1.0 YESTERDAY — THE PROMISE NIGERIANS INHERITED
On September 6, 2026, I turn 75—a milestone that feels especially significant at this moment in Nigeria’s petroleum story. I have lived through almost the entire history of the country’s modern petroleum industry. I was five when commercial production began at Oloibiri in 1958, and I entered the industry professionally in 1980. In many respects, Nigeria’s petroleum story has unfolded alongside my own professional journey. My introduction to the oil and gas industry was, in fact, largely accidental. In 1974, while a student at Federal Government College, Sokoto, I travelled—mostly by train—to Port Harcourt for the summer holiday and became fascinated by the industry. Since then, I have devoted my life to studying, teaching and reflecting on an industry that has profoundly shaped Nigeria’s economy, institutions and national imagination.
I have watched Nigeria’s oil and gas industry grow from its early beginnings into the dominant source of the nation’s foreign exchange and public revenue. I witnessed the optimism that accompanied the early discoveries, the spectacular expansion of production immediately after the civil war, the oil boom and the confidence that petroleum wealth would transform Nigeria. I have also witnessed the other side of the story: the growing dependence on crude oil, the vulnerability of public finances to oil prices and production, declining output, underinvestment, insecurity, environmental concerns, institutional uncertainty and the repeated postponement of projects that could have created enormous value for the country. As I celebrate my 75th birthday and reflect on more than five decades of observing the industry, I return to a deceptively simple question: after nearly seven decades of commercial petroleum production, what has Nigeria truly gained from its petroleum wealth?
The answer is neither simple nor entirely negative. Petroleum has sustained Nigeria’s foreign exchange earnings and public revenues for decades, financed infrastructure and institutions, supported industrial activity, and helped develop generations of reputable petroleum engineers, geoscientists, economists, lawyers, managers and entrepreneurs. It has also fostered a substantial petroleum-services ecosystem and professional capabilities scarcely imaginable when the first commercial barrels left Oloibiri. That Nigeria has developed professionals for the whole wide world because of its petroleum wealth, is not conjectural. The evidence is there worldwide. Yet, beyond these contributions, a more fundamental question remains: have we converted our petroleum resources into a sustainable economic value as we reasonably could have?
That distinction matters. Production is not prosperity; revenue is not development; resource abundance is not wealth. A country can produce millions of barrels yet create insufficient economic value, hold vast reserves yet fail to attract development capital, and earn substantial petroleum revenue while poverty, unemployment, unreliable electricity and weak infrastructure persist. The real measure of petroleum success is therefore not simply how much we extract, but what that extraction enables us to create. That distinction has shaped much of my thinking as a professor emeritus of petroleum economics.
When commercial production began in 1958, petroleum appeared capable of financing rapid national transformation. Nigeria was young, its agricultural economy was productive, and global demand was strong. For a time, that promise seemed attainable. Gradually, however, oil became the centre of Nigeria’s fiscal and political economy. Public finances became increasingly sensitive to international prices and production volumes, foreign exchange earnings became heavily dependent on crude exports, and the wider economy adapted to recurring petroleum receipts. The resources that were expected to finance diversification eventually became the resources on which the economy itself became dependent. This is the paradox of natural-resource wealth. It is a blessing when converted into productive capacity that outlives the resource, but a vulnerability when the economy becomes dependent on the resource itself. Nigeria has experienced both. The issue, therefore, is not whether petroleum has mattered—it clearly has—but whether Nigeria has extracted value as effectively as it has extracted oil.
2.0 TODAY — REFORMING THE PETROLEUM ORDER
My professional training has taught me to view the barrel differently from the way it is often framed in public debate. An oil field is not an underground tank waiting to be emptied; every commercial barrel depends on exploration, appraisal, development capital, drilling, facilities, evacuation infrastructure, technical expertise, competent management and investors willing to bear geological, commercial, regulatory and security risks. Capital has choices, and Nigeria competes for petroleum investment with Brazil, Guyana, Angola, the Gulf states and other jurisdictions. Investors therefore assess not simply whether Nigeria has oil, but whether the risk-adjusted returns compare favorably with alternatives.
