally clear: to sustain the current base and grow toward our 2030 production target, analysis shows a financing gap of about US$38.3 billion. That gap cannot be closed by rhetoric, and it cannot be closed by Nigeria alone. And that capital — from Lagos, Johannesburg, London, Houston, Abu Dhabi or Beijing — is asking for the same thing: credible rules, bankable projects, competitive costs, predictable regulation and disciplined execution. That is a warning — and an opportunity.

So, the competition is no longer only geology against geology. It is government against government. It is rules against rules. It is delivery against delay.

And Nigeria has made a choice.

We have chosen not to be a warehouse of raw potential. We have chosen to become an engine of African industrialisation. We have chosen not merely to produce molecules, but to convert molecules into megawatts, fertiliser, petrochemicals, mobility, manufacturing, jobs and exports.

That is the real energy transition for Africa. Not transition as surrender. Transition as transformation.

Under the leadership of President Bola Ahmed Tinubu, this administration has done what many said was too difficult, too risky, too controversial, or too politically expensive. We began to remove the distortions that punished production and rewarded leakage. We took on reforms that had been discussed for years and delayed for decades.

We recalibrated fiscal terms, clarified regulation and streamlined oversight. We introduced targeted incentives and cut contracting timelines by more than half. And we made a clear statement to the world: Nigeria is no longer asking to be trusted; Nigeria is working to be bankable.

The results are not abstract.

We are targeting three million barrels per day and ten billion standard cubic feet of gas per day by the end of the decade. We now have more than $50Billion of upstream projects in the visible pipeline. In the last three years, more than $10Billion of long-awaited final investment decisions have come through.

Crude oil and condensate production has risen by about 400,000 barrels per day since 2023. Onshore production is at its strongest level in twenty years. Nigeria’s share of Africa’s upstream FIDs has risen dramatically — from the margins to leadership. External reserves have crossed 50 billion dollars. These are not talking points. They are signals. When the rules improve, capital moves.

And we are not only fixing oil and gas. We are resetting power.

For too long, the electricity market carried the weight of unpaid obligations, broken incentives and weak confidence. That is why the Presidential Power Sector Financial Reforms Programme is not merely a bond issue; it is a ₦4Trillion credibility programme. It is a negotiated reset of legacy obligations, payment discipline and market confidence across the generation, gas and financing chain.

It says to GenCos: produce with confidence. It says to gas suppliers: supply with confidence. It says to lenders and investors: Nigeria is rebuilding the bankability of the power value chain. And it says to Nigerians: the objective is not accounting elegance in Abuja; it is more reliable power for factories, SMEs, agro-processing, mining and homes.

And because power is only as viable as the fuel that feeds it, gas must move from aspiration to execution. Gas is not a slogan. Gas is Nigeria’s industrial backbone: the fuel for power, the feedstock for fertiliser and petrochemicals, the bridge to CNG mobility, LNG exports, regional integration and cleaner kitchens.

But we must be honest: reform has been hard on households, and the recent spike in cooking-gas prices was a warning that domestic supply, logistics, affordability and market discipline must move together. A gas-rich nation cannot be comfortable when families are priced back to firewood, charcoal or kerosene. That is why we are acting on both supply and affordability. We are growing domestic LPG supply, rebuilding the import buffer where it is needed, strengthening market surveillance, and moving toward transparent pricing benchmarks so consumers, regulators and investors can see the market more clearly. The VAT Modification Order of 2024 zero-rates LPG and exempts the equipment and conversion chain — including cylinders, valves, regulators, conversion kits and installation services — from VAT.

Since January 2024, our office has supported Import Duty Exemption Certificates for LPG infrastructure worth about $92.6Million, including about $30.4Million this year alone. These incentives are not isolated measures; they align with the Decade of Gas, NNPC’s gas strategy and the Presidential CNG Initiative. Together, they point in one direction: a Nigeria where gas powers industry, electricity becomes more reliable, cooking becomes cleaner and more affordable, and reform finally shows up in the daily life of the Nigerian family. And let us be very clear about Africa.

For too long, the electricity market carried the weight of unpaid obligations, broken incentives and weak confidence. That is why the Presidential Power Sector Financial Reforms Programme is not merely a bond issue; it is a ₦4Trillion credibility programme. It is a negotiated reset of legacy obligations, payment discipline and market confidence across the generation, gas and financing chain. It says to GenCos: produce with confidence. It says to gas suppliers: supply with confidence. It says to lenders and investors: Nigeria is rebuilding the bankability of the power value chain.

Africa does not need pity. Africa needs scale. The Dangote Refinery, at 650,000 barrels per day, is proof that African industrial scale is not aspirational; it is operational. Indigenous participation in gas has risen from 69% to 83%. Companies such as Seplat, Oando and Renaissance are not merely local players; they are continental energy actors. This is ownership. This is capability. This is the future taking institutional form.

But ownership must be matched with discipline. Local content must create value, not inflation. Regulation must accelerate, not obstruct. Policy must invite capital, not frighten it away. Every unnecessary delay is an export subsidy to another country. Every unclear approval is a tax on national ambition. Every project we fail to deliver becomes somebody else’s refinery, somebody else’s power plant, somebody else’s jobs.

