US Oil Firm Vaalco Eyes Return To Nigeria As FG Pushes For Energy Sector Revival
The Nigerian government has reaffirmed its determination to restore investor confidence in its oil and gas industry, as American energy company Vaalco Energy signaled its intention to return to Nigeria after years of absence.
During a high-level meeting in Abuja with the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, the U.S.-based independent oil and gas producer expressed strong interest in re-entering Nigeria’s upstream sector. According to the minister’s spokesperson, Nneamaka Okafor, discussions centered on creating a competitive investment climate and supporting the company’s acquisition of assets in the country.
Government’s Pitch: Global Incentives for a Competitive Market
Lokpobiri used the occasion to reassure international oil firms that the administration of President Bola Ahmed Tinubu is committed to rebuilding trust with foreign investors.
“The government of President Bola Tinubu is particularly interested in creating a better environment for companies that were once here but left for various reasons to return,” Lokpobiri said. “We are prepared to offer incentives comparable to the best available globally.”
This aligns with Tinubu’s broader economic reforms, which include unifying the foreign exchange market, removing costly fuel subsidies, and strengthening Nigeria’s fiscal framework to attract fresh capital inflows.
Why Vaalco Left, and Why It Wants Back In
Vaalco Energy, listed on the New York Stock Exchange, previously operated in Nigeria before exiting amid regulatory uncertainties and stiff competition from larger international oil companies. The company has since maintained a strong presence in Gabon and Equatorial Guinea, where it operates offshore oil blocks and continues to expand production.
Its renewed interest in Nigeria is tied to its planned acquisition of Svenska Petroleum Exploration’s Production Sharing Contract (PSC) interest in Oil Mining Lease (OML) 145, a highly prospective offshore asset with significant reserves potential.
During the Abuja meeting, Vaalco’s Managing Director, Pieter Van der Groen, made it clear that Nigeria remains a strategic investment destination for the company.
“We are here to seek regulatory guidance for acquiring Svenska’s interest in OML 145, but more importantly, to return to Nigeria and invest in a stronger way,” Van der Groen said. “As a New York Stock Exchange-listed company, we have access to funding to develop the assets we acquire. We are not here to sit on them; we are here to produce.”
A Welcome-Back Signal for Other Investors
For Nigeria, Vaalco’s renewed interest represents more than just one company’s return. It is a symbolic signal to the global investment community that Africa’s largest oil producer is once again open for business.
Lokpobiri underscored this point, noting that companies which return after past experiences often become the strongest ambassadors of Nigeria’s business climate.
“It is gratifying for us as a nation when those who have worked here become ambassadors, speaking of how friendly and conducive Nigeria is for business. We are glad to welcome you back,” the minister stated.
Policy Reforms and the Petroleum Industry Act
A major part of Nigeria’s investment pitch lies in the Petroleum Industry Act (PIA), which was signed into law in 2021 after decades of delay. The PIA provides fiscal stability, legal clarity, and a more transparent governance framework — all issues that previously discouraged international oil companies.
Lokpobiri assured Vaalco that the current policy framework guarantees long-term stability for investors.
“Your renewed presence will help us ramp up production and achieve our national energy objectives. Together, we can build a future of shared growth and prosperity,” he said.
Nigeria’s Urgent Need to Boost Production
Nigeria’s oil industry has struggled in recent years due to underinvestment, oil theft, and ageing infrastructure. Production levels have often fallen short of the country’s OPEC quota, weakening foreign reserves and reducing government revenues.
According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria produced an average of 1.4 million barrels per day in mid-2023, well below its 1.8 million bpd OPEC allocation. The Tinubu administration has pledged to restore output to at least 2 million bpd in the short term.
Analysts say fresh investment from companies like Vaalco could help Nigeria:
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Modernize offshore production assets.
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Expand gas development projects to support domestic power generation and export ambitions.
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Strengthen foreign exchange earnings critical for stabilizing the naira.
US-Nigeria Energy Cooperation
Vaalco’s planned return also highlights growing U.S. interest in Africa’s energy security. American firms, once highly active in Nigeria’s oilfields, had reduced operations over the past decade, ceding ground to European and Asian competitors.
A U.S.-based analyst noted that Vaalco’s renewed interest could encourage other mid-tier American independents to reconsider Nigeria. “If Nigeria can demonstrate policy stability and attractive incentives, it could trigger a new wave of U.S. investment in the oil and gas sector,” the expert said.
Local Content and Community Benefits
As part of Nigeria’s petroleum framework, any re-entry by Vaalco will be expected to comply with Nigerian Content laws, which mandate local employment, procurement, and training.
Industry watchers believe that Vaalco’s experience in Africa positions it to work effectively with Nigerian regulators and communities. Its ability to access funding through Wall Street also makes it well-placed to deliver on its production commitments.
Outlook: A Test Case for Tinubu’s Energy Reforms
Ultimately, the Vaalco deal is more than a corporate transaction. It is a litmus test for the Tinubu administration’s pledge to rebuild trust in Nigeria’s oil and gas sector. Success could unlock billions of dollars in fresh investment, while failure could discourage other potential entrants.
For now, the mood is cautiously optimistic. Vaalco appears committed, the government is making overtures, and Nigeria’s petroleum sector — long in need of revival — may finally be regaining momentum.