Nigeria draws fresh upstream investment as $800m gas project

Nigeria’s oil and gas industry is attracting fresh investment interest as an $800 million offshore gas project reaches final investment decision, while Indonesia’s state-owned oil company, Pertamina, considers acquiring producing and near-production assets in the country.

The developments point to renewed investor interest in Nigeria’s upstream sector as regulatory and fiscal reforms begin to improve the commercial prospects of oil and gas projects that had remained undeveloped for years.

The $800 million Ima Gas Project, being developed offshore by AMNI International Petroleum Development Company in partnership with TotalEnergies EP Nigeria Limited, is expected to produce about 300 million standard cubic feet of gas per day at peak capacity.

The project is targeting production in 2028 and will supply gas to Nigeria LNG Limited, providing feedstock for the expansion of its Train 7 project at Bonny Island.

Train 7 is expected to increase Nigeria LNG’s production capacity from 22 million tonnes per annum to 30 million tonnes, making the development strategically important not only to the gas industry but also to Nigeria’s export earnings and foreign exchange supply.

Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Bashir Bayo Ojulari, described the FID as a major vote of confidence in Nigeria’s upstream investment environment.

He said the project demonstrated the growing commercial viability of gas developments following the Federal Government’s reforms, including fiscal incentives for non-associated gas projects, faster contracting processes and measures to reduce development costs.

The Ima field was discovered more than five decades ago but remained undeveloped for years, underscoring the scale of Nigeria’s challenge in turning its vast gas reserves into commercial production.

NNPC said the Ima project is the fourth major gas development to reach FID under the current administration, after Iseni, Ubeta and HI.

The importance of the investment extends beyond the project itself. More domestic gas supply can strengthen the feedstock base for LNG exports, support power generation and provide fuel for industries, while construction and operations create demand for local contractors, engineering services, logistics and skilled labour.

At the same time, Pertamina is assessing opportunities to enter Nigeria’s upstream market, including producing fields and projects close to final investment decisions.

During discussions with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Pertamina’s Vice-President, Upstream Business Development, Toriq Abdat, said the company was seeking opportunities outside Indonesia as it responds to declining domestic production and changing patterns of oil discoveries.

Pertamina is also considering participation in Nigeria’s 2026 licensing round, which the NUPRC is using to attract new capital into undeveloped acreage and raise national production.

Nigeria is targeting crude oil output of three million barrels per day by 2030, compared with current production of roughly 1.6 million to 1.7 million barrels per day.

NUPRC Chief Executive, Oritsemeyiwa Eyesan, said regular licensing rounds remained a key part of the strategy to attract investors and increase production.

The convergence of fresh gas investment and renewed foreign interest in oil assets is significant for Nigeria’s wider economy. Higher production would increase export earnings, improve foreign exchange liquidity and strengthen government revenue, while greater domestic gas availability could reduce energy costs for industries and support power generation.

The immediate challenge is to turn investor interest into actual drilling, construction and production.

The $800 million Ima FID provides an important signal that projects once considered commercially difficult can move forward when fiscal terms, regulation and financing conditions improve. Sustaining that momentum will determine whether Nigeria can convert its vast hydrocarbon reserves into the investment, energy supply, jobs and foreign exchange needed to accelerate economic growth.