NNPCL Executive Calls for Third-Party Operators to Revive Idle Oil Assets Amid Nigeria’s Struggle to Boost Crude Production

Nigeria’s oil and gas sector remains plagued by stagnation, with crude oil production still struggling around the 1.5 million barrels per day (bpd) mark despite repeated government assurances. Now, Udobong Ntia, the Executive Vice President of Upstream at the Nigerian National Petroleum Company Limited (NNPCL), has made a case for the adoption of third-party operators to unlock stranded oil assets and boost production.

Speaking at the Heirs Energies Leadership Forum 2025 – Industry Leadership Discourse, Ntia stressed that Nigeria’s inability to scale up production is due, in part, to the hoarding of undeveloped assets by oil block owners who lack both the capital and technical expertise to bring them into production. Instead of leaving these fields dormant, he suggested a model where third-party investors and operators could be brought in under an arrangement that allows the primary leaseholders to maintain oversight while relinquishing some control.

“There’s no point in holding onto an asset if you don’t have the capital, aren’t ready to produce, and are just holding onto it,” Ntia argued. “How about we bring in third-party operators? You can still be the operator, maintain oversight, and relinquish a bit of control to see these assets come alive with production.”

His remarks come at a critical time for Nigeria’s oil industry, which has seen a consistent decline in production due to theft, divestments by major oil multinationals, aging infrastructure, and security challenges. However, beyond these well-documented issues, experts say that the industry is also deeply compromised by corruption, nepotism, and political interference in the allocation of oil blocks, further hampering production.

Structural Challenges in Nigeria’s Oil and Gas Sector

At the leadership forum, Ntia identified three key challenges impeding growth in the sector:

• Contracting Delays: Bureaucratic bottlenecks and long procurement processes delay projects, leading to escalating costs and inefficiencies.
• Aging Infrastructure: Many oil production facilities have outlived their operational efficiency, resulting in lower yields and frequent disruptions.
• Security Concerns: Widespread oil theft, vandalism, and illegal bunkering in the Niger Delta continue to undermine production efforts.

While acknowledging these problems, Ntia insisted that better collaboration among industry stakeholders—including international investors and local operators—could help Nigeria scale up its crude output and meet its target of 2 million bpd by 2025.

However, many analysts remain skeptical about this goal, pointing out that the real problem runs much deeper than infrastructure or security.

Nepotism and Corruption in Oil Block Allocations: The Hidden Barrier to Growth

Beyond the operational challenges Ntia outlined, industry experts note that Nigeria’s oil and gas sector is also crippled by systemic corruption, particularly in the way oil assets are allocated.

Energy expert Kelvin Emmanuel has been vocal about the issue, describing the allocation process as riddled with favoritism, political lobbying, and nepotism rather than merit-based considerations.

“You’ll carry oil bloc and give babe because you’re lobbying to keep your job — Family and Friends Inc.,” Emmanuel said, referring to how political connections, rather than technical expertise, often determine who gets access to lucrative oil assets.

He explained that this mismanagement directly impacts production, as many of the individuals or entities that receive oil blocks lack the financial strength or technical know-how to commission Final Investment Decisions (FID) and develop the fields.

“Explains why output is not going anywhere, because the people you gave it to cannot show you a calendar for field development and production, as they have no pedigree or capital to commission FID,” Emmanuel added.

His statements underscore a longstanding problem in Nigeria’s oil sector, where oil assets are often handed out as political favors rather than allocated based on an investor’s ability to efficiently extract and produce crude oil. This practice further stalls production growth, as these block holders either sit on the assets or flip them for profit without developing them.

Emmanuel also highlighted the disconnect between Nigeria’s oil wealth and its citizens’ living conditions, pointing out that the country has all the natural resources needed to create prosperity, but corruption at the top has left Nigerians in perpetual economic hardship.

“There’s no miracle of a better life that Nigerians are praying for that God has not already done — the problem is just terrible people in powerful roles,” he remarked.

Can Nigeria Meet Its 2mbpd Target? Experts Doubt

President Bola Tinubu’s administration has repeatedly pledged to increase crude oil production from under 1.5 million bpd to over 2 million bpd by 2025, but industry analysts remain unconvinced.

It is believed that while Nigeria theoretically has the capacity to reach 2 million bpd, several key obstacles make the goal highly unrealistic:

1. Rampant Crude Oil Theft: The Nigerian oil industry loses hundreds of thousands of barrels daily to illegal bunkering and vandalism. The Niger Delta region, where much of the country’s crude is produced, remains a hotbed of militant activity and sabotage.
2. Exit of International Oil Companies (IOCs): Global energy giants such as Shell, ExxonMobil, and Chevron have been exiting Nigeria’s onshore assets, selling off fields, and scaling down investments due to regulatory uncertainty, insecurity, and operational risks.
3. Regulatory Bottlenecks and Inefficiency: The long delays in approving oil licenses, contracts, and environmental permits discourage investment and stall production growth.

While Ntia’s call for third-party collaboration and greater efficiency in developing idle oil assets offers a potential solution, experts say unless the deeper systemic issues—such as nepotism in oil block allocations and lack of accountability—are addressed, production will likely remain stagnant.

“Everybody will need to collaborate. Everyone should focus on what they do best,” Ntia said. “For areas where they lack the capital or resources, let those who can operate on a cost-revenue basis take on the work.”

While his suggestion could help improve efficiency, many experts argue that no amount of collaboration will fix the sector if political interference and corruption continue to dictate how oil assets are managed.