The announcement of Udobong (Udy) Ntia as a member of NNPCL’s executive leadership, responsible for overseeing Upstream operations, was met with a collective sigh of relief across the industry.
“Finally,” one industry colleague remarked. “Whew, that’s a big one,” said another. “Now, we move,” was the simple but optimistic message I received from a third friend, who then immediately picked up the phone for a twenty-two-minute conversation. We speculated on how Udy came to be appointed, what he understood about the current state of affairs at NNPCL, what his mandate might entail, and—most importantly—what key performance indicators (KPIs) would define his success in the role.
However, this piece isn’t about Udy, as much as his appointment symbolizes the larger issue facing Nigeria’s oil industry. The real story here is the country’s sluggish approach to addressing the challenges in its key economic sector, by entrusting the fate of its “golden goose” to those least equipped to drive change—especially amidst the growing economic crisis.
Outsiders to the sector might find the industry’s euphoric reaction to Udy’s appointment puzzling. After all, as the old English adage goes, “a tree cannot make a forest.” Yet, in this case, the appointment of this single leader to a pivotal role within the underperforming NNPCL is a meaningful and symbolic step forward. As the late Martin Luther King Jr. famously said, “The time is always right to do what is right.” Ideally, the right leadership should have been put in place at NNPCL years ago. The next best time is now. The importance of having the right person in the right position—especially within NNPCL’s upstream division—cannot be overstated. Here’s why:
Upstream Operational Excellence Drives Profitability
The performance of the upstream sector is directly tied to the profitability of the entire oil and gas value chain. In an industry under increasing pressure to produce more oil at lower costs, operational excellence is non-negotiable. For NNPCL, the national oil company tasked with managing Nigeria’s vast hydrocarbon resources, the goal should be to optimize returns from its upstream assets.
Yet, despite holding world-class reserves, NNPCL has consistently underperformed compared to its global peers. Take Petrobras, the Brazilian NOC, for example. With just over 10 billion barrels of oil reserves, Petrobras produced 2.24 million barrels per day (bpd) in 2023. In stark contrast, NNPCL, with over 37 billion barrels in reserves, has struggled to maintain a production rate above 1.3 million bpd over the past 17 months. This discrepancy underscores the underutilization of Nigeria’s oil resources and highlights the inefficiency of NNPCL’s operations. As production costs rise and Nigeria’s fiscal breakeven price climbs, it becomes even more critical for NNPCL to improve efficiency in its upstream operations.
The most successful national oil companies (NOCs) have learned to adopt the operating philosophies of international oil companies (IOCs), who relentlessly pursue operational excellence to maximize profits. These companies compete by driving efficiency in their upstream operations where they make significant profits, which in turn supports their downstream businesses. To achieve similar success, NNPCL must attract and retain the best talent—especially those with experience in IOC-level operations. The clock is ticking, and a leadership overhaul could not come soon enough.
Nigeria Is Sitting on Gold—Waiting to Be Mined
Nigeria is literally sitting on vast reserves of oil and gas, much of which remains underexplored and underdeveloped. NNPCL holds full or partial interests in over 50 oil mining leases across the Niger Delta, which provide access to over 20 billion barrels of oil and more than 100 trillion cubic feet of natural gas. Despite this, the country’s oil production has been in steady decline over the past decade.
A major factor in this decline appears to be the gradual transfer of oil and gas ownership to local companies, which began in earnest about ten years ago. This shift in ownership has coincided with a 40% drop in production and a 70% decrease in investment in the sector. As the divestment process continues, local companies will be responsible for over 80% of domestic oil and gas operations and around 50% of Nigeria’s total oil production. NNPCL, now a joint venture partner with the remaining IOCs and a growing number of local independent operators, holds significant operational and strategic influence over how these resources are exploited.
What is sorely lacking, however, is the leadership capable of steering these assets toward maximum value. Nigeria is at a critical juncture in its oil journey, and without clear, decisive leadership, the full potential of these resources will remain untapped.
Quality Execution Must Match Quality Strategy
To unlock the true value of Nigeria’s upstream sector, the quality of execution must match the quality of strategic thinking. Structural reforms, innovation in contracting models, and alignment of incentives between NNPCL and its JV partners are key to driving operational fluidity. But strategy alone will not suffice—execution must follow. It’s essential that NNPCL develops the capacity to not only design a winning strategy but also deliver on it effectively, ensuring that Nigeria’s hydrocarbon resources generate substantial value via a well thought out resource to production strategy.
Drill, Baby, Drill
In the oil industry, there’s only one way to create value: by drilling to extract hydrocarbon from the subsurface. Drilling new wells, re-entering existing ones, and restarting shut-in wells—all while doing so efficiently, safely, and cost-effectively. While getting the oil out of the ground is essential, ensuring that it reaches the market—“getting the damn oil in the damn tank,” as my colleagues in Texas would colloquially put it—is even more critical.
At this critical juncture, the appointment of Udy Ntia to lead NNPCL’s upstream operations is symbolic of a larger need for urgent, effective leadership in Nigeria’s oil and gas sector. However, true transformation will only come when NNPCL is empowered with the right strategies, the right talent, and the operational excellence needed to unlock the full potential of Nigeria’s vast oil and gas resources. Time will tell whether the industry’s collective optimism is well-placed or whether the lethargy that has plagued the sector will continue to hold the country back.
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About the Author
Dimeji Bassir is an oil and gas executive with over twenty-five years global experience working with multinational operators and oilfield service companies. In the course of his career, he has held various operational, consulting, and commercial roles with a number of multinational operators and service companies. Bassir currently leads Ofserv, an independent consultancy specializing in subsurface engineering, project management, drilling performance improvement, and reliability services. Before Ofserv, Bassir was the Country Manager for Nigeria at GE Oilfield Technology and a Drilling Reliability Consultant at GE Energy Services. He also served as a Drilling Performance Engineer for clients such as BP, Shell International, and ConocoPhillips, and held field engineering positions in both onshore and offshore drilling operations with Baker Hughes, Halliburton, and Chevron.