Nigeria sits on over 3.5 billion barrels of oil and condensate reserves that remain largely untapped, raising questions about missed economic opportunities and the country’s growing debt burden. Reports from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) show that much of the nation’s hydrocarbon wealth is still locked in undeveloped fields across various onshore and offshore basins.
Vast Reserves, Enormous Potential Value
At the current average oil price of $65 per barrel, Nigeria’s undeveloped oil and condensate reserves are valued at roughly $227.5 billion—equivalent to about N341.25 trillion at an exchange rate of N1,500 to the dollar. To put this in perspective, the total exceeds 600% of Nigeria’s 2025 budget of N54.9 trillion.
If fully exploited, the funds could finance massive infrastructural and social projects: over two million primary health centres at N150 million each, more than five million classroom blocks at N65 million each, or roughly 413,000 kilometres of roads at N825 million per kilometre.
Despite this potential, Nigeria’s fiscal reality remains challenging. The 2025 budget projects a deficit of N13.08 trillion, to be financed through domestic and external borrowing. Key allocations include N13.64 trillion for recurrent expenditure, N23.96 trillion for capital projects, N14.32 trillion for debt servicing, and N3.65 trillion for statutory transfers.
Rising Public Debt Amid Underdeveloped Resources
Nigeria’s growing reliance on borrowing is reflected in its escalating debt stock. According to the Debt Management Office, total public debt rose to N149.39 trillion by March 31, 2025, a 22.8% increase compared with N121.67 trillion in the same period of 2024.
The persistent debt accumulation is driven by new government borrowings and the depreciation of the naira, which has inflated the local currency value of external loans. Some of the nation’s untapped oil reserves have even been pledged as collateral for loans, highlighting the opportunity cost of leaving resources undeveloped.
Deepwater and Offshore Fields Largely Untapped
The NUPRC report revealed that 18.8 trillion cubic feet (TCF) of associated and non-associated gas remains in the ground, alongside vast oil reserves in deepwater fields. A breakdown of development status shows that 31.65% of deepwater oil and gas fields are undeveloped—the largest category—while only 12.25% are fully developed. A mere 5.10% of fields are at the stage of “development in view,” indicating limited ongoing projects.
Specifically, deep offshore oil and condensate reserves comprise:
- 1.7 billion barrels in developed fields (25%)
- 1.5 billion barrels where development is in view (23%)
- 52% in undeveloped fields
As of January 1, 2025, deepwater reserves accounted for about 19% of oil and 12% of gas reserves in Nigeria, yet 65% of discovered fields remain undeveloped. Development gas reserves stand at just 4.7 TCF, with 877 billion cubic feet currently undergoing development.
The Human and Economic Cost of Inaction
Experts argue that untapped reserves not only limit government revenue but also exacerbate reliance on imported refined petroleum products. Chronic crude shortages in domestic refineries, combined with a lack of investment in undeveloped fields, have forced Nigeria to import fuel to meet demand.
Speaking at the 50th anniversary of the Nigerian Association of Petroleum Explorationists, Bayo Ojulari, Group CEO of the Nigerian National Petroleum Company Limited, emphasized the urgency of transforming reserves into production. Represented by Udobong Ntia, Executive Vice-President of Upstream, Ojulari stated, “Our oil in the ground doesn’t matter to anybody. It has to convert to cash for the country to get the benefit that we need. We’ve had oil in the ground for so long… it’s time to begin to get the deals that will get the oil out of the ground.”
A Wake-Up Call for Strategic Development
Nigeria’s hydrocarbon wealth holds the promise of funding infrastructure, healthcare, education, and energy security. Yet, the current underdevelopment of oil and gas fields underscores a critical need for policy reform, private sector investment, and accelerated project execution. Without turning these reserves into production, the country risks perpetuating debt dependency while leaving billions of dollars in potential revenue stranded beneath its soil and seas.
Investors Urged to Access Reliable Data
Johnbosco Uche, President of the Nigerian Association of Petroleum Explorationists (NAPE), stressed that investors require comprehensive data to make informed decisions. He recommended that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) conduct bid rounds annually, arguing that regular licensing is key to boosting production.
“With the right data available to investors, the potential of our prolific basins will be apparent. The Niger Delta remains one of the most productive regions globally. By establishing an effective data room and showcasing these opportunities, we can attract serious investors,” Uche said.
He further proposed a flexible approach to bidding, suggesting that marginal fields could be opened in one year, followed by larger open blocks in subsequent rounds. “This is the only way to ramp up production and grow reserves toward the 40 billion barrels target,” he added.
Petroleum Industry Act and Investment Stability
Uche also noted that the Petroleum Industry Act (PIA), combined with NUPRC’s efforts, is fostering stability in the upstream sector. Several final investment decisions are reportedly underway, aided by executive orders from President Bola Tinubu.
“Annual bid rounds, combined with proper incentives and a segmented approach for held, relinquished, and frontier acreage, will keep the sector active and attractive to investors,” Uche emphasized.
Dormant Blocks Highlight Untapped Potential
According to NUPRC, 220 oil blocks across the country are currently dormant, pending periodic bid rounds and the fulfillment of specific conditions. These unlicensed blocks persist despite Nigeria’s mounting debt and ongoing crude shortages affecting local refineries.
Data from NUPRC shows that the deep offshore terrain alone accounts for 59 unlicensed blocks, underlining the country’s underexploited energy wealth in technically demanding but capital-intensive regions. The Benue Trough follows with 41 open blocks, the Chad Basin hosts 40, the Sokoto Basin has 28, and the Bida Basin 16. Even mature areas, including the offshore Niger Delta, still hold several idle blocks.
“The 220 oil blocks are not abandoned but await concessions as mandated by Section 7(t) of the Petroleum Industry Act 2021, which allows periodic licensing and grants Petroleum Prospecting Licences and Petroleum Mining Leases,” the NUPRC clarified.
Technology, Seismic Data, and the End of Easy Oil
Uche warned that the era of “easy oil” is over, stressing the need for advanced technology and new seismic data to unlock remaining reserves. “Without updated seismic information and modern technology, discovering new reserves in the Niger Delta will remain a challenge,” he noted.
Government Pressure on Idle Assets
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has also emphasized the need to activate dormant blocks. In April, he threatened to revoke licenses from owners who fail to develop their assets, urging international oil companies to increase investments in Nigeria’s sector.
“We cannot allow assets to remain idle for decades. They add no value to operators or to Nigeria. Collaborative measures such as shared resources, farm-outs, and releasing underutilized assets should be explored. Otherwise, we will reallocate these blocks to operators ready to work,” Lokpobiri stated.