The first quarter of 2025 is expected to see significant developments for the Nigerian energy sector, according to the Society of Energy Editors (SEE).
This, according to the Society, would be driven by President Bola Tinubu’s proposed N49.7 trillion naira budget for the year.
The budget is based on a decrease in inflation from 34.6% to 15% in 2025, which is expected to result in a rise in base crude oil production to 2.06 million barrels per day.
The SEE, in its “Nigeria Energy Outlook Q1 2025”, said key areas to watch in the energy sector in the first quarter of the year include oil exploration and production, domestic crude refining, gas production and liquefied natural gas, LNG, export, power generation and transmission as well as labour relations.
“The government’s target to increase crude oil production is ambitious, but its feasibility hinges on addressing security challenges, particularly in the Niger Delta region.
In response to the country’s struggle to raise crude reserves and production, it stated in the Outlook that “Nigeria plans to hold a new oil licensing round in 2025 with a focus on handing out blocks that remain undeveloped.”
The Federal Government would need to demonstrate the necessary political will and exert considerable pressure to get this new oil licensing round to go ahead as planned throughout the year.
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The Society noted that the Dangote Refinery’s beginning of petroleum refining is anticipated to lower fuel imports and lessen the cost of petroleum subsidies, but that the company’s continued supply of crude oil feedstock will be crucial in determining the refinery’s impact on the economy in 2025.
Nigeria spent N9.176 trillion on the importation of the Premium Motor Spirit, PMS, also known as petrol, in nine months, from January to September 2024, rising by 60.87 per cent, compared with N5.704 trillion worth of the commodity imported in the same period in 2023.
Focusing on gas production and LNG exports, the SEE projected that Nigeria’s gas sector will grow during the first quarter, driven by the government’s” Decade of Gas “initiative and the country’s ambitions to increase its gas reserves to 210 trillion cubic feet, Tcf, in 2025 and 220 Tcf by 2030.
According to the projections, “gas production and supply will also increase in response to the Federal Government’s initiative on gas for automobiles and the need to address the current shortages experienced by power generating stations and industries.”
The Society also claims that the first quarter’s exports of gas through Nigeria LNG Limited will remain steady.
The Society of Energy Editors stated that efforts to increase the number of renewable energy sources in the energy mix will continue with an emphasis on increasing the share of renewable energy sources.
The national grid, which had 12 collapse incidents recorded in 2024, continued to be very weak in terms of power transmission and distribution infrastructure. adding that due to inadequate mitigation strategies intended to address inherent weaknesses, 2025 will experience a repeat.
In terms of labor relations, the Society claimed that to maintain stability and prevent disruptions, the government would need to address labor concerns in both the electricity and downstream sectors.
Listing challenges and opportunities, the Society stated, in the Nigeria Energy Outlook Q1 2025, that the government’s expectations for reducing inflation and improving the exchange rate may be challenging to achieve, given the current market realities.
It claimed that the Niger Delta Development Commission’s activities would be crucial in addressing the region’s root causes of insecurity and instability.
The government will need to address the difficulties of artisanal mining and ensure that the sector is developed in a sustainable and responsible manner, even though the solid minerals sector offers significant opportunities for revenue growth and job creation.
