Why Nigeria Must Strengthen Its Position in Africa’s Next Wave of Oil and Gas Investment
By William Emmanuel Ukpoju
Africa is entering another critical contest for energy capital, and Nigeria is once again standing at the centre of the opportunity. The African Energy Chamber estimates that upstream and midstream oil and gas investment across the continent could reach $41 billion, creating a potentially significant capital wave for countries seeking to expand production, develop gas resources and build the infrastructure needed to monetise them.
Nigeria, alongside Angola and Mozambique, is naturally positioned to attract a substantial share of that investment. The country possesses one of Africa’s largest hydrocarbon resource bases, an extensive network of existing energy infrastructure, a large domestic market and decades of experience operating across the oil and gas value chain. Yet the size of Nigeria’s resource endowment does not automatically translate into investment. For international energy companies and private capital, the contest is ultimately about something more practical: risk-adjusted returns, speed of execution, fiscal certainty and the ability to get projects producing cash within predictable timelines. This is where Nigeria’s challenge becomes more complicated. The country is competing against neighbours and regional peers that are also redesigning their petroleum sectors to attract increasingly selective global capital. Angola is leveraging its deepwater experience and regulatory reforms, while Mozambique is positioning its enormous gas resources around large-scale LNG developments. Nigeria therefore faces a question that goes beyond how much oil and gas it has underground.
Can it create an investment environment capable of converting those resources into bankable projects faster and with less risk than its competitors? That question will determine how much of Africa’s projected energy investment Nigeria actually captures.
The new competition for capital
For much of Nigeria’s petroleum history, the country’s enormous reserves and production potential were sufficient to make it an obvious destination for international oil companies. That advantage can no longer be taken for granted. The global energy investment environment has changed significantly. Investors are demanding stronger governance, predictable taxation, faster project execution and clearer pathways to commercial returns. At the same time, higher financing costs have made delays considerably more expensive. A project that takes several additional years to reach Final Investment Decision is not simply delayed. Its economics can change. Cost inflation, financing costs, exchange-rate movements and changing commodity-price expectations can all erode projected returns. This makes the investment competition between Nigeria, Angola and Mozambique less about who has the biggest reserves and more about who can turn reserves into revenue most efficiently.
Nigeria has made important progress through the Petroleum Industry Act, the restructuring of regulatory institutions and renewed emphasis on gas development. But implementation remains the critical test. The legislation can establish the framework. Execution determines whether investors believe it.
Fiscal certainty must become a competitive weapon
Nigeria’s Petroleum Industry Act introduced significant changes to the fiscal and regulatory architecture of the petroleum industry, including adjustments designed to improve the attractiveness of deepwater and gas investments. But investors do not assess legislation in isolation. They assess how consistently the rules are implemented. For a company considering a multi-billion-dollar offshore development, fiscal uncertainty can be as damaging as a high tax rate. Investors need to know what their obligations will be throughout the life of a project, how costs will be recovered, how changes in regulation will be treated and whether profits can ultimately be repatriated. This is an area where Angola has been actively seeking to make its upstream environment more competitive. Its petroleum regulator, the Agência Nacional de Petróleo, Gás e Biocombustíveis (ANPG), has pursued reforms around licensing, production-sharing arrangements and mature-field development, seeking to make existing assets and new opportunities more commercially attractive. For Nigeria, the lesson is not necessarily to replicate Angola’s fiscal system. Rather, it is to recognise that clarity itself has become a competitive advantage. Investors can price a known cost. What they struggle to price is uncertainty. Nigeria therefore needs to deepen the practical implementation of fiscal-stability provisions, reduce overlapping charges and administrative burdens, and provide greater certainty around foreign-exchange access, capital repatriation and dividend payments. The objective should be straightforward: when an investor compares a Nigerian project with an Angolan or Mozambican project, the Nigerian project should not carry an avoidable “uncertainty premium”.
Speed may determine where the next dollar goes
There is another competition Nigeria cannot afford to lose: time. In the oil and gas industry, time is money in its most literal form. Every month between discovery and commercial production represents capital that has already been committed but is not yet generating revenue. Long regulatory processes can therefore materially affect project economics. Nigeria’s regulatory architecture has become more defined under the PIA, with institutions such as the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority taking responsibility for different segments of the value chain. The challenge is ensuring that institutional clarity translates into administrative speed. Field development approvals, environmental assessments, contracting processes, licensing and other regulatory requirements can involve multiple agencies and layers of approval. For investors, the issue is not whether regulation exists. It is whether the regulatory process is predictable, transparent and time-bound. Angola’s efforts to streamline licensing and contractual processes offer an important point of comparison, while Mozambique’s large LNG projects demonstrate how enormous investments can be structured around long-term concessions. Nigeria’s answer should be a genuine single-window approach for major strategic investments, particularly deepwater and gas projects. A project developer should know what approvals are required, which agency is responsible, what documents must be submitted and how long each stage should take. That would allow investors to model project timelines with greater confidence. And in an industry where billions of dollars can sit idle before FID, predictability has financial value.
