Gas
Assessing NNPC investment risks and gas transition plans in Nigeria
Experts warn that a significant share of planned upstream petroleum projects in Nigeria faces financial risks under global climate scenarios.
Key points
- Research indicates 38 per cent of planned upstream investments face break-even risks.
- Analysis shows a gap between national transition targets and company communications.
- Gas expansion targets face hurdles from infrastructure and domestic market shortfalls.
What happened
Analysts meeting in Abuja have highlighted fiscal vulnerabilities in Nigeria's petroleum sector expansion. According to findings presented by the Natural Resource Governance Institute, nearly two-fifths of planned upstream capital allocation could fail to recover costs if global climate commitments are met. The discussions, hosted by the Inclusive and Sustainable Development Research Centre, the Centre for Energy, Finance and Development, and NRGI, focused on the strategic direction of the Nigerian National Petroleum Company Limited.
Why it matters
Fuel exports accounted for 85.9 per cent of merchandise exports in 2025, according to World Bank figures, underscoring the sector's vital role in public finances. However, experts noted that a large portion of new gas output is designated for overseas shipments rather than local industrial needs. Furthermore, electricity infrastructure challenges remain acute, with grid transfer capability resting at roughly five gigawatts compared to over 13 gigawatts of installed capacity, while gas-bill payment performance stood at 40 per cent in 2024. Media reviews also revealed that only a small fraction of public statements by NNPCL reflected alignment with the national net-zero target.
What comes next
Stakeholders emphasized the need for rigorous commercial evaluations before approving long-lived petroleum projects. Policymakers and company leaders are urged to coordinate closely to ensure that capital deployment supports both fiscal stability and broader environmental objectives.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
72.9% of electricity in Nigeria came from gas in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