Fiscal policy is consequently decisive. Government has a legitimate right to capture a fair share of the economic rent from resources owned by the Federation, but the objective should be to maximize the present value of public revenue over the life of the resource while preserving sufficient incentive for investors to commit capital and assume risk. Economic rent cannot be taxed if policy prevents it from being created. A project that never reaches final investment decision delivers no revenue, employment, local content, production or wider economic multiplier; a smaller share of a viable project may therefore be worth more than a large share of one that never materializes.
This is not an argument for surrendering the nation’s petroleum wealth, but for aligning fiscal design with economic reality. Deepwater, shallow-water, mature onshore, marginal, frontier and gas assets have distinct costs, risks and investment profiles and should not be treated identically. The fiscal system should therefore be competitive, progressive and sufficiently stable to allow investors to make long-term decisions. Government should capture more when exceptional economic rent is created, while avoiding fiscal burdens that make commercially marginal projects impossible. This question of balancing investment incentives with public value capture was central to the reform challenge that eventually produced the Petroleum Industry Act of 2021. By the time the PIA was enacted, Nigeria’s petroleum industry had accumulated decades of laws, institutions, regulations and practices. Earlier attempts at reform had produced important changes, but architecture had become increasingly complex and difficult to reconcile with the needs of a modern petroleum industry.
The PIA was therefore more than another amendment; it was an attempt to reset the petroleum order. Its institutional architecture was especially significant. The Nigerian Upstream Regulatory Commission, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, and the transformation of NNPC into NNPC Limited were intended to clarify institutional roles: government sets policy, regulators regulate, and commercial entities compete. The PIA also sought to improve acreage management, modernize the fiscal architecture, address host-community interests, strengthen transparency and create a more investment-friendly environment. The underlying objective was not simply to change institutions, but to create an industry structure capable of producing better economic conduct and, ultimately, better performance.
In my view, PIA was necessary. Five years after enactment, however, the more important question is whether it is delivering the petroleum industry Nigeria needs. The PIA should now be judged by measurable outcomes: reduced uncertainty, more predictable regulation, faster project execution, stronger investment and production, competitive costs, scalable gas commercialization, efficient rent capture and greater value retained by Nigerians. These are the measures that should ultimately determine its success. Legislation creates value only when institutions translate it into conduct and conduct produces performance. The structure–conduct–performance framework is useful here. Structure defines ownership, regulation, investment and participation; conduct reveals whether actors invest, produce, innovate, manage costs, commercialize gas and comply with the rules; and performance appears in production, reserves development, profitability, public revenue, local value creation and national welfare. The PIA changed the industry’s structure; Nigeria must now determine whether it has changed conduct enough to improve performance. That, to me, is the more meaningful test of petroleum reform.
The years since the PIA have also revealed another important issue: the tension between policy responsiveness and policy stability. Government has introduced several fiscal and regulatory measures intended to improve investment, reduce costs, accelerate projects and address emerging challenges. The willingness to adjust policy when economic circumstances change is a strength. But petroleum investment also requires certainty. A billion-dollar project may take years to develop and decades to recover its capital, so investors need confidence that the rules will remain sufficiently predictable over the life of the investment. Stability does not mean that policy can never change; it means that change should be transparent, rules-based, economically justified and predictable enough for investors to price risk. Otherwise, uncertainty becomes embedded in the cost of every barrel. In petroleum economics, delay means deferred production and revenue; prolonged delay can eliminate a project altogether.
The Presidential Executive Orders issued in the post-PIA period illustrate this balance between responsiveness and stability. They reflect an attempt to respond pragmatically to some of the implementation and investment challenges that became evident as the new petroleum framework took effect, including the need to improve project economics, accelerate investment decisions and reduce avoidable regulatory and contractual delays. In that sense, executive action can be useful in translating policy intent into operational change. But executive orders should complement, rather than substitute for, a stable institutional and legislative framework. Their lasting value should therefore be judged not simply by the immediate projects or investment decisions they stimulate, but by whether they reduce uncertainty, improve competitiveness, accelerate value creation and strengthen confidence in Nigeria’s petroleum investment environment. Good policy is not immutable; it learns. But learning must ultimately produce a more predictable and economically coherent system.
