The Nigerian National Petroleum Company Limited has been urged to balance its commercial interests with Nigeria’s long-term economic priorities as the global shift towards cleaner energy threatens the future of fossil fuel investments.
Energy experts and researchers warned that decisions on whether to expand oil and gas investments, diversify into renewables or gradually withdraw from fossil fuels could have significant implications on government revenue, employment, energy security and the wider economy.
They made the submissions at a session titled ‘The Role of NNPC in Nigeria’s Energy Transition’ at the ongoing 31st United Nations Climate Change Conference on Friday in Antalya, Türkiye.
The session was organised by the Centre for Petroleum, Energy Economics and Law, University of Ibadan; the Centre for Energy, Finance and Development; and the Inclusive and Sustainable Development Research Centre. It was moderated by the Nigeria Country Manager of the Natural Resource Governance Institute, Tengi George-Ikoli.
George-Ikoli, in her comments, said national oil companies would determine how successfully the world managed the gradual decline in fossil fuel production, particularly as International Oil Companies reconsidered their investments.
She noted that national oil companies could fill the investment gap left by international operators, making their decisions critical to the energy transition.
“National oil companies will play a major role in determining the success of the push for a managed decline in fossil fuel production globally. As international oil companies scale back, NOCs may step in to fill the gap, making their involvement in the transition essential. This is particularly true for NNPC in Nigeria,” she said.
She said discussions involving Nigeria, Senegal and Uganda at COP31 had demonstrated the importance of peer learning, particularly in helping countries understand their different circumstances and develop responses to shared energy challenges.
According to her, Nigeria must move beyond discussions and ensure that NNPCL works with the Federal Government to assess long-term investment risks, prepare for declining fossil fuel demand and develop credible transition strategies.
In a presentation, the Executive Director, Centre for Energy, Finance and Development, Nicolas Lippolis, said the Petroleum Industry Act 2021 had transformed NNPC into a commercially oriented company, creating the need to reconcile profitability with its public responsibilities.
He said the company must generate government revenue, guarantee energy security and support domestic production while ensuring that its investments remain viable as global energy markets change.
Lippolis noted that about 35 per cent of NNPC’s revenue came from oil and gas exports, while petroleum products accounted for approximately 85 per cent of Nigeria’s exports, exposing the country to changes in global demand.
His research identified gas-fired power, domestic midstream infrastructure and international pipelines as areas requiring closer scrutiny because of their potential exposure to energy transition risks.
He explained that investments involving private and international partners could benefit from independent market validation, helping NNPC assess whether projects had commercially sustainable demand.
The researcher also highlighted the need to examine how the company could combine its existing capabilities with investments in renewable energy and low-carbon industries.
Similarly, the Executive Director, Inclusive and Sustainable Development Research Centre, Oluwasola Omoju, warned that NNPCL’s transition choices would have consequences beyond the petroleum industry, affecting the wider Nigerian economy.
Presenting an economic modelling assessment, he examined three possible strategies: NNPC divesting from fossil fuel investments, shifting investments towards natural gas, and capturing and commercialising gas currently being flared.
He said the findings showed that the different transition pathways could produce negative macroeconomic implications, while government revenue would decline as the economy adjusted to reduced dependence on oil and gas.
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Omoju, however, identified opportunities in employment, particularly in refining and industrial activities, which he said could absorb workers displaced by changes in the energy sector.
He stressed that the economic consequences would depend on the strategy adopted by NNPC and the extent to which the Federal Government provided supporting policies and financing frameworks.
During a panel discussion, the Manager of Strategy and Sustainability at NNPC Upstream Investment Management Services, A.O. Adaji, said the national oil company was pursuing an energy mix rather than adopting a single approach to the transition.
He described natural gas as Nigeria’s transition fuel, saying NNPC was working to expand its use for industrialisation, electricity generation and efforts to address energy poverty.
“Right from the presidency, the board and the executives, we know that gas is our transition fuel, and we are doing everything possible to ensure that we use gas as an engine of growth for industrialisation and to close the gap of energy poverty that we have in the country,” Adaji said.
He said the company was using blended investments and strategic partnerships to commercialise gas and deliver it to power plants and industrial facilities.
Adaji also disclosed that NNPC was supporting efforts to eliminate gas flaring by 2030 through the Nigerian Gas Flare Commercialisation Programme, adding that flared gas accounted for about five per cent of Nigeria’s total gas production in 2025.
He invited investors and businesses to participate in the commercialisation programme, noting that NNPC had established a new energy subsidiary to drive renewable and low-carbon energy investments.
The discussions also drew lessons from Brazil, Senegal and Uganda.
The Technical Director of Brazil’s Instituto de Pesquisa em Petróleo, Gás e Biocombustíveis, Mahatma Ramos, said national oil companies should become instruments for sustainable development rather than focus exclusively on shareholder returns.
Using Petrobras as an example, he argued that transition investments required a clear public mandate, long-term financing and accountability to workers and communities.
He said Brazil’s experience showed that national oil companies could contribute to addressing climate change and structural inequalities if governments strengthened their capacity to coordinate investments and protect decent employment.
Similarly, the Director of Environmental and Social Performance and Safety at Senegal’s Réseau Gazier du Sénégal, Awa Diouf, explained how the country’s gas pipeline company combined public ownership with private-sector flexibility.
She said its structure enabled it to coordinate upstream producers, power plants and industrial consumers while benefiting from government backing when seeking financing.
The Head of Corporate Strategy and Innovation, Uganda National Oil Company, Michael Kyanzi, said his country had elevated energy security to the level of national security.
He stressed that African countries needed to collaborate, invest in domestic value addition and develop regional infrastructure instead of relying solely on importing refined petroleum products.
Citing Uganda’s engagement with Kenya on petroleum pipeline infrastructure and the East African Crude Oil Pipeline involving Uganda and Tanzania, he said regional cooperation could reduce financing costs and improve energy security.
The panellists agreed that collaboration among national oil companies, governments and private investors would be critical to ensuring that the energy transition did not undermine economic development.