Security is an investment issue, not merely a security issue
Perhaps nowhere is Nigeria’s competitive disadvantage more visible than in the security of its petroleum infrastructure. Crude theft, illegal refining, pipeline vandalism and attacks on production infrastructure have historically imposed enormous costs on operators and the wider economy. The problem extends beyond the value of stolen crude. Production interruptions affect cash flow. Damaged infrastructure requires repairs. Security operations add costs. Investors demand higher risk premiums. And uncertainty over evacuation infrastructure can complicate financing decisions. The consequences are already visible in the changing geography of international oil company investment in Nigeria. As international operators increasingly focus on deepwater developments, the economics of onshore and shallow-water assets have become more complicated. Some mature assets have been transferred to indigenous operators, while capital has increasingly followed projects perceived to have clearer operational boundaries. Mozambique offers a different warning. The country’s enormous gas resources have attracted some of the world’s largest energy investments, but insecurity in Cabo Delgado has disrupted the development timetable of major LNG projects. The comparison demonstrates two different dimensions of the same problem. Mozambique’s challenge is concentrated around a major project region. Nigeria’s security challenge has historically been more dispersed across production, transportation and evacuation infrastructure. For Nigeria, therefore, securing the energy value chain must become part of the investment strategy itself. Pipeline surveillance, digital monitoring, rapid-response systems, community engagement and stronger coordination among security agencies and operators could reduce the physical and financial losses associated with infrastructure insecurity. The objective should not simply be to protect pipelines. It should be to assure investors that a barrel produced in Nigeria can reliably become a barrel sold in the market.
Gas could be Nigeria’s biggest competitive advantage
If Nigeria has one area where it can potentially differentiate itself strongly from its competitors, it is gas. The country’s enormous gas resource base, combined with its large domestic market and existing LNG infrastructure, provides an opportunity to build a more diversified investment proposition around gas. The government’s Decade of Gas agenda has already placed greater emphasis on gas development, processing, transportation and domestic utilisation. But policy ambition must now translate into investable projects. That means commercially viable gas pricing, bankable Gas Sales Agreements, reliable transportation infrastructure and greater certainty around foreign-exchange access. It also means developing projects that connect gas resources to multiple markets. Gas can supply power plants, industrial users, fertiliser producers and petrochemical facilities while also supporting LNG and other export-oriented projects. This diversity could become one of Nigeria’s strongest competitive advantages. However, the opportunity will remain largely theoretical if producers cannot secure commercially sustainable prices, evacuation infrastructure and predictable payment mechanisms. The task is therefore to move from “Nigeria has gas” to “Nigeria can reliably monetise gas.” That distinction matters enormously to investors.
From resource holder to investment destination
The $41 billion projected investment opportunity should not be interpreted simply as a pot of money waiting to be divided among African oil and gas producers. It represents a competition. Nigeria, Angola and Mozambique each bring different advantages to that competition. Nigeria offers scale, resources, an established petroleum industry, a large domestic market and significant gas potential. Angola offers deepwater expertise, established offshore infrastructure and ongoing efforts to improve its investment framework. Mozambique offers enormous gas resources and the possibility of large-scale LNG development. The winner of individual investment decisions will ultimately be determined project by project. For Nigeria, the strategic priority should therefore be to remove the factors that make otherwise attractive projects unnecessarily difficult to finance and execute. That means faster approvals, predictable fiscal administration, secure infrastructure, transparent regulation and commercially viable gas development.
Three pivots Nigeria cannot postpone
Nigeria’s response to the emerging investment competition can be distilled into three broad priorities. First, make gas incentives bankable. The Decade of Gas should move beyond policy declarations toward commercially credible Gas Sales Agreements, cost-reflective tariffs, reliable infrastructure and mechanisms that address foreign-exchange and payment risks.
Second, compress the licensing timeline. Strategic deepwater and gas projects should move through clearly defined, time-bound approval processes. Where multiple agencies are involved, government should create genuine coordination rather than leave investors to navigate administrative fragmentation.
Third, de-risk the midstream. Producing hydrocarbons is only valuable when those hydrocarbons can reach a market. Nigeria must therefore place pipeline integrity, evacuation infrastructure and security at the centre of its investment strategy.
Ultimately, Nigeria does not need to convince investors that it has oil and gas. The world already knows that. The harder task is convincing capital that Nigeria can transform those resources into predictable, commercially viable and timely returns. That is the real competition. And with billions of dollars looking for projects across Africa, the countries that combine resources with speed, certainty and security will be the ones best positioned to convert geological potential into economic value. For Nigeria, the opportunity is enormous. So is the cost of moving too slowly.