By Benson Daniel
The Nigerian National Petroleum Company Limited is set to implement a new framework for Production Sharing Contracts as part of efforts to strengthen investment, improve oil production and enhance the commercial value of Nigeria’s upstream petroleum sector.
The Group Chief Executive Officer of NNPC Limited, Bashir Bayo Ojulari, said the company was ready to work with relevant stakeholders to ensure the framework supports a more competitive and investment friendly operating environment.
Production Sharing Contracts are important instruments through which the Nigerian government partners with international and local oil companies to explore and produce petroleum resources, particularly in deepwater and other technically challenging areas.
The move comes as Nigeria seeks to attract fresh capital into its oil industry and reverse years of declining investment and production challenges. The government has been working to improve the fiscal and regulatory environment in the sector while encouraging operators to increase output from existing assets and develop new fields.
Ojulari has consistently stressed the need for stronger collaboration between NNPC, regulators, government institutions and private sector operators to unlock investment opportunities in the industry. He has also maintained that Nigeria must provide a clearer value proposition for investors while ensuring that petroleum resources generate greater economic benefits for the country.
The new framework is expected to provide clearer commercial terms for stakeholders and support more efficient management of production sharing arrangements. It is also expected to align the contractual environment with ongoing reforms in the petroleum industry.
Nigeria’s upstream sector has faced several challenges in recent years, including high operating costs, crude theft, insecurity, regulatory uncertainty, lengthy project development periods and difficulties in attracting sufficient investment. These factors have contributed to lower production levels despite the country’s significant oil and gas reserves.
The implementation of a more effective PSC framework could therefore play an important role in improving investor confidence and accelerating the development of deepwater assets.
The government is also seeking to increase crude oil production as part of efforts to strengthen foreign exchange earnings and government revenues. Higher production would provide additional resources for the Federation while improving feedstock availability for domestic refineries and other energy related industries.
NNPC has recently intensified efforts to improve operational efficiency and strengthen partnerships across the petroleum value chain. The company has also highlighted the importance of commercial discipline, cost optimisation and improved project execution in achieving sustainable growth.
Ojulari’s position reflects the broader push to transform NNPC into a commercially driven national energy company capable of competing effectively in the global petroleum market.
For investors, the success of the new PSC framework will depend not only on the terms of the contracts but also on how consistently and transparently they are implemented. Industry stakeholders have continued to call for predictable policies, efficient approvals and stronger regulatory coordination to reduce project risks.
The implementation is therefore expected to be closely watched by oil companies and investors seeking opportunities in Nigeria’s upstream sector.
If effectively executed, the new framework could help unlock additional investment, accelerate exploration and field development, increase crude production and strengthen Nigeria’s position as a major oil and gas investment destination.
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