The Society of Energy Editors (SEE) has projected significant developments in Nigeria’s energy sector during the first quarter of 2025, underpinned by President Bola Tinubu’s proposed N49.7 trillion budget.
According to SEE’s “Nigeria Energy Outlook Q1 2025,” key areas of focus include crude oil production, domestic refining, gas production, power generation, and labour relations. These efforts aim to address Nigeria’s pressing economic and energy challenges while positioning the sector for long-term growth.
“The government’s target to increase crude oil production is ambitious, but its feasibility hinges on addressing security challenges, particularly in the Niger Delta region.”
Society of Energy Editors (SEE)
To bolster production, the government plans a fresh oil licensing round in 2025, focusing on undeveloped blocks. SEE emphasized the need for strong political will to ensure the success of the licensing round and urged the government to tackle bottlenecks that have hindered similar efforts in the past.
The Dangote Refinery, expected to commence operations in 2025, represents a critical milestone in reducing Nigeria’s reliance on imported petroleum products.
The refinery’s capacity to refine 650,000 bpd of crude oil is anticipated to ease the financial burden of fuel subsidies, which cost the government N9.176 trillion between January and September 2024—up 60.87% compared to the previous year.
However, SEE noted that the steady supply of crude feedstock from the Nigerian National Petroleum Company Limited (NNPC) to the refinery will be crucial for achieving these goals. Any disruptions could diminish the refinery’s potential economic impact and prolong Nigeria’s dependence on imported fuel.
The “Decade of Gas” initiative, a cornerstone of Nigeria’s energy policy, is expected to drive growth in gas production and exports.
“Gas production and supply will also increase in response to the Federal Government initiative on gas for automobiles and the need to meet the current shortfalls being experienced by power generating stations and industries.”
Society of Energy Editors (SEE)
The Nigeria LNG Limited (NLNG) will continue to play a pivotal role in boosting gas exports, contributing to government revenue and foreign exchange reserves. However, SEE warned that infrastructure bottlenecks and regulatory uncertainties must be addressed to sustain this growth trajectory.
Setting the Tone for 2025
Efforts to expand power generation and improve the national grid’s resilience are expected to continue in 2025. The government has prioritized diversifying the energy mix by increasing the share of renewable energy sources.
However, SEE flagged ongoing weaknesses in transmission and distribution infrastructure, with the national grid recording 12 collapses in 2024.
SEE predicts similar challenges in 2025 unless mitigation measures are implemented to address systemic vulnerabilities.
The sector’s stability will also depend on investments in grid modernization and renewable energy projects, which could enhance energy access and reduce dependence on fossil fuels.
On the flip side, Nigeria’s solid minerals sector offers significant opportunities for revenue diversification and job creation. SEE urged the government to address issues such as artisanal mining and environmental degradation to unlock the sector’s potential responsibly.
“Overall, the first quarter of 2025 will be critical in setting the tone for Nigeria’s energy sector in the year ahead. “The government’s policies and initiatives will need to be carefully implemented to address the challenges facing the sector and to unlock its full potential.”
Society of Energy Editors (SEE)
Nigeria’s energy sector stands at a critical juncture as the government seeks to implement transformative changes under the 2025 budget.
While the initiatives outlined by SEE promise to drive growth and stability, their success depends on addressing long-standing challenges, from security and infrastructure gaps to regulatory bottlenecks.
With the right mix of political will, strategic investment, and stakeholder collaboration, Nigeria can achieve a more resilient, diversified, and sustainable energy sector, paving the way for broader economic growth.
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