In creating this 12 months’s outlook, we referenced the 2015 model to discover vital developments in the important thing gadgets over the final 10 years.
What we discovered was some accuracy on a number of the key gadgets, however general, it may be pretty concluded that the oil and fuel business in Nigeria had skilled a misplaced decade till 2024/25.
A lot of the initiatives anticipated are nonetheless being mentioned.
The business has undergone a CPR within the final two years as evidenced by the secure and improved fiscal regime, a soother working local weather, elevated manufacturing, M & As and a flurry of Remaining Funding Choices (FIDs).
On this outlook, we’ve highlighted key points that would form the oil and fuel business in Nigeria in 2026.
1. Crude Oil Manufacturing
In line with the upstream regulator, NUPRC, Nigeria’s crude oil and condensate manufacturing averaged 1.64 million barrels per day for many of 2025, a 6% improve from 1.58mmbopd recorded in 2024. A 6% annual progress is an outlier amongst peer oil-producing nations as a result of the standard progress fee is between 1-3% for nations that handle to extend manufacturing.
Nigeria’s outlier efficiency may be attributed to asset restoration efforts, higher working local weather, efficiency of NNPC E & P Restricted and the settling in of the successors of SPDC and Exxon within the onshore/shallow water fields.
What does this forebode for 2026? The clue is within the 2026 – 2028 MTEF doc accredited by FEC in December 2025, the place a benchmark and goal manufacturing of 1.8 mmbbls/day and a couple of.06mmbls/day, respectively, have been established. The benchmark has been very reasonable in comparison with earlier years, however nonetheless anticipates a ~10% manufacturing progress, which remains to be fairly an elevated goal.
The business is in an excited state – rig depend is on the highest, service corporations are busy, Unique Tools Producers are absolutely booked, and with 79 Subject Improvement Plans (FDPs) accredited by the regulator in 2024/2025, manufacturing might be on the incline baring any vital social headwind. It’s, nonetheless, necessary to handle expectations a couple of massive upswing, however slightly anticipate a easy however regular uphill journey.
2. NNPC Asset Divestment Program
One of the vital fascinating occasions within the business in 2026 is the anticipated divestment by NNPC of a few of its fairness in sure property. Numerous credible media retailers have reported {that a} portal has been open for bidders who have to register on-line by January 10.
That is anticipated to be adopted by a sequence of processes that embody pre-screening and entry to a safe digital knowledge room. There might be a prequalification based mostly on technical and monetary capability, doc analysis, negotiations and regulatory approvals.
Reuters has reported a proposed sale of as much as 25% whereas the Labour Union had protested the sale in late 2025, the place they indicated the divestment might be round 30 – 35% fairness. It’s tough to establish what the precise divestment phrases and situations can be – full divestments or partial stake reductions, however the end result will reshape the Nigerian oil and fuel business.
It’s easy to venture that current JV companions could also be and even prioritised if the standard Proper of First Refusal that’s customary in world joint ventures is relevant.
We’ve witnessed a consolidation of shareholders within the Renaissance Vitality shareholding construction by way of Aradel/ND Western. Are they now higher positioned to amass extra fairness? With Maurel & Promenade out of the image in Seplat, what occurs to the ex-Exxon-owned onshore fields?
Will the money wealthy center japanese NOCs and sovereign wealth funds (ADNOC/PIF/ONHYM) deploy money to take fairness for strategic causes? Since NNPC is a restricted legal responsibility firm, how will it deploy its new capital? The result of the divestment will not be identified however it’s fairly simply predictable that it’s going to deliver a major change to the construction of Nigeria’s oil and fuel business?
3. NUPRC’s Bid Spherical
To strengthen the misplaced decade phenomenon, Nigeria didn’t conduct a bid spherical for fifteen years (2005 – 2020), resulting in the present low manufacturing ranges and consequential financial challenges. Since 2020, Nigeria has now had 5 NUPRC bid rounds, together with the 2025/26 spherical, which consists of 15 onshore blocks, 19 shallow-water blocks, 15 frontier acreage blocks and 1 deep offshore block.
Not like the 2022 bid spherical, this spherical has extra onshore/shallow water blocks, which is able to spark extra curiosity from native operators. Signature bonuses are anticipated to vary from US$3 million to US$7 million, amongst different monetary obligations. The bids might be open to Nigerian and international corporations by way of a Nigerian entity and the designated operator in a consortium should maintain a minimal of 30% collaborating curiosity.
