OPINION/ANALYSIS

By Emeka Eboagwu

Part One of a Three-Part Series Supporting the Presidential Petroleum Reform and Value Optimisation Taskforce

The creation of the Presidential Petroleum Reform and Value Optimisation Taskforce signals that Nigeria is entering a new phase in the evolution of its petroleum sector. Having completed one of the most significant governance restructurings in the industry through the Petroleum Industry Act, attention is now shifting from institutional reform toward operational performance.

The central challenge before the reform committee is therefore not simply how to refine policy. The real task is ensuring that Nigeria’s petroleum investment cycle from exploration to production moves faster, more predictably, and with greater strategic alignment.

This article is the first in a three-part series intended to contribute constructively to that effort. The objective is to highlight practical mechanisms through which the reform team can accelerate sector outcomes quickly. This first article focuses on aligning exploration activity, drilling capacity and project execution, which together form the core investment cycle of the petroleum industry. The second article will examine financial engineering mechanisms that can unlock large-scale capital flows into the sector. The third will address long-term industry sustainability within Nigeria’s evolving global energy context.

Nigeria’s petroleum sector already has a modern governance framework. The institutional structure established by the Petroleum Industry Act (PIA) aligns with widely accepted global standards. Commercial participation in upstream projects is now managed by the Nigerian National Petroleum Company Limited. Upstream regulation is overseen by the Nigerian Upstream Petroleum Regulatory Commission, while midstream and downstream infrastructure are under the jurisdiction of the Nigerian Midstream and Downstream Petroleum Regulatory Authority. The division of commercial and regulatory functions enhances transparency and helps to reduce institutional conflicts that have historically complicated sector governance.

However, institutional design alone does not ensure sector performance. Institutional theory suggests that the success of governance structures ultimately depends on how institutions work together. The speed at which decisions are made across organisations, the coordination of approvals, and the ability to resolve operational bottlenecks all affect investment rates.

Nigeria’s deepwater development history clearly demonstrates this. Projects such as Bonga, Agbami, and Egina required coordination among operators, international partners, the national oil company, the upstream regulator, and midstream infrastructure authorities. Each institution operated within its statutory mandate, yet approvals often occurred sequentially rather than simultaneously. This led to prolonged project durations. Offshore developments in Nigeria frequently take 8 to 12 years from discovery to first oil, with several projects requiring more than six years between field development approval and production. These timelines remain among the longest in the offshore industry.

At the same time, exploration activities have slowed significantly. Nigeria’s proven reserves currently stand at approximately 37Billion barrels, below the long-standing national goal of reaching 40Billion barrels. Without renewed exploration momentum, future production will increasingly rely on mature fields already in natural decline. The causes of this slowdown are often misunderstood. Nigeria’s geological potential remains substantial. The deeper structural issue lies in the design of the exploration ecosystem itself.

One of the least discussed constraints is drilling capacity. Nigeria does not fully control its pace of exploration. Exploration drilling remains largely dependent on the global rig market. When drilling demand increases in regions such as Brazil, Guyana, the United States Gulf of Mexico, or the Middle East, rigs move to those higher-margin basins. When global demand weakens, rigs return to Nigeria, often at higher costs and with long mobilisation delays. This dependence on external drilling cycles creates an irregular exploration rhythm that undermines reserves replacement and long-term planning. Exploration campaigns are postponed, drilling programmes become inconsistent and the overall investment cycle slows.

These challenges-declining exploration activity, dependence on volatile rig markets and extended project development timelines are frequently treated as separate issues. In reality, they are symptoms of a single structural weakness: Nigeria’s petroleum investment cycle is misaligned. Exploration does not feed seamlessly into drilling. Drilling does not transition efficiently into development. Development does not move quickly enough into production.

Nigeria, therefore, needs a mechanism to align exploration policy, drilling capacity, and project execution within a coherent national strategy. Such a mechanism should not create additional bureaucracies; instead, it should act as a coordination tool that synchronises institutions and stabilises the investment cycle.

