A former Minister of State for Petroleum and Group Managing Director of the Nigerian National Petroleum Company Limited (NNPC), Prof. Ibe Kachikwu, has stated that Nigeria’s oil industry can only experience significant progress if the national oil company is insulated from political interference.
Speaking at the Nigerian Content Development Monitoring Board (NCDMB) Business Mentorship Series 2025, held online, Kachikwu emphasised that regulatory agencies and their leaders must also be appointed based on competence and nonpartisanship. He said overcoming the sector’s challenges requires vision, disciplined execution, and strong political will.
He explained that depoliticising the NNPC and regulators such as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) was critical. He also stressed the need to embrace technology, including automation, digital twin modelling, and artificial intelligence in exploration and production, as well as real-time pipeline monitoring to combat oil theft and predictive maintenance to extend the life of infrastructure.
“(There’s also a need to) reduce one of Africa’s highest operating costs per barrel by streamlining regulatory processes, cutting multiple taxation, and clustering marginal fields to achieve economies of scale (and) implement transparent procurement systems to eliminate inflated project costs. (Also) Provide certainty for investors by adhering to frameworks in the Petroleum Industry Act (PIA). Avoid frequent fiscal policy changes. Ensure licensing, royalties, and taxes remain predictable rather than driven by political expediency. Depoliticisation of governance: Insulate NNPC Limited and regulatory agencies from political interference. Appoint leaders based on competence, not patronage. This will improve accountability and institutional performance,” he said.
Kachikwu, who served as minister between 2015 and 2019 under former President Muhammadu Buhari, also highlighted the importance of addressing grievances in the Niger Delta, ensuring transparency in the Host Community Development Fund (HCDF), and investing in education, health, and infrastructure to build trust and reduce militancy. He called for modern security measures, including drones, satellite surveillance, and improved judicial processes to tackle oil theft, while urging closer engagement with host communities for intelligence gathering.
On attracting investments, Kachikwu said Nigeria must encourage both domestic and foreign investors through tax holidays for frontier basin projects, guarantees for risk capital, and ensuring ease of profit repatriation. He also recommended leveraging international green financing mechanisms to support energy transition goals while diversifying into renewable energy.
Reviewing the state of the sector, Kachikwu noted that Nigeria’s oil production fell from over 2.1 million barrels per day in 2017 to below 1.4 million bpd by 2023, with the country failing to meet its OPEC quota for 12 consecutive months in 2022. He attributed this decline to oil theft, underinvestment, regulatory uncertainty, aging infrastructure, and the global energy transition, which has shifted funding away from fossil fuels.
He observed that militant activity, such as attacks by the Niger Delta Avengers, worsened the situation, with oil theft costing the country over $2 billion annually. Meanwhile, divestments by international oil companies due to insecurity and environmental concerns created operational gaps that local firms could not immediately fill. The delayed passage of the Petroleum Industry Bill also discouraged long-term investment until the Petroleum Industry Act was signed in 2021.
Despite the challenges, Kachikwu pointed out that the industry is undergoing structural change, with Nigerian firms such as Seplat, Aiteo, Oando Energy Resources, and Heirs Oil and Gas taking over assets previously controlled by multinationals. However, he warned that the rollout of the PIA has been inconsistent, with overlapping regulatory mandates and fiscal shifts undermining investor confidence.
He noted that political interference still posed risks in licensing, project approvals, and fiscal policies, while issues such as multiple taxation, currency instability, fuel subsidy return under different arrangements, and import restrictions weakened the business climate. Nevertheless, he highlighted opportunities in projects like the Dangote Refinery, which is expected to reduce reliance on fuel imports and save foreign exchange.
Kachikwu advocated for the expansion of the Nigerian Content Intervention Fund (NCI Fund) from $450 million to $1 billion to finance major oil and gas projects, local manufacturing of critical equipment, and pipe mills. He advised the government to enforce strict timelines for oil block development and cancel undeveloped allocations, stressing that many awardees treat oil blocks as certificates of ownership without real investment.
He said: “We need to find a way to force performance in the industry. Some companies get contracts to import pipelines with proviso to invest locally. We need to begin to produce those equipment. You have to show the joint venture that you are setting up to produce pipes, where is the foreign partner with the funds and technology? You need to give a timeline.”
On global financing, Kachikwu maintained that Nigeria must improve its investment image, stressing that funds are available but flow only to countries perceived as stable and predictable. He urged the government to co-invest with private companies where projects show strong returns.
“There is enough investment money out there if you have a holding of hands. They need to portray Nigeria as the place where you can put money and get good returns,” he said.
