Nigeria's indigenous oil producers have achieved a historic milestone, accounting for more than 60 per cent of the country's crude oil production for the first time since commercial oil production began in 1956. The development marks a defining shift in the nation's petroleum industry, with local operators now taking the lead in an upstream sector once dominated by international oil companies (IOCs).
The transformation follows years of strategic IOC divestments, regulatory reforms under the Petroleum Industry Act (PIA), improved pipeline security and stronger engagement with host communities. It has also coincided with a steady recovery in Nigeria's crude oil output, which has risen from about 700,000 barrels per day (bpd) in 2022 to approximately 1.7 million bpd.
Speaking at the 49th Nigeria Annual International Conference and Exhibition (NAICE) organised by the Society of Petroleum Engineers (SPE) Nigeria Council in Lagos, the Chief Executive Officer of Heirs Energies, Osayande Igiehon, said indigenous companies have become the driving force behind Nigeria's ambition to increase crude oil production to three million barrels per day by the end of the decade.
According to Igiehon, indigenous firms contributed only 20 to 30 per cent of Nigeria's crude oil production before the COVID-19 pandemic but have since emerged as the dominant players in the upstream industry. He cited Heirs Energies as an example, noting that the company assumed operational control of its assets in 2021 with production of 25,000 bpd and has since more than doubled both its oil output and gas production, now producing over 100 million standard cubic feet of gas per day.
He attributed the improvement to enhanced pipeline security, fiscal reforms introduced under the PIA, stronger partnerships with host communities and increased indigenous participation across the oil and gas value chain. Highlighting the turnaround in crude evacuation, Igiehon said, "When we came in during 2021, only three per cent of our production reached the export terminal. Today, we deliver between 95 and 100 per cent of production to the terminal."
Despite the progress, Igiehon warned that Nigeria's oilfield services sector remains fragmented and lacks the scale required to support future production growth. He called for strategic consolidation, improved financing and accelerated industrialisation to strengthen indigenous service providers and enable them to execute larger projects.
Also speaking, the Managing Director and Chief Executive Officer of Midwestern Oil and Gas Company, Elozino Olaniyan, said collaboration among indigenous operators has become increasingly important in reducing operating costs and improving efficiency. She explained that Midwestern and neighbouring operators have adopted a cluster model that allows companies to share infrastructure, operational risks and investment costs.
Olaniyan urged operators to deepen cooperation on crude evacuation, gas transportation, water disposal and other shared infrastructure, stressing that stronger partnerships would be essential to achieving Nigeria's long-term production goals. "The country is in transition, and the industry is in transition as well. A great deal of collaboration has already taken place, but much more will be required if Nigeria is to achieve its long-term production ambitions," she said.
The emergence of indigenous companies as the country's largest crude oil producers signals a new era for Nigeria's upstream industry, with local operators now expected to play a leading role in boosting production, expanding gas development and driving investment across Africa's biggest oil-producing nation.