Oil firms fail to invest despite strong profits – NESG

Nigeria's oil industry experienced a slowdown in economic growth during the first half of 2026, despite maintaining stable crude oil production, according to a report by the Nigerian Economic Summit Group titled "From Crude Extraction to Value-Added Petroleum." The report revealed that real growth in the petroleum sector slowed to 2.6 percent, down from 10.7 percent in the same period of 2025.

The decline, however, was not solely due to reduced crude production, but also attributed to a shifting composition of Nigeria's petroleum exports. The country's petroleum exports have gradually shifted from crude oil to non-crude petroleum products, a trend coinciding with the Dangote Petroleum Refinery's full operation. This shift signals a move away from Nigeria's historical dependence on crude oil exports and a transition towards generating more economic value from its petroleum resources.

Despite this transition, the report emphasizes that the country must invest in refining, gas processing, and other supporting infrastructure to retain more value from its petroleum resources. One of the major constraints hindering business operations in the oil sector is the inadequate electricity supply, which, along with economic uncertainty, has led to businesses reporting strong profitability, healthy cash flows, and access to credit, yet failing to invest.