Nigeria and Indonesia have initiated talks on potential cross-border investments to boost their oil production. The discussions involve Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Mrs. Oritsemeyiwa Eyesan and Indonesia's Vice Minister of Foreign Affairs, Arif Havas Oegroseno, among others. The goal is to explore partnerships, investments, and bilateral arrangements that can help both countries achieve their production targets. Nigeria aims to increase its oil production to 3 million barrels per day by 2030, while Indonesia targets 2.3 million barrels daily by the same year.
Nigeria currently produces approximately 1.7 million barrels of oil per day, while Indonesia produces around 600,000 barrels daily. Both countries face challenges in meeting their production targets, with Indonesia noting that it cannot achieve its goal from domestic fields alone. The talks between the two nations come as they work to increase production and attract investments to their upstream oil sectors. Indonesia's national oil company, Pertamina, has already expressed interest in Nigeria's upcoming 2026 licensing round.
According to Mrs. Eyesan, Nigeria and Indonesia share similar priorities, including energy security, resource utilization, and attracting investments. She noted that Nigeria has reset its fiscal terms to compete for capital and has reduced entry barriers, including signature bonuses, to incentivize investments. The licensing round is one of the strategies Nigeria is using to achieve its production target of 3.0 million barrels per day by 2030. Eyesan emphasized that licensing rounds in Nigeria have become a recurring exercise, institutionalized under the Petroleum Industry Act 2021.
The last commercial bid conference held in July offered 50 assets, with 37 awarded. Pertamina's Vice President in charge of upstream business development, Toriq Abdat, stated that the company is looking for producing assets or projects close to production, including opportunities available before a final investment decision. Abdat noted that Pertamina has been mandated to expand its business internationally and is already present in other countries outside Indonesia. The company is working on exploration in deepwater but has found more gas than oil, prompting it to seek opportunities abroad.
Abdat emphasized that Indonesia is interested in projects with governments, including producing assets or those near production. He noted that Pertamina is exploring opportunities outside crude oil and gas, such as building a fertilizer plant to reduce its dependence on Middle Eastern supply. The Indonesian delegation highlighted the connection between food security and oil and gas, as phosphate and other elements used in fertilizer production are linked to the energy sector.
Nigeria is also diversifying its phosphate sourcing, including a long-term transatlantic pipeline project with Morocco to serve West Africa. Additionally, Nigeria has simplified fertilizer distribution rules, which previously had around 160 layers of regulation. Both sides have agreed to keep the commercial and diplomatic tracks running in parallel as they explore joint investments and partnerships.
The discussions between Nigeria and Indonesia mark a significant step in their cooperation on oil production and investment. With both countries seeking to increase their production and attract investments, the talks are expected to yield mutually beneficial outcomes. Key aspects of the cooperation include exploring cross-border investments, partnerships, and bilateral arrangements to unlock opportunities in their upstream oil sectors.
Key points
- Nigeria and Indonesia are exploring joint investments to boost their oil production and achieve their targets of 3 million and 2.3 million barrels per day by 2030, respectively.
- The two countries share similar priorities, including energy security, resource utilization, and attracting investments to their upstream oil sectors.
- Pertamina has expressed interest in Nigeria's upcoming 2026 licensing round and is looking for producing assets or projects close to production.
