Nigeria’s oil and gas sector went through a year of change in 2025. Global prices swung. Energy transition pressure grew. Reform arrived on several fronts at once.
Even so, the industry made real progress. Landmark deals lifted indigenous ownership. Production hit new highs. Offshore interest returned, and gas infrastructure moved forward.
Deals that reshaped the oil and gas sector
In March 2025, Renaissance Africa Energy Company Limited completed its purchase of 100% of Shell Petroleum Development Company Limited. That deal ended Shell’s long onshore presence in Nigeria. More importantly, it confirmed how central locally led consortia have become in upstream work.
Output told a similar story. NNPC E&P Limited reported a record 355,000 barrels of oil per day on 1 December 2025. That is its highest daily figure since 1989. In short, reform momentum began to show up in the numbers.
Regulatory and tax reform in 2025
The year brought a wave of new law. The Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service Act and the Joint Revenue Board Act were all enacted. Together they aim to modernise the fiscal framework and improve transparency.
Several changes speak directly to petroleum operators. Hydrocarbon tax now extends to deep offshore work, which the earlier framework had left out. The 1% retention rule for qualifying capital spend has gone, so operators can claim full capital allowances over an asset’s life. A 15% effective tax rate now applies to companies turning over ₦20 billion or more. In addition, a 4% development levy applies to the assessable profits of chargeable companies, and a 5% surcharge applies to fossil fuel products at the first point of sale.
Decommissioning rules also tightened. Tax relief for decommissioning and abandonment funds now applies only where at least 30% of the fund sits in escrow with an accredited Nigerian bank.
The Nigerian Insurance Industry Reform Act 2025 came into force on 5 August 2025. It treats oil, gas and power insurance as a single energy class. It also widens the local content requirement, though NAICOM may grant an exemption where the risk is exceptional or local capacity falls short.
Gas as the centre of growth
Gas defined the year’s story. Between June 2024 and October 2025, gas-related final investment decisions passed USD 8 billion. Meanwhile, flagship projects kept moving. These include Nigerian Liquefied Natural Gas Train 7, the Ajaokuta-Kaduna-Kano pipeline, and the Obiafu-Obrikom-Oben pipeline. Domestic utilisation programmes expanded alongside them.
What to expect in 2026
Delivery is now the test. Offshore development, disciplined licensing, refining capacity and gas monetisation will shape how the sector performs. Structural problems have not gone away, and security, infrastructure, pricing and financing all remain live issues.
Nevertheless, the direction is clear. We expect a more disciplined, gas-focused and investment-led industry, built for scale and long-term relevance.
Our ninth annual Oil and Gas report sets out the full picture, including our detailed 2026 outlook for oil and gas markets. To read it in full, download the report using the button below.
