Energy operators push local financing, fresh exploration to unlock sector growth

INDUSTRY operators have called for increased domestic financing, oil exploration and a fully liberalised gas market to unlock the energy potential, attract investment and strengthen indigenous participation in the sector.

Operators made the call, at the 2026 Annual Energy Conference of the Association of Energy Correspondents of Nigeria (NAEC) in Lagos, after examining barriers to asset acquisition, financing constraints, declining oil reserves and the reforms needed to drive sustainable growth across the oil, gas and power sectors.

General Manager, Corporate Communications, Oando Plc, Mrs. Alero Balogun, stated Nigeria should develop a robust domestic financing ecosystem to bridge the funding gap created by the reluctance of international lenders to support African energy projects.

Balogun said the global lending environment had become increasingly unfavourable to oil and gas investments in Africa, creating a mismatch between the capital required by the sector and the financing international institutions were willing to provide.

“There is a mismatch between the kind of capital that Nigeria or Africa’s energy sector requires and what the international lending system is currently prepared to provide,” she noted.

She argued that Nigeria could no longer depend predominantly on foreign capital to finance long-term energy projects, stressing the need to mobilise local funds to support indigenous operators and expand investment across the value chain.

“Nigerians have to start to build our own financial ecosystem so that we are doing the financing ourselves,” Balogun said.

According to her, the capital-intensive nature of oil and gas operations requires patient, long-term financing, which has become increasingly difficult to secure internationally.

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She identified operational risks, policy inconsistencies and regulatory uncertainty as some of the factors discouraging foreign lenders, urging the country to improve its investment climate while strengthening domestic financial institutions to support energy development.

Also, speaking at the conference, President of the Nigerian Association of Petroleum Explorationists (NAPE), Mrs. Cecilia Ajayi, called for intensified exploration in frontier and mature basins to replenish the declining oil reserves and safeguard future production.

Ajayi expressed concern that the country’s reserves had declined from approximately 39 billion barrels to 37 billion barrels, warning that sustained exploration was necessary to reverse the trend.

“We continue to advocate for more exploration so that as we are depleting the current reserves, we are replacing,” she said.

She urged the government to introduce fiscal and regulatory incentives to encourage investment in frontier basins, where significant hydrocarbon potential remains untapped.

Ajayi also advocated reforms to frontier licencing framework, proposing that investors should be allowed to undertake limited technical assessments of assets before making full financial commitments, including the payment of signature bonuses.

She cited Ghana’s approach to frontier exploration as a possible model for Nigeria, arguing that allowing investors to evaluate assets before committing substantial funds could reduce investment risks and attract more exploration capital.

Beyond frontier basins, she called on operators to deploy modern technology to improve recovery from mature fields through deeper drilling, field redevelopment and the recovery of previously bypassed oil.

“Let’s take advantage of technology to do what needs to be done,” she said.

Meanwhile, the Acting Managing Director and Gas Asset Manager of Neconde Energy Limited, Engr. Chichi Emenike, said Nigeria’s ambition to develop a thriving gas economy would remain constrained without a bankable domestic market that guarantees investors reasonable and predictable returns.

Speaking during a panel session on market liberalisation, Emenike argued that investors needed assurances that their capital could be recovered within reasonable timelines, particularly given the high costs associated with gas exploration, production, processing and transportation.

“No investor is doing Red Cross. No investor is doing charity. Everybody doing investment expects to recover principal plus X,” she said.

She identified inadequate pipeline infrastructure, limited market development and government-controlled pricing as major obstacles to investment in the domestic gas sector.

According to her, gas projects require substantial capital because drilling, pipeline construction, processing facilities and equipment maintenance involve significant dollar-denominated expenditure.

She warned that when prices fail to reflect investment costs and financing conditions, projects take longer to recover their capital, discouraging investors from committing funds to new developments.

“The market still needs to be fully liberalised,” Emenike said, adding that a bankable market with reliable paying customers was essential to attract the investments required to achieve Nigeria’s gas development ambitions.

She maintained that gas could generate employment, strengthen energy security and support economic growth, but stressed that these benefits would remain limited without adequate infrastructure and a commercially sustainable market.

Speaking on behalf of the company, the Deputy General Manager, External/Country Communication, Senan Murray, said TotalEnergies had taken two major final investment decisions (FIDs) in just over a year, reflecting opportunities for further investment.

He cited the Ubeta gas development, for which the company took an FID with the Nigerian National Petroleum Company Limited (NNPC) and its partners in June 2024, and the Ima gas project, which reached FID in September 2026.

“These are exciting times, the environment is now very amenable to business, and we will see even more in the coming months and years,” Murray said.

He added that both projects were designed to operate without routine gas flaring, reflecting the company’s commitment to reducing emissions while expanding energy production.

Murray also highlighted TotalEnergies’ collaboration with NNPC to improve methane monitoring across its operational sites using its proprietary AUSEA technology.

He said effective monitoring would help operators identify and control methane emissions, supporting efforts to improve the environmental performance of oil and gas operations.