Experts in the oil and gas sector have itemised measures to be taken to boost the downstream sector in Nigeria in particular and Africa in general. They spoke at the Oil and Trading and Logistics (OTL) 2024 Expo Africa Downstream Energy Week. The theme of the summit was: “Alliances for Growth – Markets, Operations and Policy.”

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, described the downstream sector as a critical component of the energy sector landscape.

He explained that from defining the distribution to retail and marketing, the downstream sector was very vital not only for the energy supply chain, but also for the economies and the digital lives of Nigeria and the African continent.

According to him, over the years, African countries have been in the landscape of significant transformation. The minister said Nigeria was navigating a complex dynamics of the global energy market, right in demand, increase in technological advancement, and, of course, evolving consumers’ expectation.

For him, it is clear that no single entity can fix the road, adding that partnership, both within the continent and globally, are essential for driving growth, innovation, and sustainability in the African downstream sector. He recalled that over the years, Africa’s energy landscape had evolved a significant transformation.

Lokpobiri said: “The downstream sector is a critical component of that landscape, from refining to distribution to retail and marketing the downstream sector, is not only the energy supply chain, but also our economies and our digital lives.

It is good to know that the federal government policies on the economy under this administration begin to yield results as investors’ confidence has continued to go high significantly enhancing the appeal of the Nigerian oil and gas industry and foreign investors.

“As we look toward enhancing the sector contribution to national development, we must recognise that collaboration will be the key to unlocking full potential, especially with the robust effort of the federal government to fully deregulate the downstream sector.

“The full deregulation of the oil sector is anticipated to have more private sector operators, with the expectation of product availability, this opened the door for strategic alliances between government, private sector and international partners.

To remain competitive, therefore, we must leverage on new innovations which offer honest, unprecedented opportunities for improving the beaches, reducing costs and enhancing customer experiences.” He advised companies to be willing to share knowledge, pool resources and build systems that support technological advancement.

He assured that the Federal Government would continue to provide an enabling environment for such collaboration to thrive while providing policy support. Lokpobiri said: “As we look to the future, we must also acknowledge that the world is transitioning into a more suitable energy mix.

This shift presents opportunities and challenges for the African downstream sector. But I must say this, why the demand for fossil fuel will remain for the foreseeable future, we must recognise our continental peculiarity in our developmental plans towards cleaner energy.

“It is imperative, therefore, that we begin to explore how the gas sector can integrate sustainability into its operations, whether to reduce emissions or incorporate new energy into the supply chain. These two will require alliances, alliance with renewable energy players, environmental experts and financial institutions that are committed to supporting this initiative.

Together, we can ensure that African energy transition is inclusive, equitable and in line with global highway goals.” The Special Adviser to President Bola Tinubu on Energy, Mrs. Olu Verheijen, had said the downstream energy sector played crucial roles in the national economy.

She stated that it provided essential energy products that power homes, offices and machineries in the country. He stated that the sector takes raw energy resources and transforms them into usable products that underpin the smooth functioning of our daily lives and livelihoods.

She noted that Nigeria and Africa have significant reserves of energy both fossil fuels and renewables, she stated that however, potential and reality are different things. Verheijen decried that though Nigeria boasts an impressive history of over 80 years in oil and gas production, yet its current output and investment levels did not reflect the country’s true or actual capacity.

She said: “We have stagnated below two million barrels per day of oil production for many years now,

Nigeria boasts an impressive history of over 80 years in oil and gas production, yet its current output and investment levels do not reflect the actual capacity

despite the potential to easily double that figure. “Also, in spite of our holding 38 per cent of Africa’s hydrocarbon reserves, we have been able to capture just four per cent of oil and gas investment in Africa since 2016.

The downstream segment has not been immune to these challenges facing the industry over the years. “It has equally suffered from limited investments, with the added complication of significant fiscal burdens, especially from a long history of petroleum product subsidies.

