5 Things Nigeria Must Do to Secure Its Energy Future Under the Trump Doctrine

It was a humid afternoon in Lagos when an energy executive shared a provocative thought at an event; “Africa could be the world’s energy saviour, but only if it stops chasing others’ climate agendas and embraces its own potential.” This sentiment both shocked me and resonated deeply with me, as my professional journey has reflected these shifting dynamics. I began my career deeply entrenched in the world of hydrocarbons; researching market fundamentals, consulting for oil multinationals on political and economic risk in Africa, and structuring and raising financing for oil and gas projects and companies. Like the energy industry itself, I soon pivoted towards infrastructure, cleantech and renewable energy, embracing the inevitability of a global energy transition, and equipping myself with more rounded skills sets. Nevertheless, as an energy sector pragmatist, I realise that the Trump administration’s energy policies will reignite debate on the centrality of oil and gas to Africa’s future.

The energy transition is anything but linear. For Nigeria, the stakes couldn’t be higher.

US Energy Dominance 2.0

The Trump administration’s energy strategy is unapologetically fossil-fuel-centric. It promotes domestic oil and gas production, withdraws from the Paris Climate Agreement, and expands drilling in protected areas. These policies emphasise "energy dominance" over climate commitments, signalling opportunities for Africa’s traditional energy sectors. However, this focus could side-line renewable energy ambitions in Africa, as US support for clean energy wanes. According to 2024 data, the US recorded a 15% increase in domestic drilling permits issued compared to 2023, showcasing its aggressive fossil fuel agenda, and that was actually under the more Paris Agreement-friendly Biden administration.

This surge highlights the US’s prioritisation of traditional energy sources, which could align with Africa’s oil and gas-rich economies. Nigeria, with its offshore assets, stands to gain if US energy firms seek international expansion. Recent data from 2024 shows increased global demand for African crude, partly due to production challenges in regions like Venezuela and Russia. In Q4 2024, Nigeria exported an average of 1.5 million barrels per day (bpd), a recovery from years of declining output.?

Energy diplomacy in the Trump era, it seems, will be a chessboard and Nigeria must decide whether to play pawn or king.

Will climate action take a backseat?

Trump’s withdrawal from the Paris Climate Agreement may leave African climate leaders disillusioned. Indeed, the chair of the African Group of Negotiators on Climate Change, Ali Mohammed, has already criticised US withdrawal from the Paris Climate Agreement.?

This decision jeopardises climate finance, including the $100 billion annual commitment to developing nations. Nigeria, aiming to scale renewable energy projects, faces a potential funding vacuum too. Data from the African Development Bank (AfDB) indicates that Nigeria requires $15 billion annually to close its energy access gap, a goal that may face setbacks without US-anchored climate financing. Meanwhile, research has shown that methane emissions from oil operations in Africa rose by 8% in 2024, partly driven by relaxed global regulatory pressures. This creates tension between the continent’s ambitions for a greener future and the immediate economic priorities tied to fossil fuels.

Moreover, as global energy markets adapt to geopolitical shifts like the Russia-Ukraine conflict, new trade dynamics emerge. Europe’s pivot from Russian gas has spurred a 50% increase in LNG imports from other regions since 2024, intensifying competition. Nigeria must navigate this environment, leveraging its strategic location and established LNG infrastructure while contending with well-funded producers like Qatar and the US. The competition also underscores the need for efficiency gains, as highlighted by industry analysts, where streamlined project execution is becoming a critical differentiator for global investment.

'Trumping' OPEC and re-ordering the world

The Trump administration’s contentious relationship with OPEC, marked by demands for increased production to lower prices, complicates Nigeria’s position. As a leading OPEC member, Nigeria must balance domestic production goals with OPEC quotas. In December 2024, OPEC+ maintained a production cut of 2 million bpd, directly affecting Nigeria’s export earnings, which rely on oil for 90% of foreign exchange.

Simultaneously, the Russia-Ukraine conflict has reordered global energy dynamics, particularly in Europe. Russia’s drastic reduction of gas exports to Europe, formerly its largest buyer, has created a supply vacuum. Europe’s urgent need to replace Russian energy has brought African producers, including Nigeria, into the spotlight. European LNG imports surged 50% in 2024 compared to pre-war levels, with new long-term contracts signed with suppliers from Africa and the Middle East. Nigeria’s strategic location and existing LNG infrastructure make it a viable supplier, but it faces competition from Qatar, the US, and emerging East African producers like Mozambique.

Moreover, the shift in energy trade flows is pushing OPEC into a more delicate role. The cartel must navigate a world where energy security concerns are driving nations to diversify supply sources rapidly. Energy diplomacy in the Trump era, it seems, will be a chessboard and Nigeria must decide whether to play pawn or king.

