Nigeria’s upstream oil industry needs a fundamental shift in how ageing infrastructure is managed if operators are to stem rising production losses and maximise output from mature oil fields, according to an industry expert.
Dr. Robert Oloyede, Deputy Group Managing Director of Divcon Engineering Limited, unveiled a “Six-Dimensional Physical Asset Management Practices Enhancement Framework” during the technical seminar at the 25th anniversary of NOG Energy Week, arguing that indigenous producers require a more comprehensive approach to safeguarding inherited oil assets.
Oloyede warned that many Nigerian-owned exploration and production companies have taken over oil and gas facilities that are between 40 and 60 years old following the divestment of onshore and shallow-water assets by international oil companies. While these acquisitions have expanded local participation in the sector, they have also transferred significant maintenance and operational risks to indigenous firms.
According to him, ageing infrastructure, combined with widespread crude oil theft, pipeline vandalism and inadequate maintenance, has resulted in production losses ranging from 40% to as high as 97% in some operating areas. Such losses continue to undermine operational efficiency, reduce government revenue and discourage investment in Nigeria’s oil and gas industry.
Oloyede said technological innovation alone cannot resolve the industry’s challenges. Instead, operators must adopt an integrated asset management strategy that combines engineering excellence with human capacity development, institutional knowledge retention and stronger physical security systems.
Central to the proposed framework is what he described as the “human element.” He argued that experienced technical personnel remain critical to ensuring the safe operation and maintenance of ageing facilities, particularly as the industry undergoes ownership transitions. Companies should therefore invest in continuous workforce training, structured knowledge transfer programmes and succession planning to preserve technical expertise.
He also stressed the importance of preventive maintenance, effective risk assessment and improved security architecture to protect critical infrastructure from theft and sabotage. These measures, he said, would help extend the productive life of mature assets while reducing unplanned shutdowns and costly repairs.
Industry analysts say the recommendations come at a critical period for Nigeria’s petroleum sector. Indigenous operators now control an increasing share of the country’s onshore production following recent asset sales by multinational energy companies. Successfully managing these ageing facilities will be essential to sustaining crude oil output, improving operational reliability and attracting fresh investment into the sector.
The framework also aligns with broader efforts to strengthen Nigeria’s energy security and maximise value from existing oil infrastructure. As operators seek to increase production under the Petroleum Industry Act, effective physical asset management is expected to become an increasingly important driver of operational performance, cost efficiency and long-term profitability.