With NNPC additionally on the cusp of a divestment marketing campaign, this bid spherical may not achieve the anticipated traction in comparison with the 2022-2024 class. NNPC’s fairness sale could also be extra premium priced, but it surely comes with obtainable infrastructure, fast money stream and potential near-term upside, whereas the NUPRC 2025/26 fields will nonetheless require investments and longer lead time.
Current operators proximate to those PMLs within the bid spherical could also be extra inclined to bid to reap the benefits of synergies. IOCs could also be within the frontier property on the japanese flank/Dahomey basin however take much less curiosity within the northernmost PMLs and with the deepwater blocks very restricted, it will likely be fascinating to observe their participation.
4. Crude Oil Value
There’s a consensus that crude oil costs in 2026 will stay within the decrease vary of 2025’s costs – $55 – $60 per barrel. The EIA and IEA, that are sometimes dovish on oil costs, are sticking to a mean of $55/barrel whereas the market, as reported by Reuters counsel a mean of $61 per barrel.
The anticipated surplus manufacturing of round 3.8 million barrels per day reinforces the oversupply narrative, and as witnessed in 2025 through the US bombing of Iran, the market is in its most inelastic state in a technology. Provide and demand outlook is pretty properly established, however costs have remained impartial to vital geopolitical occasions involving main producers like Russia, Iran.
With the elevated instability within the Center East, we may even see short-term worth spikes or volatility, and then again, if inventories construct too excessive or if the worldwide economic system softens and demand underperforms additional, costs may dip beneath $50/barrel.
OPEC and OPEC+ manufacturing cuts could assist stymie oversupply as from Q2 and assist preserve costs elevated. Present crude oil costs are past the $60/barrel finances benchmark leaving manufacturing goal of 1.8mmbbl/day because the seemingly lagging variable within the fiscal plans for 2026.
5. The Africa Vitality Bank
All issues being equal, the Africa Vitality Bank ought to begin formal operations in 2026 after a delay in assembly capitalisation commitments and governance procedures.
The bank is designed as a multilateral improvement finance establishment with an preliminary goal capital base of about USD 5 billion, with members from APPO member nations and help from AFREXIM. Considerations about the way forward for AFREXIM are across the change in management in each AFREXIM and APPO.
The erstwhile leaders of each organisations have been Nigerians, a rustic with substantial oil and fuel assets, extra vulnerable to the debt constraint that comes with power transition.
The progress made on the operationalization of the Vitality Bank in 2026 will inform NLNG if the brand new CEOs of APPO and AFREXIM have the motivation to see by way of the operationalization of the Vitality Bank.
6. NLNG
NLNG have been the one largest sufferer of the ‘misplaced decade’ as a result of it’s solely depending on upstream manufacturing efficiency. As per the NLNG annual Information and Figures printed in 2024, NLNG’s income dropped by 45% from $10.79Billion in 2014 to $5.840Billion in 2023 with dividends to NNPC/Nigeria dropping by 40% from $1.389 Billion to $820 Billion.
Utilisation fee diminished to as little as 65%, however as per media experiences, NLNG has exported the very best variety of cargoes in its current historical past in December 2025. If the incline in crude oil manufacturing continues and a number of the Fuel Gross sales and Buy Agreements it executed in 2025 begin provide, NLNG could bounce again from its current torrid previous regardless of muted LNG costs.
7. Fuel Infrastructure
Nigeria’s Fuel Grasp Plan and the Decade of Fuel program, at its core, is concentrated on creating essential fuel infrastructure corresponding to pipelines, fuel processing services, and liquefied pure fuel (LNG) crops to extend manufacturing, processing, and improvement of fuel throughout the nation.
In 2026, the primary section of the 614km Abuja-Kaduna-Kano (AKK) pipeline is anticipated to be accomplished, with fuel flowing to the northern a part of the nation. The Oben/Obiafrom – Oben pipeline completion has been delayed by the crossing of the River Niger. It’s tough to venture whether or not that technical problem may be overcome in 2026.
With Seplat, a gas-focused firm nested within the easternmost flank of the Niger Delta, anticipate traction round a transmission line that might take away fuel from that stranded axis.
