Nigeria’s Oil Valued at N341tn Trapped in Untapped Fields — Report

A new industry report has revealed that Nigeria has an estimated ₦341 trillion worth of crude oil resources lying idle in undeveloped fields, raising concerns over missed opportunities for revenue generation, foreign investment, and energy security. The findings underscore the urgency for the government and industry stakeholders to take decisive action in unlocking these stranded assets, particularly at a time when the nation grapples with fiscal pressures, dwindling foreign reserves, and rising debt levels.

According to the report, the undeveloped oil reserves are scattered across both onshore and offshore fields, including marginal assets awarded to indigenous operators that remain largely unexploited. The inability to develop these reserves has been attributed to multiple challenges, including regulatory bottlenecks, financing difficulties, insecurity in host communities, and global energy transition pressures that are reshaping investor appetite for fossil fuels.

Energy analysts warn that if these reserves remain dormant, Nigeria risks losing billions of dollars in potential earnings and weakening its position in the global oil market. Crude oil still accounts for over 70 percent of Nigeria’s export earnings and more than half of government revenues, making the effective utilization of these resources a crucial economic priority.

The report highlighted that several marginal fields awarded in the last licensing round have yet to achieve first oil due to delayed funding arrangements, technical capacity issues, and prolonged disputes over ownership and operating rights. This is despite government assurances that the 2020 marginal field bid round would boost indigenous participation and contribute significantly to national output.

Industry experts believe that unlocking the ₦341 trillion trapped in undeveloped reserves requires urgent reforms in Nigeria’s oil and gas governance framework. They note that while the Petroleum Industry Act (PIA) 2021 provided some clarity on fiscal regimes and host community relations, significant gaps remain in terms of policy stability, investor incentives, and security guarantees for operators.

Commenting on the findings, oil and gas analyst Dr. Michael Adesina said Nigeria cannot afford to let such vast resources remain stranded. “At a time when the world is gradually shifting away from fossil fuels, it is critical for Nigeria to maximize value from its hydrocarbon resources. Every delay in developing these assets represents lost opportunities for revenue, jobs, and energy supply stability,” he explained.

Adesina further argued that with global majors divesting from Nigerian onshore and shallow-water assets, indigenous operators now face the burden of funding and managing these assets under challenging conditions. “Without access to affordable financing and technical partnerships, many of these companies may never move beyond paper ownership,” he added.

The report also warned that insecurity in oil-producing regions remains a major deterrent to investment. Persistent pipeline vandalism, crude theft, and community unrest have not only reduced current output but also discouraged operators from committing to new developments. Nigeria’s oil production has repeatedly fallen below its OPEC quota in recent years, largely due to these disruptions.

In addition to domestic constraints, the global energy transition presents a further challenge. International financial institutions and investors are increasingly prioritizing renewable energy projects, with many withdrawing from oil and gas funding altogether. This trend places additional pressure on Nigeria to find innovative ways to finance the development of its untapped reserves before they lose value in a decarbonizing world.

Despite these concerns, stakeholders insist that the situation can be reversed if urgent measures are implemented. Recommendations from the report include creating special funding mechanisms for indigenous oil operators, streamlining regulatory processes to shorten approval timelines, and enhancing collaboration with host communities to reduce conflicts.

Furthermore, experts advise that Nigeria should prioritize the development of gas-rich fields in line with the government’s Decade of Gas initiative, which aims to position natural gas as the country’s transition fuel. With global demand for cleaner fuels rising, Nigeria’s vast gas reserves could offer a more sustainable pathway for monetizing stranded hydrocarbon assets while reducing carbon emissions.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which oversees the management of oil and gas resources, has recently announced plans to work with investors to accelerate field development. However, industry players remain cautious, stressing that unless clear incentives and security assurances are provided, the undeveloped reserves valued at ₦341 trillion may remain locked for years to come.

The economic implications of the delay are far-reaching. Beyond lost government revenue, the country also risks missing out on employment opportunities for thousands of skilled and unskilled workers, as well as the chance to stimulate local content development in engineering, fabrication, and services.

Economic analyst Ifeoma Nwachukwu emphasized that Nigeria must act with a sense of urgency. “Oil will not remain the dominant source of global energy forever. Countries that fail to maximize their reserves now may end up with stranded assets that have little or no commercial value in the future. Nigeria needs a fast-track approach to field development, supported by transparent policies and investor-friendly regulations,” she said.

The report concludes that unless Nigeria addresses these challenges decisively, the estimated ₦341 trillion in untapped oil wealth will remain a symbol of lost potential rather than a catalyst for economic growth.

As the nation continues to seek alternative revenue sources and grapple with rising food and fuel prices, experts say unlocking the value of its undeveloped oil fields could provide the much-needed fiscal relief and long-term stability. Whether policymakers can translate this awareness into practical action remains to be seen.