A Different Petroleum Industry is Emerging in Nigeria
While the policy debate has continued, the structure of Nigeria’s petroleum industry itself has begun to change. For much of our petroleum history, the dominant picture was familiar: international oil companies operated major assets, NNPC participated on behalf of government, and the state captured much of the industry’s value through petroleum revenues. That picture is changing. International oil companies are repositioning their portfolios, while Nigerian independent and indigenous operators are assuming greater responsibility for assets, particularly in the onshore and shallow-water segments. This may prove to be one of the most important structural changes in Nigeria’s petroleum industry. It is tempting to describe this simply as a transfer of ownership, but I see a potentially more important economic development.
A field that is marginal to a large international operator may be commercially attractive to a smaller, more focused indigenous company with a different cost structure, management approach and investment horizon. The reservoir has not changed; the economics of developing it may have. That is an opportunity, but it is also a test. Indigenous ownership is not automatically indigenous value creation. A Nigerian company acquiring an asset still needs capital, technology, infrastructure, managerial capability, security and access to markets. The success of indigenous participation should therefore not be measured simply by how many assets have changed hands, but by what follows the transfer: whether production rises, unit costs fall, reserves are developed, investment grows, Nigerian firms deepen technical and commercial capability, suppliers move into higher-value activities, profits and knowledge are reinvested domestically, and operators become competitive beyond Nigeria.
That is the standard that should define the indigenous chapter of our petroleum story. It is also where local content must evolve—from participation percentages to genuine local capability and value creation. The ultimate objective should be to build Nigerian companies capable of designing, financing, operating and managing complex petroleum and energy projects, and eventually exporting those capabilities to Africa and the world. If Nigeria achieves that, petroleum becomes more than an extractive industry. It has become a platform for industrial capability.
An equally significant change is taking place downstream. For decades, Nigeria lived with one of petroleum economics’ great contradictions: although it was a major crude-oil producer, it remained heavily dependent on imported refined products. The resulting subsidy burden overwhelmed public budgets, diverting resources from health, education and infrastructure. In effect, Nigeria exported crude oil and imported much of the value added through refining. The expansion of private refining capacity—most visibly represented by the Dangote refinery—creates new possibilities. It could connect domestic crude production more directly to local processing and regional markets, reduce foreign-exchange demand, improve product availability, increase domestic value addition and strengthen Nigeria’s position in the regional petroleum market.
But refinery capacity is not the same thing as refinery value. A refinery must receive crude reliably and on commercially sustainable terms; it must operate efficiently; products must be competitively priced; infrastructure and logistics must function; and domestic and regional markets must be able to absorb the output. The objective should therefore not be forced integration at any cost, but commercially efficient integration. Indigenous and independent operators can develop producing assets, private refineries can process crude, gas can support power and industry, Nigerian service companies can move higher up the value chain, and domestic and regional markets can absorb petroleum products. If these pieces can be connected efficiently, Nigeria can begin to capture significantly more value from every barrel and molecule produced. That would represent a profound change from the petroleum model of the past.
From Petroleum Resources and Reserves to Economic and Public Value
Nigeria is commonly reported to hold approximately 37 billion barrels of crude oil reserves and more than 200 trillion cubic feet of natural gas reserves. Those numbers are impressive, but reserves do not generate revenue merely by existing underground. They must be converted into economically viable production, and that requires capital, technology, infrastructure, security, efficient contracting and speed of execution. This is why efforts to increase production and reduce project costs are important. Nigeria’s aspiration to move production toward the 3 million barrels-per-day range is understandable, but production targets are not achieved by announcing them. Such targets require investment, reservoir integrity, new developments and field redevelopment, exploration, reliable evacuation infrastructure, security and fiscal terms capable of attracting capital.
The barrel must be earned before it can be counted. This is particularly important in a world where capital is becoming more selective about petroleum investment. Nigeria is not competing simply against another Nigerian field; we are competing against every economically attractive petroleum opportunity in the world. Cost efficiency and project cycle time have therefore become part of our competitiveness. If Nigeria can reduce the time and cost between discovery and first production, the economic consequences can be enormous. And if oil is the barrel, gas may be the molecule that defines the next chapter.