The Midstream Fuel Infrastructure Fund (MDGIF) has raised over $400 Million since 2021, with its disbursement largely on micro initiatives. In 2026, it’s anticipated that investments could shift to larger-scale and extra giant scale and impactful initiatives that may drive the fuel aspirations of the nation. As fuel flare penalties chew and CAPEX for greenfield fuel crops turn into extra prohibitive, 2026 would be the 12 months the fuel hub improvement anticipated within the 2008 Fuel Grasp Plan takes form.
8. Dangote Refinery and gas importation
Aliko Dangote desires to cease the importation of petroleum merchandise, notably PMS. Importation won’t cease in 2026 or within the foreseeable future. As per NMDPRA’s December 2025 Reality Sheet, the Dangote refinery operated at 62.94% with a mean day by day provide of 32million liters per day.
In comparison with the established nationwide PMS consumption fee of about 50 million litres (seasonal Dec. 2025 demand was 62 million litres), there’s a large hole that should be crammed by imports to keep away from queues or insufficient Inventory Sufficiency.
To make sure power safety, PMS Inventory Sufficiency of over 30 days is the baseline, however the home refiners can’t meet that requirement in the intervening time. Dangote has to considerably enhance its utilization charges to satisfy world customary of 90 – 95% to bridge the hole that importers are filling.
As for the 15% advert valorem levy on gas imports that was accredited in October 2025 however later suspended, it’s unlikely to be returned with the present inadequate home provide and the Presidential elections scheduled for subsequent 12 months.
9. Consolidation, M & As within the Downstream Sector
All the downstream corporations listed on the Nigerian Inventory Trade posted disappointing leads to 2025 indicating a major structural sector shift largely because of the Dangote refinery. Past the NGX, downstream corporations are going through robust headwinds with the aggressive pricing surroundings and menace of fiscal boundaries, notably for these with their services within the South-West of Nigeria.
The additional downstream corporations are from the Lagos axis, the higher their margin. For downstream corporations with jetties within the South-South, the transport premium ex-Lagos has helped retain a few of their margins.
Consolidations will occur ahead of later for downstream corporations which might be uncovered to the worth warfare within the Lagos axis by way of acquisitions, merger of strategic partnerships with Dangote. We can also witness pivots from core downstream companies as NIPCO did sooner than others by shifting assets from downstream gas merchandise to downstream fuel and compressed pure fuel. If the 15% advert valorem levy is reinstated, we could even witness faster consolidations as margins for importers get squeezed. It absolutely gained’t be a boring 12 months within the downstream sector.
10. Key Trade Studies
To maintain a pulse on the business, there are key business experiences that present helpful perception for stakeholders:
NNPC Month-to-month Report, which offers info on Complete nationwide oil and fuel manufacturing; NNPC fairness manufacturing, JV manufacturing, PSC manufacturing, manufacturing losses, standing of fuel pipeline development, income, revenue after tax, statutory funds, upstream pipeline availability, gas merchandise availability.
NMDPRA Month-to-month Reality Sheet: It is a market-monitoring and regulatory snapshot, which focuses on provide adequacy, infrastructure, pricing, and compliance. It offers info on petroleum merchandise provide & sufficiency, nationwide inventory ranges, provide sources (Imports, native refineries), importation knowledge, depot & terminal operations, worth ranges by area, infrastructure Standing (refineries operational standing, nameplate vs act, pipelines).
NUPRC Annual Report: Offers an authoritative account of Nigeria’s upstream oil and fuel sector for a full 12 months and it covers regulatory, technical, and financial initiatives through the 12 months.
It offers perception into complete nationwide oil and fuel manufacturing with breakdown by terrain (onshore, shallow offshore and deepwater); contracts sort (PSC, JV Sole and threat / marginal fields); fuel oroduction & utilisation (AG & NAG, Fuel utilisation vs flaring, Fuel equipped to Energy, LNG, Home industrial/industrial customers, Fuel reinjection volumes; crude Oil & Fuel Reserves; Licensing & Acreage Administration, Price, Fiscal & Income Knowledge; Host Communities Improvement Trusts (HCDTs); Crude Oil Theft, Losses & Safety.
Conclusion
2026 is anticipated to be a very thrilling 12 months for the oil and fuel business, and this outlook is supposed to offer steerage to buyers, service suppliers, regulators, authorities businesses. See you in 2027.
- Adedamola Adegun is the Head of the Fuel Business and Non-Oil Unit at NNPC E&P LIMITED (NEPL),