Nigeria’s domestic oil and gas producers have increased their share of national crude output to 27% from 12% a decade ago and are preparing about $35bn in new investments to help lift production towards the government’s 3mn barrels per day (bpd) target by 2030, The Punch writes, citing a report by Wood Mackenzie.

According to the global energy consultancy, local operators are emerging as the main force behind the recovery of Nigeria’s upstream sector after years of declining investment and lower production.

The findings were presented during the consultancy’s Nigeria Executive Briefing in Lagos, where industry executives reviewed the growing influence of domestic firms following the divestment of onshore and shallow-water assets by international oil companies.

Nigeria’s liquids production has fallen from more than two million barrels per day 10 years ago to about 1.6mn b/d currently, largely because of weaker investment activity. According to the report, local companies have helped stabilise output through field redevelopment, post-acquisition investment programmes and increased activity in marginal fields.

Wood Mackenzie said more than 100 domestic operators are now active in Nigeria’s upstream sector, giving the country Africa’s most diverse corporate landscape. It added that local firms have benefited from flexible operating structures, stronger ties with regulators and the state-owned Nigerian National Petroleum Company Limited, and a greater willingness to operate in higher-risk environments.

The consultancy identified Renaissance Africa Energy and Seplat Energy as the continent’s leading domestic producers, noting that Nigerian firms account for eight of Africa’s top 10 independent upstream operators. Combined, Nigerian independents represent about $12bn in market value, or roughly 75% of the African independent producer peer group.

Wood Mackenzie said joint ventures involving Renaissance, Seplat and Oando are planning around $35bn in greenfield and brownfield developments aimed at increasing output capacity. It added that recent presidential directives to accelerate gas development could create additional opportunities for domestic firms, which collectively hold around one-third of Nigeria’s gas reserves.

Despite the momentum, the consultancy warned that financing remains the sector’s biggest challenge. Many operators are managing ageing and depleted fields without strong balance sheets, while Nigeria’s operating costs, averaging nearly $15 per barrel of oil equivalent, remain the highest in Africa.

The report also cautioned that delays in project approvals, security concerns and operational risks could deter investment unless reforms continue. While international oil company divestments are nearing completion, Wood Mackenzie said major energy groups are not abandoning Nigeria entirely but are instead focusing on deepwater and gas projects linked to the Nigeria LNG value chain.

It highlighted the approval of Shell’s Bonga North project in late 2024 as Nigeria’s first deepwater final investment decision in more than a decade, with other offshore projects expected to follow.