In recognition of these historical challenges in the petroleum sector, the President Bola Ahmed Tinubu administration set out with a bold reform program to address the critical issues and reposition Nigeria as a more desirable global investment destination for energy projects.

“And these efforts have culminated in some of the following. Number one, a more transparent regulatory environment, a stable regulatory environment and clear delineation of agency roles was a vital first point of reform, making the Nigerian business environment more transparent, efficient and competitive.

“I am pleased to say that we have achieved this by clarifying the regulatory scope of the Nigeria Upstream Petroleum Regulatory Commission, NUPRC and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA), to ensure a stable and predictable regulatory environment for investors.

Number two, unprecedented incentive to attract new investment and promote diversification of Nigeria’s energy portfolio. “We have introduced fiscal incentives to deepen the penetration of CNG LPG and LNG.

These incentives include waivers on import duties and VAT on the sale and distribution of LNG, CNG LPG as well as associated equipment.

Very importantly, this fiscal incentive also covers electric vehicles, to encourage investment in this area as part of our commitment to sustainable energy transition in Nigeria.

“The amount of investments from this initiative, from January till date, is over $500 million US dollars. We have launched the Presidential CNG initiative specifically to create a CNG ecosystem capable of achieving Nigeria’s objective of transiting to cleaner transportation fuels and easing the impact of the removal of fuel subsidies in Nigeria.

The CNG initiative has so far attracted over $175 million in private investments in addition to government financing. And today, Nigeria has more than 125 vehicle conversion facilities, up from seven in 2023.”

Lagos State Governor, Babajide Sanwo-Olu, represented by the Commissioner for Energy and Mineral Resources, Abiodun Ogunlewe, said the potential for energy sector transformation was immense in Africa.

He, however, said that unlocking this potential required the right environment—one that promotes growth, fosters innovation, and includes every voice. He stated that governments had a significant role to play.

He stated that they must establish frameworks that encourage investment, streamline regulations, and ensure energy infrastructure becomes a foundation for broader development.

He said: “An energy transition is not simply about replacing one source with another; it’s about creating an entire ecosystem that encompasses all elements—from exploration and production to storage, distribution, and retail.

“Our goal is to empower every stakeholder by building policies that reduce costs, minimize bottlenecks, and safeguard our citizens’ interests. We also recognize that traditional energy sources, like natural gas, CNG, and LPG, will continue to play a significant role in our energy mix, offering a practical and immediate solution for energy security as we build toward a low-carbon future.”

Chief Executive Officer, OTL Downstream Development in Africa, Joyce Akabogu, explained that the OTL Africa Downstream Energy Week is the continent’s leading downstream energy event for international organizations, policy makers, regulators, development organisations, operators, service providers and consumers in the downstream and midstream energy value-chain.

She stated that participants at the event reviewed, explored and celebrated industry partnerships and improved collaborations. She added that they encouraged mergers, regional and transregional alliances across and between both private and public sectors.

She explained that the discussions were neither entirely new nor in isolation of the global discussions for energy efficiency and global partnerships as enshrined in the Sustainable Development Goals (SDGs).

She said: “We state OTL’s commitment to the SDGs, particularly -1. Goal 7 -which targets Affordable and clean energy; GOAL 9 on Industry innovation and infrastructure particularly for promoting energy efficiency. and; Goal 17: Partnership – as depicted in the theme of this year’s event.

“We must equally stress that our alignment fully recognises the African context and the realities of balancing fossil fuels and renewable energy for energy efficiency at the continent’ pace.”

Chairman of the Advisory Board, OTL Africa Downstream Energy Week, Mr. Adetunji Oyebanji, said the the OTL Africa Downstream Energy Week had grown into a vital platform for discourse, collaboration, and innovation within Africa’s downstream sector.

He stated that each year, the event brings together the leading minds across the energy value chain to exchange insights and ideas and to strengthen the connections that drive our industry forward. He said: This year’s event took place against the backdrop of two major industry milestones.

