The Minister for State, Petroleum Resources (Oil), Heineken Lokpobiri, said on Wednesday that Nigeria’s oil sector is facing a significant struggle due to the underperformance of the upstream sector.
Mr Lokpobiri disclosed this at the ongoing 8th edition of the Nigeria International Energy Summit (NIES 2025) in Abuja.
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The minister added that the success of the oil and gas industry is predicated on the success of the upstream division.
“The reason why we’re struggling in the entire sector is because the upstream is underperforming. And once the upstream succeeds, the midstream will succeed and the downstream will succeed,” Mr Lokpobiri said.
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He highlighted the challenges facing the sector, to include domestic crude oil supply obligations and the need to increase production to meet both domestic and external demands.
“I believe the only way we can increase our upstream development is by investments. And these investments will not come for less. We have a challenge about domestic crude oil supply obligation, which is provided for in the Petroleum Industry Act (PIA). But you can’t keep what you don’t produce. You can’t keep what you have already committed. I do know that most of the companies operating in Nigeria have commitments when they are raising funds for investment.
“But if we increase our production, we’ll be able to get more volumes, satisfy both our domestic obligation and also satisfy our own external obligation,” he said.
According to him, Nigeria has the potential to become a major player in the global oil and gas market, but this requires a stable and predictable regulatory and legal framework.
“That is why, within the short period we’ve been in office, less than one and a half years, you can agree with me that we are making steady progress. We are guaranteeing a stable, predictable regulatory and legal framework. We are making policies that will make our fiscals globally competitive,” he added.
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Mr Lokpobiri called on operators to work with the government, particularly in the upstream sector to unlock the country’s oil potential and drive economic growth and development.
“Let’s work together to change the narrative so that we can have a successful upstream that will translate to a successful midstream and downstream. Ultimately transforming these hydrocarbon resources to economic prosperity, (and) transforming these resources to revenue to be able to finance critical sectors of our economy.
“As governments, we are willing to always partner and engage. We’ve always emphasised sustainable engagement. Instead of us dragging ourselves to arbitration, instead of us dragging ourselves to the public, let’s sit together and build consensus so that together we can find solutions to the problems of the industry,” he said.