Nigeria has enormous gas resources, yet millions of Nigerians and thousands of businesses still struggle with inadequate electricity and unreliable energy supply. That contradiction tells us something fundamental: resource abundance does not create value until the market and infrastructure exist to monetize the resource. Commercialization requires an integrated value chain. Gas must be produced, processed, transported and sold; power plants and industrial users must provide credible demand; infrastructure must be bankable; contracts must be enforceable; and pricing must be sufficient to support investment while remaining viable for consumers.
Gas-to-power is therefore not merely a gas problem or a power problem. It is a value-chain problem. The opportunity is nevertheless enormous. Gas can support electricity generation, fertilizer, methanol, petrochemicals, LPG, LNG and other industries. It can become the feedstock around which industrial clusters are built. Nigeria should therefore move beyond simply saying that we have abundant gas. Abundance is a geological fact. A bankable gas market is an economic achievement. If we get that right, gas could become one of the principal bridges between the petroleum economy and industrialization.
NNPC Limited — Commerciality must Mean Something
The transformation of NNPC into NNPC Limited was one of the most visible changes introduced by the PIA, but commercialization must mean more than a change in name or corporate form. For Nigerians, the real question is simple: what difference should a commercial NNPC Limited make to the way our petroleum resources are developed and the value we derive from them? A genuinely commercial national oil company should allocate capital where it creates the greatest economic value, compete on merit, make investment decisions based on economics rather than administrative convenience, manage risk professionally and be accountable to its shareholders for performance. It should pursue commercially viable projects, develop its assets efficiently, negotiate partnerships from a position of commercial strength and make decisions with the discipline expected of any serious energy company.
This distinction matters because, for much of Nigeria’s petroleum history, NNPC carried several responsibilities at once—representing government interests, participating in commercial ventures and, at different times, performing functions that could blur the boundary between the state as resource owner, government as policymaker and the national oil company as commercial participant. The PIA was intended to bring greater clarity to these roles. Government has policy responsibilities. Regulators have regulatory responsibilities. NNPC Limited has commercial responsibilities. The clearer those boundaries become, the easier it is to hold each institution accountable for what it is supposed to deliver.
What should Nigerians expect to see from this change? Not merely a new corporate identity, but better commercial outcomes. A commercial NNPC Limited should be able to demonstrate where it puts capital, why it invests, what returns it expects, what risks it assumes and how those investments create value for its shareholders and, ultimately, for Nigeria. It should be capable of attracting capital and credible partners, developing petroleum and gas projects faster, commercializing gas, managing strategic interests effectively and competing with other national and international energy companies. If commercialization is working, we should eventually see it in better project execution, stronger asset performance, disciplined costs, improved reserves development, greater investment and a more resilient petroleum value chain.
But commerciality also requires transparency about whose money is whose. Petroleum revenues belonging to the Federation must be clearly distinguished from revenues earned by NNPC Limited in its capacity as a commercial company. Nigerians should be able to understand what belongs to the Federation, what belongs to the company, what is earned, what is retained, what is remitted and on what basis. This is not merely an accounting or governance issue. It is fundamental to commercial credibility. Investors need to know that the rules are clear; shareholders need to know how capital is being deployed; and citizens need to know what value is being created from resources that ultimately belong to them.
The promise of NNPC Limited, therefore, should not be judged by the fact that NNPC became a limited liability company. The real test is whether it behaves like one. Commerciality should mean disciplined capital allocation, economic decision-making, professional risk management, accountability, transparency and measurable value creation. If Nigeria gets that right, a commercially credible NNPC Limited can become one of the country’s most important strategic assets—not because it is state-owned, but because it is commercially capable of creating value from Nigeria’s petroleum endowment.
3.0 TOMORROW — FROM PETROLEUM WEALTH TO NATIONAL WEALTH
The petroleum industry Nigeria will face over the next several decades will be very different from the industry I encountered at the beginning of my professional career in 1980. Capital markets are changing, technology is advancing, consumer preferences are evolving, and the energy transition is reshaping how investors assess long-lived petroleum projects. There is still considerable uncertainty about the pace of that transition and the future trajectory of oil demand. Nigeria should therefore neither abandon commercially viable petroleum resources prematurely nor assume that the world will continue to value Nigerian crude in the same way for another seventy years.
