The Strategic Shift in Nigeria’s Oil and Gas Sector
Nigeria’s oil and gas sector is at a critical juncture, with its marginal fields playing a pivotal role in driving growth and maintaining upstream activity. These smaller, often undercapitalized fields, particularly in shallow waters, hold significant potential. However, the main challenge lies not in the geological aspects but in the fragmentation of operations.
Fragmentation and Its Consequences
Marginal fields in Nigeria are primarily managed by indigenous companies that pursue parallel strategies, leading to competition for capital, technology, and talent. This competition results in redundant investments, suboptimal recovery rates, and limited scalability. Instead of fostering more competition, the sector requires a shift towards cooperation and a long-term investment outlook.
Shared Infrastructure, Shared Value
The current model of asset duplication—where each operator independently invests in logistics, facilities, and maintenance—is both financially and operationally inefficient. A shared infrastructure model can significantly reduce the cost per barrel and enhance the longevity of assets. Value creation becomes the strategic focus rather than asset control.
An example of this model is the 48Km pipeline from Umutu to Kwale in Delta State, developed as a joint venture between Platform Petroleum and Newcross Petroleum. Indigenous joint ventures can create more bankable projects, unlock blended finance models, and attract ESG-linked capital. Scale is no longer just a metric—it’s a signal of potential.
Another notable example is the Otakikpo onshore terminal in OML 11, completed in 2025. Developed by Green Energy International, this facility is the first indigenous construction in the country in five decades. With a storage capacity of 750,000 barrels—expected to rise to three million based on market demand—and an export capacity of 360,000 barrels per day, the terminal reduces operating costs for marginal fields. It is expected to unlock previously stranded resources from up to 40 marginal fields, highlighting the value of shared infrastructure in Nigeria.
Strengthened Policy Framework
The recently passed Petroleum Industry Act (PIA) marks a significant transformation for Nigeria’s energy industry. By promoting transparency, streamlining regulations, and reforming tax and royalty structures, the PIA creates a more attractive environment for global investors. Importantly, the PIA addresses marginal field development by providing a clear licensing framework and resolving legal ambiguities. With the PIA in place, Nigeria’s energy sector is well-positioned for a revival, enabling the country to better meet its domestic needs, including reliable electricity and economic growth.
From Possibility to Practice: Building the Architecture for Collaboration
When operators share more than just facilities—when they exchange insights, talent, and lessons learned—sector-wide operational resilience improves. Peer-to-peer learning reduces downtime, enhances safety practices, and fosters innovation. In high-risk environments, agility is a competitive edge.
To turn this vision into reality, indigenous firms must move beyond handshake agreements to structured partnerships. These partnerships should include strong governance models featuring transparent rules for decision-making, risk-sharing, and conflict resolution. The use of neutral operators—third parties managing shared infrastructure—ensures fair access, while structures like joint operating agreements help formalize roles, reduce costs, and enhance performance.
In this scenario, government regulators have a crucial role to play. By offering fiscal incentives, easing licensing for consortia, and prioritizing collaborative proposals, they can transform policy into tangible progress.
The Future Belongs to the Connected
The next chapter of Nigeria’s upstream oil industry will not be shaped by solitary operators, but by those who recognize that collaboration is not a compromise, but a competitive advantage. In an era of tighter margins, increasing stakeholder expectations, and declining investment in fossil fuels, the old model of isolated operations is no longer sustainable.
Marginal fields represent more than untapped reserves—they are an opportunity to reimagine how indigenous oil and gas companies create value. By sharing infrastructure, pooling resources, and aligning strategies, local operators can unlock performance at scale, attract investment, and meet rising ESG standards with credibility.
This is not just a call to cooperate—it is a strategic imperative. The future will favor those who embrace a new mindset: one that values partnership over ownership, ecosystem thinking over individual ambition, and shared impact over siloed success.
