Indigenous companies now account for over half of national oil and gas production, ending a 70-year dominance by international majors.
In a watershed moment for Nigeria’s petroleum industry, local oil companies have officially overtaken international oil majors in production volume—marking a historic shift in a sector long dominated by foreign operators. For the first time since commercial oil production began in 1956, indigenous producers now contribute more than 50 percent of the country’s total oil and gas output.
This development, reported in early February 2026, represents more than just a change in numbers. It signals a structural transformation in Nigeria’s energy landscape—one that reflects decades of policy reform, strategic asset transfers, and the rising competence of local operators.
A Historic Turn in the Oil Output Race
The milestone was highlighted at the Nigerian International Energy Summit in Abuja by Adegbite Falade, chairman of the Independent Petroleum Producers Group (IPPG), who noted that indigenous producers and independent operators now account for more than half of national production. This, he said, marks a “historic transformation in the structure and control of Nigeria’s oil and gas sector.”
The shift comes after years of divestment by multinational oil companies, which have gradually sold off onshore and shallow-water assets. The pace of these sales accelerated recently, with global majors such as Shell, ExxonMobil, TotalEnergies, and Eni increasingly opting to exit mature fields. In many cases, these assets were transferred to capable local operators who have since revitalised production through targeted investments and localised management.
Divestments: The Engine of Change
Divestments have played a pivotal role in reshaping the production landscape. Since multinational companies began exiting certain segments of Nigeria’s upstream sector, local firms have injected new life into previously under-performing assets. The transition has already added approximately 200,000 barrels per day (bpd) to national output.
Some of the most notable transformations include:
- Renaissance Energy, the consortium that acquired Shell’s onshore subsidiary in March 2025, has reported substantial production gains, in some cases doubling output after acquisition.
- Seplat Energy, which acquired ExxonMobil’s onshore and shallow-water licences for $1.3 billion in 2024, has strengthened its position as a leading indigenous producer.
- Oando, which purchased four onshore blocks from Eni for $783 million, has announced plans to invest up to $2 billion by 2030.
- Other indigenous operators such as Heirs Energies, Aradel Holdings, and Waltersmith have also revitalised fields including OMLs 4, 17, 18, 38, and 41.
These firms have demonstrated operational agility and resilience—qualities that many analysts say were underestimated during earlier debates about the capability of local operators. By adopting more responsive decision-making, improving community relations, and prioritising security and infrastructure investment, many indigenous companies have exceeded production expectations.
Government Support and Industry Reforms
The rise of indigenous operators has been supported by policy and regulatory reforms, particularly under the Petroleum Industry Act (PIA). Improvements in security and initiatives such as “Project One Million Barrels” have also helped to stabilise and boost national output.
Nigeria’s crude production rebounded significantly in 2025, averaging between 1.47 and 1.6 million bpd—the highest level seen in five years. Despite ongoing challenges such as pipeline theft and ageing infrastructure, the local firms’ rising share of production has been a major driver of this recovery.
The government has set ambitious targets: 2.5 million bpd by 2027 and 3 million bpd by 2030. Achieving these goals would position Nigeria among the world’s leading oil producers, underscoring the significance of this new indigenous-led growth.
Gas Production Also Shifts to Local Hands
The shift is not limited to crude oil. Indigenous firms have also made significant inroads in gas production, at times surpassing international companies. This trend supports Nigeria’s broader strategy of gas-based industrialisation and reduced gas flaring—key priorities for the country’s energy transition ambitions.
What This Means for Nigeria’s Future
The growing dominance of local firms carries broad economic implications. More revenue, expertise, and jobs are now retained within Nigeria, strengthening national capacity and reducing dependence on foreign operators. As international majors increasingly focus on deeper offshore assets or international projects amid energy transition pressures, local firms have stepped into the vacuum and delivered results.
Yet, the path ahead is not without obstacles. Sustaining security, securing long-term financing, ensuring environmental accountability, and maintaining transparent governance remain critical challenges. The success of indigenous operators will depend on continued regulatory clarity, investment incentives, and a stable operating environment.
A New Era for Nigeria’s Oil Sector
After seven decades of international dominance, Nigeria’s oil industry has entered a new era of local leadership. The “output race” is no longer merely about production volumes—it is now about who controls the future of one of Africa’s most important resources.
This landmark shift is not just a milestone in production statistics; it is a turning point in national sovereignty, economic empowerment, and industry confidence. As Nigeria moves forward, the rise of indigenous operators may prove to be the defining story of the country’s energy renaissance.