The Nigerian National Petroleum Company Limited (NNPC) could see its oil production slashed by half by the late 2030s due to a heavy portfolio of sub-commercial assets, global energy consultancy Wood Mackenzie has warned.
In a detailed assessment following the exit of former Group CEO Mele Kyari, Woodmac experts highlighted critical operational and strategic challenges facing NNPC, stressing the urgent need for new, viable projects to ensure long-term sustainability.
“What’s unique to NNPC is (that) unlike a lot of other National Oil Companies (NOCs)… most of its production and its assets are non-operated,” said Ian Thom, Woodmac’s Director of Upstream Research, in a podcast titled “A New Era for NNPC and Nigeria’s Upstream Oil & Gas Sector.”
Woodmac’s new benchmarking tool reveals that while NNPC’s short-term oil output is projected to peak in 2026, a dramatic decline is likely without significant investment. “As we move further out towards the late 2030s, production could be half of what it is today,” Thom added.Despite holding vast untapped resources, much of NNPC’s reserves are classified as sub-commercial, making them economically unviable under current conditions.
“It needs more projects in the pipeline,” Woodmac said, warning that infrastructure bottlenecks and poor commercial frameworks continue to stifle growth, especially in the gas sector.Mansur Mohammed, Head of West Africa Upstream Content at Woodmac, pointed to Nigeria’s enormous deepwater potential.
“Bonga North took FID last year, and it is significant because it was the first deep water project to get approval since 2013,” he noted.NNPC’s high operating costs also emerged as a red flag. “It does have a higher operating cost than a lot of its peers… loss of barrels, local content legislation—all of that adds to a higher cost base,” the analysts noted.
As oil majors shift away from onshore and shallow waters, indigenous companies like Oando, Seplat, and Renaissance now carry more responsibility.
However, financing remains a major hurdle. “NNPC holds up to 60% in these JVs and will need to find alternative financing options,” Woodmac said, as the era of international oil companies “carrying” NNPC’s share appears to be over.
Despite significant gas reserves across the Niger Delta, only about 20% are deemed commercially viable due to limited infrastructure.
“The OB3 pipeline, delayed for years, is key to unlocking those volumes,” the analysts said.With President Bola Tinubu setting ambitious 2030 targets—raising oil output to 3 million bpd and attracting $60 billion in investment—Woodmac’s report underscores the steep road ahead for Nigeria’s energy sector.