That is why reform is never neutral. Reform changes incentives. It changes habits. It changes the balance between those who benefited from complexity and those who deserve efficiency.

So, yes, reform will always meet resistance. Some of that resistance is sincere; change can be disruptive, and responsible leadership must listen. But some of it also comes from the comfort of old arrangements — from systems that worked well for a few, but not well enough for the country.

When we shorten approval timelines, we are not attacking anyone; we are defending national competitiveness. When we close revenue leakages, we are not settling scores; we are protecting the Nigerian people. When we insist on transparency, discipline and delivery, we are not being impatient; we are recognising that Nigeria has already waited too long.

And in moments of change, people will always find language to question the messenger. Too new. Too direct. Too ambitious. Too unconventional. But leadership is not validated by comfort. It is validated by results.

We welcome scrutiny. We welcome debate. We welcome honest criticism. But we will not apologise for reforming systems that must work better for Nigerians, for investors, and for the next generation. And I say ‘we’ deliberately.

This record belongs to a team: the President who set the direction; state governments, the Ministers, regulators, our national oil company, government agencies, operators, investors, civil servants and workers across the value chain. It belongs also to Nigerians, who have carried the burden of reform and have every right to demand that reform now produces relief, jobs and dignity.

We have not finished the work. No serious reformer says the job is done. Inflation, affordability, security, metering, infrastructure and execution still demand urgency. But let no one confuse unfinished work with failed work. Nations move when people decide that temporary discomfort is better than permanent decline.

This is campaign season. So, let the record be examined. Let the questions be asked. Let the debate be vigorous. But let it be honest.

Ask whether Nigeria is more credible today than yesterday. Ask whether investment is returning. Ask whether production is rising. Ask whether power-sector debt is finally being addressed. Ask whether gas is being treated as industrial infrastructure, not just export commodity. Ask whether the old excuses are still strong enough to defeat a new national ambition.

My answer is clear.

The age of Nigerian hesitation is ending. The age of Nigerian ambition has begun. Our task now is to turn reform into relief, capital into projects, projects into jobs, and energy into national greatness.

History will not ask whether we inherited oil, gas, sun, rivers and talent. History will ask whether we converted them into prosperity. Whether we left behind pipelines instead of promises. Power plants instead of press releases. Institutions instead of personalities. Jobs instead of slogans. Confidence instead of cynicism.

The first twenty-five years of NOG helped build consensus. The next twenty-five must build delivery.

Let it be said that when the world changed, Nigeria did not shrink. Let it be said that when capital demanded credibility, Nigeria built it. Let it be said that when the establishment defended delay, a new generation chose execution. Let it be said that we stopped celebrating potential and started delivering performance.

That is the work. That is the record. That is the legacy.

Olu Arowolo Verheijen is the Special Adviser on Energy, to Nigeria’s President Bola Ahmed Tinubu.  She delivered this address at the NOG Energy Week in Abuja on July 7, 2026.

Some of the large, foreign headquartered independents operating in Africa still have a grip on things. Apache Corp topped up its output in Egypt in the last one year. ConocoPhillips averaged more than a 100,000Barrels of Oil Equivalent in Equatorial Guinea and Libya. Woodside Energy zoomed to 89,000BOEPD in Senegal.

Things are more complicated for the small and mid-cap Indie. In the last six months, Maurel et Prom (M&P) had sold out of Nigeria, its largest non-operated producing portfolio. Orca Energy is exiting Tanzania. Kosmos Energy has left its only producing asset in Equatorial Guinea. Capricorn Energy has had some reduction, if minor, in Egyptian output, and Tullow is in the process of being persuaded to wrap up in Ghana.

There are two key patterns. 1) Having used Africa as a footstool, some Indies see bigger opportunities outside the continent. That’s the case with Kosmos, M&P and BW Energy. (2) African National Oil Companies and homegrown independents are competing more fiercely for divested assets and winning more where the small and mid-cap, Western listed independents, once held sway.

And there is more: Murphy Oil Corp’s June 2026 discovery of oil in the Bubale-1X in excess of 2,000metre water depth in the Tano Basin offshore Côte d’Ivoire, announced after a gruelling drilling of over 20,000feet of vertical hole, is a reminder that there is no settled story about hydrocarbon exploration in Africa.

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The Africa Oil+Gas Report is the primer of the hydrocarbon industry on the continent. It is the market leader in local contextualizing of global developments and policy issues and is the go-to medium for decision makers, whether they be international corporations or local entrepreneurs, technical enterprises or financing institutions. Published by the Festac News Press Limited since 2001, AOGR is a paid subscription, monthly e-copy publication delivered around the world. Its website remains www.africaoilgasreport.com, and the contact email address is info@africaoilgasreport.com. Contact telephone numbers in the West African regional headquarters in Lagos are +2348124374087, +2348130733523, +2347062420127, +2348036525979, +2348023902519.

–Editor