One possible solution and an important toolkit for the reform team would be the creation of a National Exploration and Drilling Acceleration Programme (NEDAP)

This programme would not replace existing institutions. Its purpose would be to connect them. Anchored within the Presidency and implemented in coordination with sector regulators and industry stakeholders, the programme could serve as the strategic platform through which exploration, drilling and project development move in a coordinated and predictable manner.

Its main responsibility should be to establish a continuous national exploration pipeline that identifies priority basins, planned drilling campaigns, and projected timelines over several years. Such a pipeline would give investors greater visibility and help Nigeria transition from sporadic exploration efforts to a well-organised national exploration strategy.

Its second responsibility would involve stabilising drilling capacity through commercially structured joint ventures between the Nigerian National Petroleum Company (NNPC) and international drilling contractors, as seen with other International Oil Companies (IOC) and NOCs investing in drilling capacity (TOTAL-Vantage JV; ARAMCO-ARO, Arabian Drilling Co). These partnerships could anchor exploration rigs within Nigeria’s basins, providing predictable access to drilling infrastructure and reducing dependence on volatile global rig markets. These arrangements would remain commercially driven rather than state-operated, thereby avoiding the inefficiencies historically associated with government-owned drilling fleets.

A third function would involve developing an exploration-to-development acceleration framework that synchronises regulatory approvals across the upstream regulator, midstream infrastructure authorities, and commercial partners, including Nigerian National Petroleum Company Limited. This approach does not weaken regulatory oversight; it enhances it by ensuring approvals occur in parallel rather than sequentially.

Encouragingly, we see strong production traction in the onshore Niger Delta, but it will be hard work to find any of the parties here to deliver 100,000 Bbl./day of incremental production in the next three years.  Nigeria’s upstream sector is already beginning to regain investment momentum. Several major projects are progressing towards final investment decisions that could transform the country’s production outlook. Among the most notable are Bonga North, the long-awaited Bonga Southwest–Aparo, the Zabazaba–Etan Project, the Owowo Field, and the Ubeta Gas Field. Collectively, these developments represent tens of billions of dollars in potential investment and a significant opportunity to revitalise Nigeria’s offshore production base.

Ensuring these projects progress smoothly from approval to production will be a crucial test of Nigeria’s reform momentum. The global upstream landscape is becoming more competitive. Capital is moving towards jurisdictions that offer predictable project timelines, stable regulatory environments, and reliable operational infrastructure.

Nigeria possesses the geology, the technical expertise and a modern governance framework. What remains is operational alignment. The industry must be able to move efficiently from discovery to production.

The Presidential Petroleum Reform and Value Optimisation Taskforce therefore has an opportunity not only to refine policy but also to strengthen the operational foundations of Nigeria’s petroleum system. By aligning exploration activity, drilling capacity and project execution within a coherent national framework, the reform effort can accelerate sector growth while reinforcing investor confidence.

“Exploration drilling remains largely dependent on the global rig market. When drilling demand increases in regions such as Brazil, Guyana, the United States Gulf of Mexico, or the Middle East, rigs move to those higher-margin basins. When global demand weakens, rigs return to Nigeria, often at higher costs and with long mobilisation delays. This dependence on external drilling cycles creates an irregular exploration rhythm that undermines reserves replacement and long-term planning. Exploration campaigns are postponed, drilling programmes become inconsistent and the overall investment cycle slows.”

Ultimately, Nigeria’s petroleum reforms will be judged not by the institutions established or the policies declared, but by how swiftly discoveries are turned into producing fields and by unlocking the industry’s true potential for national growth.

Emeka Eboagwu, Ph. D, CMILT, fACSC, is a global social sustainability expert and energy economist based in the United Kingdom whose work focuses on petroleum sector governance, supply chain sustainability and energy policy reform.

Contact: eeeboagwu@gmail.com