Nigeria’s oil industry must fundamentally rethink how it finances production growth if the country is to achieve its ambitious output targets, according to Ainojie “Alex” Irune, Executive Director at Oando and Managing Director of Oando Energy.
Speaking at the Nigeria International Energy Summit in Abuja, Irune told industry stakeholders that conventional funding sources — including multilateral institutions, trading houses and reserve-based lending — may no longer provide the scale of capital required to drive rapid growth in oil production.
“We may have reached a point where to scale at the pace that we desire as a country, we may need to turn that on its head,” Irune said, pointing to the need for a strategic shift in how the sector is financed.
Nigeria has set near-term oil production targets of 2 million barrels per day (bpd), with mid-term ambitions of reaching 3 million bpd. However, Irune noted that these goals are often announced without clear cost assessments or defined strategies for securing the necessary investment.
Current production stands at about 1.5 million bpd, well below the country’s installed capacity and significantly lower than the 2.5 million bpd recorded a decade ago.
According to Irune, the shortfall highlights deep-seated financing challenges that have stalled efforts to reverse years of declining output driven by aging infrastructure, crude theft and chronic underinvestment.
While Nigeria’s technical expertise in oil and gas remains strong, Irune stressed that access to capital has become the primary bottleneck.
“The technical part we’ve always been good at. That’s the one thing I don’t think anyone can take away from us,” he said. “The question is having the capital to back that execution.”
He called for a recalibration of financing strategies, urging Nigeria to explore government-to-government funding arrangements, particularly with eastern nations, and to encourage international oil companies (IOCs) to deploy what he described as “patient capital.”
Such capital, Irune explained, would better reflect the long development timelines and technical complexities associated with Nigerian oil projects.
Irune’s comments come amid a wave of divestments by major Western oil companies from onshore Nigerian assets, with many firms selling to indigenous operators while retaining deepwater interests. These exits have been influenced by security concerns, regulatory uncertainty, environmental activism and global pressure to cut carbon emissions.
However, Irune argued that Nigerian companies are fully aware of energy transition and carbon reduction imperatives, having been “trained by the best” international operators.
He added that indigenous producers understand how to build governance structures that appeal to global financiers but said better alignment across the sector is still needed.
“The difficult part is really synchronising that with everyone else’s activities, whether it be the government, the other companies and the ecosystem,” he said.
Irune highlighted recent improvements in regulatory collaboration, noting that indigenous operators now hold monthly coordination meetings with the Nigerian National Petroleum Company Limited (NNPC) and regulators. These engagements aim to align industry challenges, ambitions and progress.
“I don’t think the next phase of our growth as a country is going to be led by single stories,” he said. “I think it has to be a collaborative journey where policy meets the right commercial decisions on the right projects.”
Boosting oil production remains critical for Nigeria’s public finances, as crude oil accounts for the majority of foreign exchange earnings and a significant share of government revenue. President Bola Tinubu’s administration has prioritised reviving output, even as it pursues broader economic reforms to reduce the economy’s dependence on oil.
Irune concluded that beyond new sources of capital, sustained improvements in the regulatory and business environment are essential.
“We need to get the regulations right, such as they’re friendly, and I think we’re on that path already,” he said, referencing reforms under the Petroleum Industry Act.
