Nigeria Needs decentralized Terminals to Boost ⁢Oil Production

⁣ ⁢Updated June 01, 2025

To reach a ⁣crude oil production target of three million barrels per day (bpd), Nigeria must urgently invest $5.5 billion in decentralized ⁢oil terminals, energy sector stakeholders say. This call coincides‌ with Green Energy⁣ International Limited⁣ (GEIL) launching a⁣ 350,000-bpd Otakikpo Onshore Terminal in Port⁣ Harcourt,⁤ Rivers State.

Prof. Anthony adegbulugbe, chairman of Green Energy,⁢ emphasized the need to remove ​infrastructure growth bottlenecks during a tour of the terminal. He stated that achieving President Bola ⁣Tinubu’s oil production goals hinges ​on building more decentralized terminals across the Niger Delta to unlock marginal ⁣oil fields and boost‍ Nigeria oil ​production.

Nigeria’s oil reserves, estimated at over 37 billion barrels, are underutilized due to ‌infrastructure limitations, Adegbulugbe noted. “To move⁤ from ⁣two to⁣ three million ⁢barrels per day, we need capacity for an⁣ extra 1.2 million barrels. Green⁣ Energy alone cannot close that gap. We need at least four more terminals like this,” he ​said.

GEIL has identified five key locations for similar terminals, ​costing an estimated $5.5 billion. ⁢Thes‌ decentralized hubs would ​enable smaller oil ‌fields, currently​ idle due ​to a lack⁢ of export infrastructure, to become viable.

The Otakikpo ⁤Terminal, currently operating at only 4% capacity, expects ‍its first export vessel between May 28 and June 2. Adegbulugbe highlighted⁢ the terminal’s adaptability, noting it can handle⁤ crude oil via truck, barge, river, pipeline, and Atlantic transport, making ‌it ⁤unmatched in Nigeria’s ⁢oil logistics.

Dr. kayode‍ adegbulugbe stressed the urgency of decentralizing ‌oil infrastructure,‌ especially given rising pipeline vandalism and theft. He proposed a network of coastal hubs supporting oil, gas, and water processing in three phases, allowing marginal fields up to 50 kilometers away to connect ‍to the export system.

Shared infrastructure‍ could cut production costs by up to 40%, he​ argued. “Think of it like carpooling,” he ⁢said. ‌”Central services, staff, logistics — when you share those across multiple producers, everyone wins.”

Scaling⁢ up operations requires ‍the ‌Nigerian National petroleum⁣ Company Limited (NNPC Ltd)‍ as a⁢ key partner, Adegbulugbe ​said, because the national oil ⁢company ⁣controls most of the land and reserves. “We ‍have shown ⁤global ​banks we can‌ deliver. But scaling up requires trust, capital, and partnership. ​NNPC is key,” he stated.

The new⁤ terminal is expected to‌ attract financing for previously unviable projects. Marginal oil fields producing between 15,000 and 20,000⁤ bpd ⁢often struggle⁢ to secure capital​ due to ⁣a⁣ lack of⁢ evacuation infrastructure. Decentralized⁣ hubs can make these fields profitable,drawing investors ​to long-term gas and oil projects.

Emeka Nkemakolam, Head of​ energy and Power at Fidelity Bank, a key financier, believes the project could change how‌ marginal field‌ operators view scale and access. “Our ‍support‍ is not⁤ just transactional, ‌it’s foundational,” he said. “We’ve backed indigenous companies from the ‍start and will keep doing ‍so as they⁢ expand infrastructure.”

Nkemakolam urged oil ‍producers ‍with stranded assets to re-evaluate ​their plans. ⁣”If your current⁤ bank doesn’t understand what this ‍facility means, come to⁢ us,” he​ said, adding that manny fields became uneconomical solely due to⁢ a lack of evacuation⁢ options.

he also cautioned that ​marginal field licenses expire if unused within⁤ two ⁢years. “The government needs ​the royalties, and we ⁢need the production. This terminal ⁤changes the game,” Nkemakolam added.

Stakeholders aim ⁣to‌ increase Nigeria’s​ oil production from two to three million bpd, and eventually to five⁤ million bpd within ‍five years. ‌This increase could substantially boost revenue, create jobs, and establish Nigeria as Africa’s leading oil ‍powerhouse, enhancing Nigeria oil production.

What’s next

The focus will be on securing further investment and partnerships⁣ to ⁢replicate the Otakikpo Terminal⁤ model across other ​key​ locations ⁢in the Niger ​Delta, with the ultimate goal⁣ of achieving a considerable ​increase in Nigeria’s oil production capacity.