The sensible response is competitiveness. Nigeria must pursue commercially viable oil, develop scalable gas markets, accelerate project execution, reduce costs, maintain investable and predictable fiscal terms, strengthen regulatory certainty, improve infrastructure and security, build stronger indigenous operators, support commercially run refineries, and, above all, convert petroleum revenues more deliberately into a productive economy beyond petroleum. To me, that is what the energy transition should mean for Nigeria. It should not simply be a transition away from hydrocarbons; it should be a transition from dependence on hydrocarbons to productive wealth built with hydrocarbons.
There is an important distinction here. When petroleum revenues are converted into infrastructure, human capital, technology, manufacturing and diversified productive capacity, petroleum becomes a bridge to the future. But if we simply consume the revenue and wait for the resource to decline, the transition will eventually be imposed upon us rather than managed by us. The next phase of Nigeria’s petroleum story should therefore be judged not merely by barrels produced or revenues collected, but by the value created across the entire petroleum value chain and the productive capacity that remains after the hydrocarbons are gone.
Across that value chain, upstream investment should create production and economic rent; midstream infrastructure should unlock stranded value; gas should power industry; refining and petrochemicals should deepen domestic value addition; indigenous companies should acquire capabilities rather than merely assets; local content should evolve into local competitiveness; and petroleum revenues should become productive national capital. That is how a finite natural resource can be transformed into sustainable national wealth.
4.0 WHAT MY 75 YEARS HAVE TAUGHT ME
At 75, I am less impressed by the volume of petroleum beneath the ground than by how much of it can be produced economically and converted into lasting value. I am less concerned with headline measures of government take than with the present value of public revenue over the full life of the resource, and less persuaded by ownership statistics than by the capabilities, income and opportunities Nigerians ultimately retain. Experience has convinced me that the true measure of petroleum success is not what we extract, but what we build with it. This is where the story of my generation meets the unfinished story of Nigeria.
Who is Wumi Iledare, PEofPE, AT 75?
At 75, I remain, above all, a student of petroleum economics—one who has spent a lifetime examining the relationship among natural resources, investment, public policy and national development. My journey has moved through industry practice, academia, research and public policy, with petroleum economics as the thread connecting them all. I have had the privilege of teaching generations of students, engaging industry and government, and contributing to debates about how Nigeria can create greater value from its petroleum endowment. Along the way, I have learned that the most important questions are rarely about how much oil or gas Nigeria possesses; they are about what we do with what we have.
At this stage of life, I am less interested in titles than in legacy, ideas and the people who will carry them forward. I remain curious, willing to question established thinking and convinced that sound economics must ultimately serve people and society. If my professional journey has taught me anything, it is that resources are temporary endowments, institutions matter, and value that is not created, retained and reinvested cannot become lasting national wealth. At 75, I am still learning, still asking questions and, I hope, still contributing.
Yesterday, Today and Tomorrow
Yesterday gave Nigeria the resource. Today challenges us to govern, invest and manage it more wisely. Tomorrow will judge whether we converted it into productive and sustainable national wealth.
At 75, I have no illusion that petroleum alone can solve Nigeria’s problems. It cannot. Yet I remain convinced that petroleum, managed intelligently, competitively and transparently, can still be one of the country’s most powerful instruments for building the productive economy we have long desired. The story that began at Oloibiri nearly seventy years ago is not over; we may simply be entering its most consequential chapter. The question is whether we will use it wisely.
The practical challenge is to turn the barrel into infrastructure, the gas molecule into electricity and industry, indigenous participation into globally competitive companies, refining capacity into an industrial ecosystem, and petroleum revenues into productive national assets. We must do so while using the remaining years of petroleum’s economic relevance to prepare for a global energy system that will become progressively less hydrocarbon centred. These are not merely petroleum questions; they are questions about Nigeria’s development.
My generation inherited the resources; the next generation must inherit the value created from them. That, perhaps, is the real meaning of PEWI @75. It marks not simply seventy-five years of life or nearly seventy years of oil, but a lifetime of watching Nigeria discover, develop, depend upon, reform and now rethink its petroleum wealth. If there is one lesson I would leave to those who will carry the story forward, it is this: Nigeria should no longer measure petroleum success by what it takes from beneath the ground, but by the sustainable economic value it creates above it. That is the true measure of petroleum wealth—and the standard by which Nigeria should judge its petroleum future.
SOURCE: agtvmagazine.com