The federal government has expressed optimism about the future of Nigeria’s oil and gas sector, projecting an additional $2 billion in investments by the end of the first quarter of 2025. This announcement comes just months after Shell began developing the $5 billion Bonga North deepwater project. But how realistic are these claims, given Nigeria’s history of stalled projects and unfulfilled investment promises?
In addition to the oil sector boost, the government also plans to restructure its massive electricity subsidy, arguing that the current system disproportionately benefits the wealthiest 25% rather than low-income households. While this proposal suggests an effort to ensure fairness, critics may question whether the government has the political will and capacity to implement a truly equitable reform.
The federal government acknowledges that Nigeria has not seen major investment in deepwater oil projects since TotalEnergies’ Egina project in 2013. However, officials claim that President Bola Tinubu’s Executive Orders 40, 41, and 42—issued in February 2024—have marked a turning point by reducing project execution timelines, cutting production costs, and making Nigeria more competitive in the global oil market.
Olu Verheijen, Special Adviser on Energy to the President, stated in an interview with Energy Year that Nigeria is now among the top three most attractive deepwater investment destinations, having previously ranked ninth. But given Nigeria’s longstanding issues with regulatory uncertainty, security challenges, and bureaucratic delays, some industry observers may find it difficult to share the government’s enthusiasm.
While Verheijen insists that the country has repositioned itself for major investments from international oil companies (IOCs), past experiences suggest that securing commitments on paper is one thing—getting actual capital inflows is another. The anticipated $2 billion investment, she claims, will be added to TotalEnergies’ $550 million investment in the Ubeta gas field and Shell’s Bonga North project. However, details on where exactly this new investment will come from remain unclear.
Beyond oil, the government’s plan to restructure its electricity subsidy raises further questions. While it acknowledges that the wealthiest citizens benefit disproportionately from the subsidy, no specifics have been provided on how the restructuring will work. Will it result in increased costs for middle-income Nigerians? Will those in lower-income brackets see any tangible relief?
The government has promised a transformed energy sector by 2027, with the Dangote Refinery fully operational, state-owned refineries in Port Harcourt and Warri rehabilitated, and modular refineries spread across the Niger Delta. But given Nigeria’s track record of refinery rehabilitation failures and delays in the Dangote project, many may wonder whether these promises will materialize or simply join the long list of ambitious but unrealized plans.
While the federal government paints a picture of an oil and gas sector on the brink of revival, skepticism remains. Nigeria has often struggled to convert policy announcements into tangible outcomes, and past projections of economic transformation have frequently fallen short.
With the first quarter of 2025 fast approaching, the key question is whether this promised $2 billion investment will truly materialize—or whether it will be yet another case of government optimism failing to meet reality.
