On September 7, 2025, Nigeria’s federal government extended a strong invitation to major engineering, procurement, and construction (EPC) companies to return to its oil and gas industry. Speaking at a London conference hosted by the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry, Minister of State for Petroleum Resources, Heineken Lokpobiri, outlined sweeping reforms aimed at reversing the exit of these firms caused by past challenges.
Lokpobiri emphasised that Nigeria has addressed long-standing barriers that previously pushed EPC giants like Saipem, TechnipFMC, and KBR away. These barriers included lengthy contract approval processes, inconsistent regulations, security risks, and financial uncertainties. The cornerstone of these reforms is the Petroleum Industry Act (PIA), enacted in August 2021, which streamlined tax and royalty frameworks, clarified regulatory processes, and enhanced security through partnerships with the Nigerian Navy and private security outfits. The minister assured attendees that these changes, effective since the PIA’s implementation, have created a stable and investor-friendly environment.
The London conference, titled the Deepwater Investment Summit, focused on encouraging international oil companies (IOCs) such as Shell, TotalEnergies, and ExxonMobil to finalise their investment decisions in Nigeria’s deepwater fields. Lokpobiri stressed that active IOC projects are critical to attracting EPC firms, which possess the technical expertise and capacity for complex deepwater operations. He noted that companies like Chevron, already benefiting from the reforms, could attest to their effectiveness.
To make Nigeria’s deepwater sector competitive globally, the government introduced incentives under the PIA and subsequent regulations in 2022. These include reduced royalty rates of 5% to 7.5% based on water depth, uncapped cost recovery allowing companies to recoup all development expenses before profit-sharing, tax exemptions for frontier exploration, and expedited contract approvals. Lokpobiri clarified that these benefits extend to EPC contractors, who he described as vital for executing large-scale projects due to their advanced technology and engineering capabilities.
The minister highlighted Nigeria’s deepwater basins, particularly in the Niger Delta, as holding vast untapped reserves. He urged EPC firms to view Nigeria through the lens of recent successes rather than past difficulties, citing improved security and streamlined operations as evidence of progress. Lokpobiri called for collaboration, emphasising that the government is committed to removing obstacles, rewarding efficiency, and fostering long-term partnerships.
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The conference concluded with renewed commitments from the government, IOCs, and EPC representatives to revive stalled projects, promote local participation, and drive mutual prosperity. Lokpobiri underscored that Nigeria’s success hinges on the return of EPC expertise to develop its deepwater potential fully.
Adding to the optimism, on August 23, 2025, U.S.-based Vaalco Energy, listed on the New York Stock Exchange, announced plans to re-enter Nigeria’s oil market. Vaalco is negotiating with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to acquire a production-sharing contract in Oil Mining Lease (OML) 145, a dormant asset in the Niger Delta. This move signals growing confidence in Nigeria’s reforms and could spur further activity in the sector.
Nigeria’s push reflects a broader strategy to revitalise its energy industry, a key driver of its economy. By resolving past issues and offering globally competitive incentives, the government aims to attract foreign investment, create jobs, and boost economic growth. Industry observers are watching closely to see if more EPC firms and IOCs follow Vaalco’s lead, potentially marking a turning point for Nigeria’s oil and gas sector.
