The Nigerian National Petroleum Company Limited (NNPCL) may have to optimize non-operated assets to achieve new set targets as new report identifies a number of sub-commercial assets.
This is the findings released by Wood Mackenzie which notes that the Company could see its oil and gas production decline by as much as 50 per cent by the late 2030s.
Before the report, the newly appointed Group Chief Executive Officer (GCEO) of the Company, Bashir Bayo Ojulari, announced an ambitious target, to attract sectoral investments worth $30 billion by 2027 and $60 billion by 2030; raise crude oil production to over 2 million barrels per day, sustained through 2027 and attain 3 million by 2030.
Ojulari disclosed this while unveiling plans to expand refining output to 200kbpd by 2027, and 500kbpd by 2030; grow gas production to 10bcf per day by 2027, and 12bcf by 2030 and deepen energy access and affordability for all Nigerians.
But the new analysis by global energy research firm, Wood Mackenzie, warned of possibilities of not getting such results.
In its recent podcast titled “A New Era for NNPC and Nigeria’s Upstream Oil & Gas Sector,” the consultancy firm said NNPCL’s portfolio is burdened by a large number of sub-commercial assets, which pose long-term viability concerns.
Using its new upstream benchmarking tool, Woodmac’s team of experts, including Ian Thom, Research Director for Upstream; Neivan Boroujerdi, Director of Corporate Research; and Mansur Mohammed, Head of West Africa Upstream Content, highlighted that while short-term production may improve slightly, output is expected to peak by 2026 before declining steeply.
“What is unique to NNPC is that, unlike a lot of the other National Oil Companies within our corporate universe and around the world, most of its production and its assets are non-operated.
“So it’s got big ambitions to grow its business, to grow the Nigerian upstream sector, but a lot of that will be reliant on a lot of other IOCs around the world, indigenous producers, where assets will have to compete for capital within a wider portfolio.
“And if we look at production in a little bit more detail, we can see that it is growing in the short term. That’s set to peak in 2026. But clearly, there are challenges in the longer term. By the late 2030s, production could be half of what it is today,” the team stated, citing a lack of project pipelines and an over-reliance on non-operated assets.
Unlike other national oil companies that have more control over operations, Woodmac noted that NNPCL’s production is largely dependent on assets operated by international oil companies and indigenous producers. This limits its ability to directly influence output growth and heightens exposure to capital allocation decisions made outside Nigeria.
“So there is a lack of longevity in the portfolio. It needs more projects in the pipeline. And if we look at the reserve base, what you see is that NNPC has a huge amount of resources within its portfolio, but most of those resources are still sub-commercial. The NNPCL has big ambitions, but its future hinges on how much capital other players are willing to invest in Nigeria,” the analysts said. “Right now, there’s a lack of longevity in its portfolio. It needs new commercial projects urgently.”
Meanwhile, President Tinubu has tasked the NNPCL to push towards achieving an ambitious set of goals by 2030, including raising oil production to 3 million barrels per day, gas output to 10 billion cubic feet per day, attracting $60 billion in investment, and refining 500,000 bpd domestically.
But Woodmac suggests these targets may be undercut by structural inefficiencies and fiscal hurdles.
On gas development, Woodmac flagged long-standing infrastructure constraints as a major bottleneck. It noted that Nigeria holds significant untapped gas reserves, especially in the Niger Delta, but less than 20 per cent of remaining volumes are considered commercially viable due to a lack of processing and transportation infrastructure.
“For instance, the OB3 pipeline, which should connect gas fields in the Eastern Delta to Lagos and other markets, has faced years of delay. Its completion could be a game changer,” the report said.
Operational costs are also a concern. Woodmac’s benchmarking tool shows that NNPCL has a higher cost base compared to its peers, driven by factors such as barrel losses, insecurity, and policy challenges like local content regulations.
“The Company must urgently address its cost competitiveness, especially if it wants to attract investors or consider an Initial Public Offering in the future,” the team warned.
In addition, the retreat of major oil companies from Nigeria’s onshore and shallow water assets has reshaped the upstream landscape. Deepwater fields now account for the bulk of investments, and projects like Bonga North, which secured Final Investment Decision in 2023, are expected to play a pivotal role in any future production rebound.
While NNPCL maintains a 60 per cent stake in many joint ventures, the analysts cautioned that future financing will be more complex. Indigenous partners like Oando, Renaissance, and Seplat are unlikely to continue the carry arrangements previously offered by oil majors.
“The ability to finance onshore operations independently will be critical. Without that, growth will be severely constrained,” Woodmac said.
Despite the challenges, the firm acknowledged Nigeria’s untapped potential, especially in deepwater reserves. However, unlocking that potential will require aggressive project development, better cost control, and regulatory clarity.
“Nigeria’s upstream future hinges on timely FIDs, increased capital inflow, and removing infrastructure bottlenecks. Otherwise, production will continue to slide,” the experts concluded.
However, the NNPCL, said it is focusing on reconfiguring its business structure for agility and value creation; conducting independent value assessments to inform data-driven decisions; enforcing a robust performance management framework; building transparent, value-aligned partnerships with all stakeholders and most critically, taking control of its narrative.
While explaining the criticality of pursuing the Company’s bold ambitions, the Group CEO said the targets are not just metrics, but indicators of hope, jobs, industrial growth, and energy security for millions of Nigerians.
Describing NNPC Ltd as a renewed, forward-facing, and future-ready organisation that is leading Nigeria’s energy transformation, Ojulari said “it’s time we tell our story—one of innovation, reform, and national pride.
“We stand at the gateway of a new era—one that demands courage, professionalism, and a relentless drive for excellence. The task before us is great, yet the opportunity to redefine Nigeria’s energy future is even greater. Now is the time to turn our transformation promise into performance,” Ojulari said in a statement signed by Olufemi Soneye, the Chief Corporate Communications Officer, NNPC Ltd.
He charged staff to be proud of NNPC Ltd’s recent transformation, stressing that the next journey to becoming a fully-fledged limited liability company will require the collective drive towards making NNPC more transparent, profitable and accountable.
“We will provide the best combination where the experienced and the young will both thrive towards achieving our set targets.
“We recognize that our greatest asset is our people. Our success will be powered by empowered employees. As such, we are fully committed to creating a workplace where everyone is valued, motivated, and inspired to thrive. Together, we will build a high-performing, globally competitive NNPC Ltd that is proudly Nigerian and proudly world-class,” Ojulari concluded.