Nigeria's independent oil producers are urging the government to radically simplify its tax and levy framework, warning that the current system threatens to reverse three years of investment momentum in the country's energy sector.
At the 25th NOG Energy Week on Tuesday, Adegbite Falade, chairman of the Independent Petroleum Producers Group, laid out the challenge starkly. More than 270 separate fees, taxes and levies now apply to operators, he said, making Nigeria's burden heavier than any other domestic sector and among the world's most onerous.
"The cumulative weight of these charges risks cancelling out the benefits of the Petroleum Industry Act," Falade told the gathering of international oil executives in the capital.
Smaller operators working mature, lower-margin fields face existential pressure, he warned. Some may abandon assets entirely rather than navigate the complex levy structure.
The numbers show why momentum matters. Production has climbed to roughly 1.6 million barrels a day between January and May, up sharply from below 1 million barrels a day just years ago.
In May alone, Nigeria exceeded its OPEC quota for the first time in nearly a year.
Investment has followed. Since 2023, upstream operators have committed more than $8 billion to new projects, including Shell's $5 billion Bonga North venture, a $2 billion gas play at the HI field, and TotalEnergies' Ubeta scheme.
Last year regulators approved 28 field development plans valued at $18.2 billion combined, according to figures Falade cited. These unlock 1.4 billion barrels of recoverable oil and 5.4 trillion cubic feet of gas reserves.
Nigeria's share of total African upstream investment decisions has jumped to nearly 40% in two years, up from roughly 4% a decade earlier, he noted.
Yet barrels and dollars tell only half the story, Falade insisted. Real progress means creating Nigerian jobs, building domestic refining capacity, developing gas infrastructure for power and fertiliser, and cultivating homegrown engineers and technicians.
"A nation that extracts crude but cannot refine it operates from weakness," he said.
Falade called on government to abandon what he termed a "fee-collection mindset" and embrace investment facilitation instead. Harmonising charges across agencies would eliminate duplication and boost transparency, he argued.
He also flagged a deepening talent crisis as experienced professionals exit following major oil company divestitures. Developing Nigeria's workforce, he stressed, is "business survival" not charity.
The IPPG chief urged lawmakers to revisit the Petroleum Industry Act, the 2021 law that reformed Nigeria's energy fiscal regime and regulatory structure. A comprehensive review five years on would clarify implementation gaps and formally encode presidential directives issued since passage, he said.
On gas development, Falade noted Nigeria holds the world's tenth-largest reserves yet remains vastly underexploiting this strategic asset.
