For decades, Nigeria’s oil industry has faced a multitude of challenges. Despite having vast quantities of crude, the mismanagement of revenue, weak agreements with international oil companies, an underinvestment in infrastructure, and widespread oil theft have left many opposed to the ongoing production of crude. Now, Nigeria has high hopes for its renewable energy sector, as it looks to diversify its energy sources and boost energy security over the coming years.
Oil theft has long been a problem in Nigeria, affecting both the financial gain from oil projects and health and safety in the sector. A committee, established earlier this year, assessed some of the oil sector’s challenges in Nigeria, including oil theft, bunkering operations, illegal export networks, and alleged compromises within regulatory and security systems. The committee published a report on its findings, which suggested that the government could significantly mitigate the country’s oil losses.
Satellite and agency tracking revealed at least 589 oil leaks across Nigeria in 2024, most of which were due to theft and sabotage. The Nigeria Extractive Industries Transparency Initiative estimated that, over 12 years, Nigeria lost 619.7 million barrels of oil, with a total value of $46.2 billion. In addition, Nigeria lost approximately $1.84 billion worth of petroleum products from its refineries over nine years.
While the government seeks to make its oil industry safer and more efficient, and, importantly, more profitable, many Nigerians are calling for the government to abandon its oil ambitions in favour of clean energy sources. While the government continues to back fossil fuels, it also sees a future for Nigeria in green energy, having set a target for net-zero carbon emissions by 2060 during the COP26 climate summit.
Nigeria’s Energy Transition Plan (ETP) led the way for the passing of the country’s Climate Change Act in 2021. The government then established the Energy Transition Office to oversee the implementation of the ETP, with a focus on six pillars – improved energy access, poverty reduction, modern energy access, job preservation, a sustainable transition, and legislation. The ETP aims to reduce emissions in several sectors, including power, transport, oil and gas, cooking, and industry. The ETP was revised and updated in 2024 to incorporate recent data and policy developments.
The government expects the ETP to support widespread job creation, with an estimated 340,000 jobs created by 2030 and up to 840,000 jobs by 2060. Nigeria views natural gas as a transition fuel and as key to its shift away from dirtier fossil fuels. However, to achieve its aims, the government will need to establish new green energy industries and attract investment for large-scale projects.