Minister of State for Petroleum Resources (Oil) Senator Heineken Lokpobiri talks to The Energy Year about Nigeria’s progress towards its 2.5 million bopd production target as the country introduces reforms to lower upstream operating costs, attract investments and expand the participation of host communities in oil and gas projects.
- Fiscal and regulatory reforms are reigniting upstream investment in Nigeria. Clearer frameworks enabled by the Petroleum Industry Act, together with faster approvals and reinforced tax incentives, are helping to attract long-term capital investors.
- Targeted measures to reduce oil theft and pipeline vandalism, and to increase community engagement in oil and gas projects, are proving critical in the creation of stable operating environments for oil and gas companies and boosting output in basins previously constrained by underinvestment.
- Recently enacted tax credits and operational incentives are improving project economics for indigenous operators, enabling them to extend the commercial life of mature assets and increase activity in marginal fields.
What have been the most impactful policy interventions driving this growth, and what does the trajectory toward 2.5 million bopd look like?
When this administration took office, crude oil production had plummeted to near or below 1 million bopd due to years of underinvestment, pipeline vandalism, oil theft and legacy contractual issues. Today, we are consistently producing between 1.7 million and 1.8 million bopd, a substantial recovery of roughly 700,000 to 800,000 bopd in a relatively short time.
Our current OPEC quota of approximately 1.5 million bopd was set when our actual output was lower. As production has recovered and new projects have come online, that quota no longer fully reflects our capacity. We have already engaged OPEC+ constructively and will continue to make the case for a higher quota that recognises our improved performance and ongoing investments.
Towards the 2.5 million bopd target by 2027, Project One Million Barrels, new field developments, rig activity growth and improved security are laying the foundation. We are targeting around 2 million bopd in the near term, scaling towards 2.5 million bopd by 2027 as major projects such as Bonga North and others ramp up. Success depends on continued security improvements, timely project execution and attracting the necessary capital. We are realistic about the challenges but confident in the trajectory.
In 2025, Nigeria approved 28 new field development plans. What does that say about where Nigeria stands as an upstream investment destination?
The approval of these 28 field development plans, which are expected to unlock approximately 1.4 billion barrels of reserves, demonstrates that investors are once again willing to commit substantial long-term capital to Nigeria. It shows that the combination of improved fiscal terms under the Petroleum Industry Act, faster regulatory approvals, visible progress on security in the Niger Delta, and the government’s commitment to reform is working. Nigeria captured four of the seven major FIDs recorded in Africa in 2025, further reinforcing our position as the continent’s leading upstream investment hub.
To sustain this momentum in the coming years, the ministry is focused on three key priorities. We will maintain strong and consistent security measures through enhanced collaboration with security agencies, technology deployment and community engagement, to ensure operators can work without interruption. We are also committed to further improving the ease of doing business by streamlining approval processes, enforcing clear timelines and fully implementing the provisions of the Petroleum Industry Act. Finally, we will continue to create a predictable and transparent investment environment through well-structured licensing rounds, targeted fiscal incentives and strategic partnerships that deliver value for both investors and the Nigerian people.
The Upstream Petroleum Operations (Cost Efficiency Incentives) Order, 2025, introduced tax credits to help bring down operating costs for upstream producers. How has the industry responded, and are further incentives planned?
The measure has received a very positive response. Operators have welcomed it as a practical and timely intervention that directly improves project economics, enhances competitiveness and encourages accelerated investment in both existing assets and new developments. Since its introduction, we have seen increased workover activities, higher rig utilisation and a greater focus on cost optimisation across several fields.
This incentive is already contributing to our broader production recovery efforts by making marginal and mature fields more viable while supporting the development of new projects. The industry’s swift uptake demonstrates that when the government introduces well-designed, transparent incentives, operators respond with concrete operational improvements.
Host community relations have historically constrained production in the Niger Delta. What progress has the ministry made on that front under the Petroleum Industry Act, and how much production is attributable to improved security and community engagement?
Host community relations have indeed been one of the most persistent challenges affecting production stability in the Niger Delta for many years. Under the Petroleum Industry Act’s Host Communities’ Development Trust, we have introduced greater transparency, structured funding mechanisms and direct participation of communities in the development of projects that affect them. Operators are now required to contribute to trust funds, and communities have a clearer voice in project selection and implementation. This has shifted the relationship from one of confrontation to one of collaboration in many areas.
We have also strengthened security architecture through closer co-ordination between the military, police and community-based surveillance structures, supported by advanced technology for pipeline monitoring. These combined efforts have significantly reduced pipeline vandalism, oil theft and illegal bunkering.
A substantial portion of our production recovery is directly attributable to improved security and enhanced community engagement. By addressing the root causes of unrest and ensuring communities see real benefits from oil and gas operations, we have been able to bring back previously deferred or shut-in production and create a more stable operating environment. While challenges remain, the positive trend is clear, and we are committed to expanding these gains in the years ahead.
The African Energy Bank (AEB) is now headquartered in Abuja to help mobilise the continent’s capital to finance African energy projects. What role did Nigeria play in making the bank operational, and what financing gaps will it address?
Nigeria has played a central and pivotal role in making the AEB operational. As the host country, we provided the fully equipped headquarters and have worked closely with other African nations to finalise governance structures, secure initial capital commitments and establish a clear operational roadmap. Our leadership has been instrumental in moving the bank from concept to reality, reflecting Nigeria’s commitment to mobilising the continent’s own resources for its development needs.
The AEB is best positioned to address critical financing gaps that multilateral institutions and commercial banks often overlook or underserve. These include midstream gas infrastructure, marginal field developments, gas-to-power projects and transitional energy initiatives across the continent. With more than USD 4 trillion from African pension funds, insurance companies and sovereign wealth funds currently invested largely outside the continent, the bank can catalyse the redirection of this domestic capital into high-impact, Africa-led projects. By offering tailored financing solutions that address continental risks better than those of external lenders, the AEB will help bridge the estimated multi-billion-dollar infrastructure gap while promoting projects that align with Africa’s energy security and industrialisation priorities.
Nigeria will continue to support the bank’s swift operationalisation so it can begin approving and funding projects in the near term. This institution represents a bold step towards reducing reliance on external financing and ensuring Africa’s energy future is shaped by Africans.