Maximizing the potential of marginal fields is not just an economic choice but a strategic imperative for resource-rich nations,” states Dr. Fatih Birol, Executive Director of the International Energy Agency (IEA).
This powerful declaration resonates deeply within Nigeria, a nation whose economic heartbeat has long been synchronized with the rhythm of its oil and gas sector.
As of 2024, Nigeria produced approximately 1.4 to 1.6 million barrels per day (mb/d), making it Africa’s largest oil producer, yet still operating below its OPEC quota of about 1.8 to 2.0 mb/d. The country now aims to significantly increase its production capacity to about 2.2 to 2.5 mb/d in the next five years, with a strategic focus on:
- Expanding participation
- Increasing reserves
- Reducing production costs
At the center of this strategy lies the diligent development of its marginal fields.
Once overlooked, these fields are now pivotal to Nigeria’s ambition to diversify resources, attract investment, and foster indigenous participation in the energy sector.
These fields, once overlooked, are now central to Nigeria’s ambition to diversify resources, attract investment, and foster indigenous participation.
Indeed, marginal fields represent a strategic frontier for Nigeria’s oil and gas sector. According to the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), a marginal field is defined as any discovered field left unattended for at least ten years from its discovery date, or one identified as such by the President.
These fields typically possess characteristics that make them less attractive for large-scale development by international oil companies (IOCs). Factors include:
- Marginal economics under prevailing fiscal terms.
- Only an exploration well drilled at discovery with no follow-up for over a decade.
- Unique crude characteristics requiring unconventional production methods.
- High gas/low oil reserves.
- Fields abandoned by leaseholders for economic or operational reasons.
Historically, these smaller onshore or shallow-water oil blocks—often producing between 2,000 to 10,000 barrels per day—were deemed too modest for the millions-of-barrels operations of the IOCs. But they are ideally suited for local Nigerian companies seeking entry into the oil market.
That strategic shift began under the administration of former President Olusegun Obasanjo, which in 2003–2004 rolled out the first awards of marginal fields and other oilfield assets to indigenous and state operators. Twenty-four marginal fields were awarded, a landmark initiative that marked a clear move toward involving local companies in Nigeria’s upstream operations, thereby fostering indigenous capacity and strengthening local content development.
The strategic imperative is further echoed by Dr. Musa Yusuf, CEO of the Centre for Promotion of Private Enterprise (CPPE), who underscores the importance of private-sector participation in revitalizing Nigeria’s oil and gas industry:
“Private enterprise must be at the forefront of Nigeria’s energy development. We need policies that incentivize investment, foster innovation, and promote local content. The private sector’s agility can accelerate Nigeria’s journey towards energy security and diversification.”
He further stresses:
“Investment in infrastructure, technology, and human capital is essential. Government must create a business environment that unleashes private-sector potential.”