February 25, (THEWILL) – The United States leveraged technological advancements over three decades to enhance domestic oil and gas production and supply security, leading to the shale gas revolution. The U.S. Council of Economic Advisers indicated that innovation in energy technology resulted in an eight-fold increase in natural gas extraction productivity and a nineteen-fold increase in oil between 2007 and 2019. This progress was supported by research and development initiatives from both private and government sectors, along with regulatory changes, land use adjustments, and fiscal incentives for emerging technologies. These efforts were motivated by anticipated macroeconomic benefits, including job creation and supply chain requirements. The eventual outcomes included changes in supply and price dynamics and infrastructural developments, such as retrofitting former import terminals into export terminals.
A unique aspect of Nigeria’s energy policy is its reliance on the presidency rather than political party affiliation. An empirical review of Nigeria’s petroleum sector liberalisation policies reveals similar objectives despite a combination of quasi-socialist and capitalist approaches implemented through various strategies across different political administrations. For example, President Obasanjo introduced a privatisation policy to optimise stranded assets through private-sector investment. On the other hand, President Yar’ Adua opposed this philosophy, especially regarding the energy midstream sector (i.e., refineries), despite both presidents being from the same political party.
Consequently, the liberalisation opposition resulted in financial decisions by investors to develop independent refineries—modular and integrated—supported by favourable policies and licences during the Jonathan presidency. Most recently, under President Buhari, there was also financial and capital support for refinery development, even though his administration was perceived as quasi-socialist. Additionally, the role of various state and local governments in facilitating land-use policy changes is essential to note. As a result of these events and policies from multiple Nigerian presidencies, the Dangote Refinery and other modular refineries are now operational, leading to local production of refined products and, consequently, reduced imports. This shift has provided fiscal and monetary benefits and changed trade flow dynamics. In 2024, Nigeria experienced public energy policy deliberations and negotiations between Dangote Refinery and various downstream players, including oil traders, retailers, and regulators. However, firm, independent, deliberate energy regulation and policy are needed to enhance and optimise Nigeria’s refinery technology uptake and spillover effects.
Interestingly, state-owned refineries, which had previously been moribund and suffering from a lack of technological support, are almost operational due to ideological backing and supply competition. A refinery industrial revolution in 2025 is not ideal. Nigeria is currently at least three decades behind in energy technology. Some believe that global political powers have allowed Nigeria’s refinery revolution to progress due to global decarbonisation policies and support for renewable energy options. Furthermore, the international relevance of the energy industry has changed; ExxonMobil is the only energy technology firm in the S&P 20, whereas the top nine firms are now information technology-related—this was not the case 30 years ago when ExxonMobil ranked first on the index.
Energy supply and security are prerequisites for information technological advancement. A recent study indicates that 1.5 million artificial intelligence servers running at full capacity would consume at least 85.4 terawatt-hours of electricity annually, highlighting the correlation between energy security/supply and the growing demand for data and AI. Will Nigeria face a similar three-decade lag in AI development and utilisation as it has in refining technology? Deliberate policies, collaboration, and strategic initiatives must address this continental challenge. However, as of 2025, the African continent is still working to accelerate energy access, exemplified by the recent landmark Mission 300 Africa Energy Summit in Tanzania. The best strategy will be a concurrent approach to prevent further development lag. What specific policies and collaborations are necessary for Nigeria to catch up in AI development compared to its refining technology advancements? How can Nigeria’s various political administrations ensure continuity and stability in technological policies regardless of presidential changes? How can international partnerships enhance Nigeria’s energy security and technological capabilities moving forward?
*** Written By Ukadike Nwaobi