First, the recent full deregulation of Nigeria’s downstream sector, along with the shift to a market-based gasoline pricing system, marks a fundamental change in our market.

Deregulation introduces new opportunities for competition, transparency, and efficiency, while market-based pricing sets a pathway for stability and fair value distribution across the supply chain.

“Secondly, we celebrated the commissioning of the long-awaited Dangote Refinery, a project of enormous scale and significance. With a capacity of 650,000 barrels per day, this refinery is not only a testament to Nigeria’s industrial capacity but a transformative development for the entire West African region.

Together, these two milestones will shape industry dynamics for years to come, impacting everything from refining operations and distribution to market competition and consumer access.”

Authority Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Engineer Farouk Ahmed, said this was the watershed moment of the energy sector in Nigeria.

He stated that Nigeria was poised to actualise the targets of three mbpd crude oil production, projected 10 BSCF/D domestic gas utilisation and robust domestic refining capacity leading to Nigeria becoming a net exporter of petroleum products.

He stated that indeed, the Nigerian petroleum industry currently has all the complement of enabling structures to facilitate its growth and success. He assured that the NMDPRA was fully committed to supporting all the reform initiatives of Mr. President in the midstream and downstream sector through enhanced regulatory processes including efficient issuance of licenses, permits and authorisations.

Ahmed said that within the midstream and downstream sector, strong collaborations are required between regulatory agencies to facilitate ease of doing business, and between businesses to pool resources required for delivering complex projects.

He added that it was also necessary to expand regional collaborations to enhance cross-border trade; and for the industry to establish a robust mechanism for sharing of best industry practices and capacity optimisation.

According to him, the NMDPRA will explore mechanisms of facilitating the establishment of an association for Energy Regulators within West Africa which may eventually integrate with the existing East African and South African regional regulators association, into a pan African Energy Regulators association for streamlined regulations and policy formulations.

Ahmed said: “The Nigerian petroleum market is indeed undergoing major transformations. Our aspired target is to achieve a fully liberalised and matured market for all petroleum products and natural gas, where the market fundamentals lead to robust price discovery and attractive investment opportunities.

“The Federal Government is deepening the liberalisation of the energy market through robust policies, and provision of generous incentives to encourage investment by both domestic and international companies.

“CNG is also being promoted as a veritable alternative to PMS and AGO as mobility fuel. In this regard, several interventions are being implemented to support the expansion of CNG infrastructure through the Pi-CNG, the Decade of Gas Program and the MDGIF.

Progressively, auto-CNG infrastructure is being expanded and eventually, most retail outlets would be required to install CNG add-ons to service the growing number of CNG vehicles nationwide. The NMDPRA is indeed working closely with all stakeholders to accelerate this much needed CNG expansion.”

On outlook from 2025to 2027, he assured that NMDPRA remained resolute and fo – cused on leveraging the regulatory framework for creation of extensive value from Nigeria’s crude oil and gas resources.

He reiterated the Authority’s commitment to strengthen collaborations on implementing safety measures across the midstream and downstream ecosystem to address the concerns of the public on safety of operations in the sector.

He stated that with regard to alliances, the agency would continue its quarterly domain specific engagements (DSE) with key stakeholders, and on-demand engagements with other relevant parties to address ongoing and emerging concerns.

He added that it shall also continue with its regional and global engagements related to assurance of energy security, and successful global energy transition.

Last Line

“Strategic collaborations and alliances are indeed required for the industry to effectively surmount the emerging and conflicting challenges related to climate action, geopolitical tensions, market stability, and ever-growing energy demand.

“Just as food security is a priority in the agriculture sector and national security is pivotal to the protection of life and property, Energy security is critical and important for peace, economic prosperity and sustainable development of all sectors for our national survival. Therefore, we must give it the priority it deserves,” Ahmed said.

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