Naija247news reports that Nigeria’s oil and gas sector is entering a fresh phase of reform-driven growth, powered by the implementation of the Petroleum Industry Act (PIA), rising capital expenditure, and increasing participation by indigenous operators.
This development is highlighted in a new report by Renaissance Capital Africa, which outlines how regulatory clarity, infrastructure investments, and heightened rig activity are positioning the industry for a sustainable medium-term recovery.
Naija247news gathered that oil production, which peaked at 2.4 million barrels per day in 2005, had declined sharply over the years due to underinvestment, insecurity, and the impact of the COVID-19 pandemic. Output fell from 1.74 million barrels per day in 2019 to a low of 1.14 million in 2022.
However, Naija247news understands that a rebound is underway. Active rig counts, seen as a leading indicator of upstream activity, rose from the low 30s in early 2024 to around 40 by September 2025, signaling growing investor confidence.
According to Naija247news, the Petroleum Industry Act has been central to this revival. The law streamlines Nigeria’s legal and regulatory framework, introduces investor-friendly tax incentives, and establishes independent regulatory bodies for both upstream and downstream operations.
“The PIA lowers effective tax rates and protects investors from retroactive fiscal changes,” Renaissance Capital noted in the report. “This enhances predictability and boosts Nigeria’s attractiveness relative to its African peers.”
Naija247news reports that the shift in ownership dynamics is also notable. International oil companies (IOCs) have continued divesting from onshore assets, enabling local firms to take the lead in exploration and production. This trend aligns with the government’s agenda to deepen indigenous participation and local content in the sector.
In addition, major infrastructure projects such as the Dangote Refinery and new gas pipeline developments are reshaping Nigeria’s midstream landscape. Policy directives introduced between 2024 and 2025, including fast-tracked project approvals and tax holidays for gas infrastructure, are aimed at boosting efficiency and competitiveness.
Naija247news understands that Nigeria’s light, sweet crude remains in high demand, and with the Dangote Refinery now operational under the Domestic Crude Supply Obligation, refined fuel imports are expected to drop significantly, enhancing forex stability.
Renaissance Capital projects that with continued policy stability, production could surpass two million barrels per day by 2026, stabilizing fiscal revenue and strengthening Nigeria’s external reserves.
Naija247news also gathered from Nairametrics that the Nigerian oil and gas sector recorded over a 5% gain in early October 2025, with the NGX Oil/Gas Index climbing from 2,523.1 points to 2,664.0 points by October 8.
This rally, driven by stocks such as Aradel, Seplat, and Eterna, signals renewed investor optimism and marks a rebound from a long decline since its December 2024 high of 2,712 points.
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Reporting by Agnes Ekebuike Editor, Naija247news in Lagos, Nigeria.
