Prof. Wumi Iledare
-By Wumi Iledare, Professor Emeritus of Petroleum Economics, FNAEE
Today, I wish to offer a measured reflection on the state of Nigeria’s oil and gas sector in the era of the Petroleum Industry Act (PIA) under the administration of President Bola Ahmed Tinubu (PBAT). My purpose is neither to celebrate nor condemn, but rather to assess where we are relative to where we ought to be.
The Petroleum Industry Act, signed into law in 2021, represents the most comprehensive reform of Nigeria’s petroleum sector since the discovery of crude oil in commercial quantities about 70 years ago in Oloibiri. The Act was intended to provide regulatory clarity, attract investment, improve governance, commercialize the national oil company, strengthen host community relations, deepen gas development, and ultimately enhance value creation from Nigeria’s hydrocarbon resources.
In essence, the PIA sought to reposition Nigeria from a nation dependent on petroleum revenues to a nation that efficiently transforms petroleum resources into sustainable economic prosperity.
The question before us today is simple: How well are we translating the aspirations of the PIA into measurable outcomes under the current administration?
From a petroleum economics perspective, there is evidence that progress is being made.
The administration has demonstrated a willingness to confront long-standing structural challenges in the sector. The removal of fuel subsidies, while difficult and socially disruptive in the short term, reflects a recognition that distorted pricing systems are neither fiscally sustainable nor economically efficient. Executive Orders aimed at improving fiscal competitiveness and reducing project costs signal an understanding of the urgent need to attract capital into Nigeria’s upstream petroleum industry.
There are also encouraging signs regarding domestic refining. The commencement of operations at the Dangote Refinery and efforts to rehabilitate state-owned refineries have altered conversations about Nigeria’s historical dependence on imported petroleum products. If managed effectively, these developments have the potential to strengthen energy security, conserve foreign exchange, and support industrial growth.
Similarly, improvements in crude oil production levels compared to recent lows suggest that efforts to address crude theft and operational disruptions are yielding some positive results.
However, it is important to distinguish between progress and transformation. While the investment climate has improved, Nigeria remains in intense competition with other petroleum-producing jurisdictions for global capital. Investors continue to evaluate regulatory consistency, contract sanctity, security conditions, and ease of doing business before committing scarce investment resources. The lack of a visible driver on seat to pilot the oil and gas sector remains a challenge
Oil production, though recovering, remains below both national aspirations and available resource potential. Production growth must be viewed not simply in terms of barrels produced but in terms of value created for the Nigerian people.
The commercialization journey of NNPC Limited also remains a work in progress. The PIA envisioned a commercially driven enterprise operating with transparency, accountability, and minimal political interference. Continued progress toward these objectives will be critical to the long-term credibility of the reform process.
Likewise, the implementation of Host Community Development Trusts has created new opportunities for stakeholder engagement, yet challenges relating to governance capacity, transparency, and sustainable project delivery remain.
In the gas sector, despite substantial resource endowments and the ambitions of the Decade of Gas initiative, Nigeria has not yet fully unlocked the transformative potential of natural gas as a catalyst for industrialization, power generation, employment creation, and energy transition.
Thus, while reforms have been initiated, their full benefits have yet to be realized. The central lesson is that legislation alone does not create value. Policies create opportunities, but institutions, implementation, and accountability determine outcomes. The sector needs a visible driver with requisite experience to pilot the sector with authenticity!
From a petroleum economics standpoint, the ultimate measure of success is not the number of reforms enacted or the number of announcements made. Success should be measured by whether the sector is generating greater economic value, improving energy security, attracting sustainable investment, creating employment opportunities, expanding domestic industrial capacity, and enhancing the welfare of Nigerians.
The PIA era under PBAT may therefore be described as a period of transition rather than transformation. Nigeria has moved beyond policy inertia. Important reforms have been activated. The foundations for future growth are being strengthened. Yet significant work remains before the objectives envisioned by the PIA are fully achieved.
The challenge before policymakers, regulators, industry operators, and all stakeholders is to bridge the gap between what ought to be and what is.
What ought to be is a globally competitive petroleum sector characterized by efficient governance, robust investment, strong institutions, sustainable production, vibrant gas markets, and broad-based prosperity.
What is today is a sector showing signs of recovery and reform but still confronting structural constraints, implementation gaps, infrastructure deficits, and governance challenges.
The future of Nigeria’s oil and gas sector will not be determined solely by the quality of the Petroleum Industry Act. It will be determined by the consistency, discipline, and effectiveness with which its provisions are implemented.
As we continue this journey, we must remain committed to the principle that Nigeria’s petroleum resources are not an end in themselves. They are a means to achieving sustainable development, economic opportunity, energy security, and improved quality of life for present and future generations.
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