Navigating Nigeria’s energy sector

Nigeria's energy sector is on the verge of exciting developments in 2025, with key reforms and increased investments paving the way for growth. Ayodele Oni, Partner at Bloomfield Law Practice, sheds light on the sector's prospects in a recent interview. Looking back at 2024, the sector saw notable progress, especially in the oil and gas industry. The Port Harcourt Refinery has resumed operations, and the highly anticipated Dangote Refinery is now operational, marking significant milestones. Experts are optimistic about further regulatory changes that could present lucrative opportunities for investors. In a conversation with CNBC Africa, Ayodele Oni discussed the emerging trends and what they signify for Nigeria's energy landscape this year. As the sector gears up for advancements, several key areas are expected to shape its trajectory. From increased production in the oil and gas sector to a growing emphasis on CNG and LPG, the energy landscape is set for dynamic shifts. Government initiatives such as the Subsidy Substitution Programme are driving the push towards cheaper and more sustainable energy solutions like CNG. This initiative aligns with the broader goal of enhancing energy access and affordability for consumers. Additionally, the power sector is poised for enhancements, with more states taking control of electricity markets and fostering collaborative efforts between regulatory bodies. The conversation also delved into the outlook for oil pricing and local production targets. While the government envisions reaching 3 million barrels per day, Ayodele Oni believes that surpassing this target might be challenging, but incremental progress is within reach. With regulatory hurdles easing for local players, opportunities abound for boosting crude production and expanding reserves. The indigenous players in the industry, such as Ando and other new entrants, are expected to play a crucial role in driving growth and innovation. The recent divestments and bid rounds have witnessed the emergence of fresh faces in the market, signaling a shift towards indigenous participation. Moreover, the focus on greenfield projects presents a window of opportunity for investments and advancements in the sector. Gas projects, in particular, hold promise as a viable transition fuel, aligning with the global trend towards cleaner energy sources. The push for gas utilization and the development of gas infrastructure are expected to gain traction, supported by government policies promoting gas as a cost-effective and eco-friendly alternative. The buzz around potential acquisitions and project expansions signifies a growing appetite for green energy initiatives in Nigeria. As energy costs remain a critical concern for businesses, initiatives like the CNG Substitution Programme aim to alleviate the financial burden on consumers. Despite potential price fluctuations in the energy market, the transition towards cleaner and more efficient energy solutions remains a key focus for sustainable growth. With a keen eye on market dynamics and regulatory reforms, Nigeria's energy sector is bracing for a transformative year ahead.