Experts in the oil and gas industry have said that Nigeria could still secure a more sustainable oil and gas future if it gets governance right, enforces existing laws and restores confidence in regulation.
The experts, in separate interviews on Tuesday, December 30, 2025, in Lagos, said that the country’s biggest challenge was no longer the availability of oil and gas, but how the sector was managed.
They warned that weak institutions, policy inconsistency and poor execution continue to erode value in Africa’s largest energy producer, in spite of its vast hydrocarbon reserves.
According to them, 2026 will be a decisive year, as Nigeria faces a clear choice between strengthening institutional discipline or sliding back into discretionary, personality-driven governance.
Prof. Wumi Iledare, Prof. Emeritus of Petroleum Economics, Louisiana State University, said the outlook for the sector in 2026 would depend more on governance quality and regulatory discipline than on geology.
“Nigeria is richly endowed with petroleum resources, but sustainable value creation depends on faithful implementation of the Petroleum Industry Act (PIA), regulatory neutrality and credible leadership,” Iledare said.
He stressed that the industry does not need new laws or emergency interventions, but consistent enforcement of existing regulations.
“What the sector needs in 2026 is predictable regulation, institutional restraint and strict adherence to the PIA,” he said.
Iledare pointed to the absence of fully constituted governing boards for petroleum regulatory agencies as a major weakness in the current framework.
He explained that the PIA deliberately created boards for the Upstream Commission and the Petroleum Authority to ensure accountability, strategic oversight and protection against regulatory capture.
Without such boards, he warned, regulators risk becoming overly personalised and exposed to political and commercial pressure.
On upstream operations, Iledare called for urgent steps to halt declining production, including better asset security, faster project approvals and transparent fiscal administration.
He said divestments by international oil companies must be closely monitored to ensure technical competence, financial strength and environmental responsibility.
On the downstream, he explained Nigeria was going through a structural market transition rather than a market failure, urging regulators to enforce competition rules and remain neutral among dominant players.
He also advised government to step back from refinery operations and focus on creating a stable and predictable commercial environment.
“Refining is a business, not a sovereign obligation. It will only thrive if private investors operate on a level playing field,” he said.
Iledare added that the commercialisation of the Nigerian National Petroleum Company Ltd. (NNPC Ltd.) would remain incomplete if balance-sheet discipline is replaced by repeated fiscal bailouts.
“Institutions, not improvisation, must guide the sector in 2026,” he said.
In a similar view, Dr Ayodele Oni, Partner and Chair of the Energy and Natural Resources Practice Group at Bloomfield Law Practice, said 2026 should be defined by policy stability and effective implementation.
He said crude oil production could rise toward the Nigerian Upstream Petroleum Regulatory Commission’s target of 2.5 million barrels per day from the current 1.7 million barrels per day to 1.83 million bpd, but only with coordinated action across regulatory, operational and security fronts.
Oni noted that indigenous producers, following asset divestments by international oil companies, now carry greater responsibility for sustaining output and would require government support through financing frameworks, timely approvals and fiscal incentives.
On the downstream sector, he projected modest gains in domestic refining driven by the Dangote Refinery and modular plants, but cautioned that progress depends on enforcing Domestic Crude Supply Obligations.
He also said cleaner fuels such as compressed natural gas, liquefied natural gas and liquefied petroleum gas are likely to gain wider adoption in 2026.
On security, Oni said crude theft and pipeline vandalism continue to drain production, urging operators to strengthen environmental, social and governance practices to reduce community tensions.
Responding to governance concerns, Mr Andy Odeh, Chief Corporate Communications Officer of NNPC Ltd., said the company operates under a best-practice governance framework established by the PIA.
He said NNPC Ltd. runs transparent procurement processes, maintains board oversight of major contracts and applies commercial, arm’s-length crude allocation systems.
Odeh added that legacy joint-venture cash call arrears have been cleared through pre-funded budgets, while the company’s accounts are audited by international firms and overseen by statutory institutions.
On refineries, he said reviews of NNPC’s four refineries are ongoing, with plans to disclose technical and equity partners to reposition the assets on a commercial footing.
By Yunus Yusuf