The Petroleum Technology Association of Nigeria (PETAN) has said Nigeria needs about $6bn in drilling equipment and related infrastructure to raise crude oil production to three million barrels per day, identifying inadequate financing as a major obstacle to achieving the target.
PETAN Chairman, Wole Ogunsanya, disclosed this at a media roundtable on the state of the oil and gas industry in Lagos, themed, “The State of Nigeria’s Oil and Gas Industry: Opportunities and Challenges.”
He said Nigeria had the natural resources, market opportunities and technical expertise required to increase production but lacked sufficient investment in critical equipment and infrastructure.
According to Ogunsanya, the estimated $6bn requirement for drilling equipment highlights the scale of financing needed to support higher output, particularly as indigenous oil and gas companies assume greater responsibility for assets previously operated by international oil companies.
He called for innovative funding arrangements to enable local oilfield service companies to acquire drilling rigs and other equipment needed to support production growth.
Ogunsanya said conventional lending arrangements had made it difficult for many indigenous service companies to finance expensive drilling equipment, despite their technical capacity to execute complex oilfield operations.
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He described the financing gap as both a challenge and an opportunity for Nigerian companies, arguing that improved access to capital would enable them to expand their operations and contribute more significantly to the country’s production targets.
The PETAN chairman cited a $4.1bn and N435bn vendor-financing arrangement involving Renaissance Africa Energy and 13 commercial and multilateral financial institutions as a model that could be adopted more widely across the industry.
Under the arrangement, Renaissance provides guarantees to participating banks for eligible contractors working for the company, enabling them to seek financing against contract earnings.
Ogunsanya said the structure could help oilfield service companies acquire equipment while giving lenders greater assurance that loans would be repaid from revenue generated through contracts.
He urged other oil producers operating in Nigeria to consider similar financing arrangements to improve access to equipment and accelerate investment in production-support infrastructure.
He also called for greater use of Nigerian Content Development and Monitoring Board (NCDMB) funding mechanisms to support equipment purchases by oilfield service companies, particularly where such investments could directly increase crude oil production.
Ogunsanya argued that Nigeria had failed to sustain production growth during periods of favourable oil prices, partly because drilling and investment slowed when market conditions weakened.
He said the industry needed a more consistent investment strategy that would reduce its exposure to short-term oil price fluctuations and ensure continued development of existing fields.
According to him, domestic refineries and sustained demand for petroleum products provide additional reasons for maintaining crude production even when international prices decline.
He also stressed the importance of increased exploration to replenish reserves, warning that sustained drilling and fresh discoveries would be necessary to support Nigeria’s long-term production ambitions.
Ogunsanya said indigenous producers’ ability to finance and deploy drilling equipment would become increasingly important as they assume control of more oil and gas assets.
He pointed to the growing role of Nigerian companies in the sector and their ability to compete internationally as evidence that local technical expertise exists to support the industry’s expansion.
However, he maintained that this capacity must be matched by adequate investment in equipment, infrastructure and other production-critical resources.
Beyond financing, the PETAN chairman warned that the industry could face a growing skills gap as oil and gas assets change ownership.
He said the transfer of assets from international oil companies to indigenous operators could weaken some of the established training pathways that historically helped develop engineers and other technical professionals.
Ogunsanya urged indigenous exploration and production companies to invest in training young engineers and technicians, particularly as experienced workers approach retirement.
He said developing a new generation of skilled professionals was essential to sustaining operations, transferring technical knowledge and ensuring that local companies could manage increasingly complex oilfield activities.
PETAN, he disclosed, was pursuing training initiatives and planned to establish a training centre in Rivers State to expand practical instruction and prepare young Nigerians for employment in the oil and gas industry.
He said sustained investment in workforce development would be necessary to complement spending on equipment and infrastructure.
Ogunsanya maintained that Nigeria’s ambition to increase crude oil production to three million barrels per day would require coordinated investment across the oil and gas value chain.
He said access to drilling equipment, alternative financing, sustained exploration and technical training would be critical to increasing output, improving industry revenue and creating more opportunities for indigenous companies.
The PETAN chairman urged stakeholders to adopt long-term investment strategies that would enable Nigerian service firms to expand their capacity and support higher production, regardless of short-term fluctuations in crude oil prices.
