Nigeria’s ambitious effort to revive its flagging oil and gas sector is being undermined by persistent bureaucratic delays, with industry executives warning that a presidential directive to accelerate project contract awards is not being implemented on the ground.
Wole Ogunsanya, chairman of the Petroleum Technology Association of Nigeria (PETAN), told delegates at the Nigeria International Energy Summit 2026 on Monday that contracts are taking far longer to finalise than the six-month timeline mandated by President Bola Tinubu, threatening investor confidence and the country’s production recovery.
“I can tell you today that some of the directives given by Mr President, that we should be concluding tenders within six months, are not happening,” Ogunsanya said, adding that PETAN is actively monitoring contracting activities and finding significant gaps between policy intent and execution.
The warning comes as Nigeria grapples with a dramatic production decline from 2.6 million barrels per day at peak levels to approximately 1.7mn bpd currently, a fall that has cost the country billions in lost revenue and ceded market share to rival producers.
According to a PETAN study presented at the summit, the rate of contracting activity is failing to match the presidential directive calling for contracts to be awarded within six months, with options for five-year terms renewable for two additional years.
The finding suggests that despite increased political will at the highest levels, implementation remains hobbled by entrenched bottlenecks.
Ogunsanya identified prolonged internal approvals and delayed final investment decisions; slow commercial negotiations and contract finalisation; extended regulatory and compliance processes; and funding and financial close delays as four core obstacles fueling delays.
These factors, he argued, are preventing the rapid mobilisation of capital needed to reverse Nigeria’s production decline.
BusinessDay’s findings showed contract approval cycles go on for up to three years in Nigeria compared to six months in Algeria.
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To change the narrative, President Bola Tinubu, on March 1, 2024, issued three executive orders, numbers 40, 41 and 42, a move industry stakeholders said could deal a heavy blow to the outsized corruption and sleaze in Nigeria’s oil industry if well executed.
Executive Order 42, in particular, is a five-page document aimed at addressing the incredible sleaze that hampers the speed of contracting and resultant high cost in the oil and gas industry.
“We are still not concluding contract processes in six months,” Ogunsanya said at the event. “Then [officials] give a positive report back to the president that we are doing what he asked us to. We are monitoring every tender that is going on.”
The contracting delays pose a particular threat given Nigeria’s need to nearly double current production levels.
With the Dangote refinery now operational and requiring domestic crude supply, plus export commitments, the country faces urgent pressure to expand output. Yet projects scheduled to commence in 2026 and 2027 remain mired in approval processes.
At the summit, Ogunsanya emphasised that stable policy and regulatory conditions are essential for the confident deployment of approved capital.
“Investors require predictability and consistency in rules, approvals, and institutional leadership to make long-term commitments,” he said. “Frequent policy shifts or regulatory changes increase risk, causing investors to delay or scale back capital deployment.”
Despite these challenges, PETAN has demonstrated commitment to building local capacity. The association has invested over $150 million in equipment and assets since the last energy summit, focusing on strengthening local technical and operational capabilities.
It has also implemented a two-year graduate internship programme across 120 member companies in collaboration with the Nigerian Content Development and Monitoring Board and operators including Shell, Chevron, Seplat and Renaissance.
Industry stakeholders said the contracting bottlenecks threaten to undermine the potential of Nigeria’s local content regime, which has successfully built indigenous capacity but now requires a steady pipeline of projects to remain viable and productive.
Without bankable projects moving forward, locally developed capabilities risk being stranded.
“Today’s realities see indigenous service companies playing in the land and offshore, but their international counterparts are limited to playing only offshore, with limited projects,” Ogunsanya noted, questioning the sustainability of an ecosystem where locally built capacity cannot be fully utilised.
The issue has taken on added urgency following recent positive developments.
Shell announced potential investments of $20bn in Nigeria’s oil and gas sector over the coming years, while the Bonga North project has launched, paving the way for other key projects.
Experts said these investments could drive significant activity, but only if contracting processes accelerate.
Ekperikpe Ekpo, minister of state for Petroleum Resources (gas) acknowledged the challenge in his opening remarks to the summit’s local content session, calling for a shift from compliance-driven to performance-driven local content that builds globally competitive indigenous companies.
“Government must continue to provide clear, stable, and coordinated policy signals that reward capability development and long-term investment,” Ekpo said, while noting that operators must embed local capacity development into project design as a core value driver.
Industry leaders are calling for collaboration across the entire ecosystem, from the federal government and regulators to national oil companies, international operators and local service providers.
They emphasise that all parties share responsibility for ensuring Nigeria can achieve its production targets.
“We need stability at all levels,” Ogunsanya said. “We need the government, regulators, national oil companies, big collaborations. We don’t have an issue at the lower end of the ladder. We need the people above us to help us ensure that we have this collaboration.”