Security and Investment Risks

Nigeria must consolidate recent gains in tackling infrastructure vandalism in its oil producing regions and sustain its regulatory progress. Under Trump, US investors may focus on low-risk, high-reward opportunities, potentially bypassing volatile regions. The Petroleum Industry Act (PIA), implemented in 2023, aimed to attract foreign capital by offering competitive tax regimes and clearer regulatory frameworks. Early data shows that Nigeria attracted $3.6 billion in foreign direct investment (FDI) into its energy sector in 2024, a 12% increase from 2023, though still below its pre-COVID levels.

Upstream exploration and production costs in Nigeria and other African markets remain a critical factor. According to industry insights from Wood Mackenzie and Rystad Energy, onshore projects in Nigeria average $20-$30 per barrel in production costs, while offshore fields, particularly deepwater, range from $30-$40 per barrel, making them relatively competitive globally. However, regions like Angola and Mozambique often face higher logistical costs due to infrastructure deficits, adding complexity for potential investors. Despite these challenges, Nigeria’s established oil infrastructure and growing LNG capacity position it as a more attractive destination compared to emerging producers in East Africa. These figures highlight a cautious optimism that hinges on Nigeria’s ability to stabilise its investment climate and maintain consistent energy policies.

Additionally, insights from recent global upstream trends indicate a shift towards resource capture through mergers and acquisitions (M&A) and the importance of efficiency-driven operations. For Nigeria, this means capitalising on its LNG and deepwater oil projects as strategic growth opportunities. The Trump administration’s emphasis on oil and gas dovetails with these trends, giving Nigeria a platform to re-emerge as a key player in the Atlantic Margin. However, it must do so by ensuring its projects are both timely and competitive in a market increasingly driven by value over volume. Simply put, it’s not just about having oil. It’s about having oil that counts.

Milestones under the Tinubu Administration

The Tinubu administration has taken significant steps to reposition Nigeria’s energy sector, which could bolster its standing during this Trump era. As noted by Olu Arowolo Verheijen Special Adviser to the President on Energy, in a recent linkedin post, Nigeria achieved key milestones in 2024:

• Regained the top spot in upstream oil and gas investment in Africa, with $5.5 billion in Final Investment Decisions (FIDs) for key projects.
• Approved five strategic oil and gas asset acquisitions to strengthen production capabilities.
• Launched the Presidential Metering Initiative (PMI) with $400 million allocated to improve on-grid power reliability.
• Secured $700 million in clean energy investment prospects across clean mobility and cooking solutions.

These initiatives position Nigeria as a dynamic player, capable of leveraging Trump-era fossil fuel opportunities while addressing domestic energy challenges. The $6.7 billion total energy investments recorded in 2024 underscore Nigeria’s ability to attract both traditional and renewable energy funding.

However, without access to the $100 billion in annual climate funding initially envisioned under the Paris Agreement, can Nigeria realistically scale its renewable energy sector? In 2024, Nigeria made incremental progress in renewable energy, with solar mini-grids accounting for 2.3% of the energy mix, up from 1.7% in 2023. Yet this progress pales in comparison to the scale required to close its energy gap. The $700 million secured for clean mobility and clean cooking solutions is promising but needs to be multiplied several times over.

Global exploration and renewable investment trends also underscore the necessity for Nigeria to align its climate commitments with its economic goals. According to recent projections, transitional fuels like LNG will play a pivotal role in bridging Africa’s renewable ambitions with current energy needs. However, capturing these opportunities will require a robust financing framework and the ability to scale projects rapidly, ensuring Nigeria remains competitive amidst a growing global focus on efficiency and value-driven investments. These efforts must also address the widening gap in climate funding, particularly as Africa continues to advocate for its fair share of global investment in clean energy.

So, to navigate this shifting landscape, here are 5 things Nigeria must quickly do:

• Leverage US Interest in Oil and Gas: Position its offshore assets as attractive opportunities for firms seeking resource diversification. In 2024, offshore accounted for 70% of Nigeria’s oil output, with deepwater investments showing promise.
• Expand LNG Capacity: Fast-track the Nigeria LNG Train 7 project to capitalise on rising global LNG demand. Global LNG trade grew by 6.2% in 2024, driven by Europe’s pivot from Russian gas.
• Strengthen Renewable Alliances: Pursue partnerships with Europe and Asia to mitigate reduced US climate support. The EU committed $1.2 billion to renewable energy projects in Africa in 2024, a potential avenue for Nigeria’s solar ambitions.
• Stabilise the Investment Climate: Enhance regulatory transparency and security to attract global capital. The World Bank ranked Nigeria 131st in ease of doing business in 2024, underscoring the need for further reforms.
• Create a Green Financing Framework: Develop domestic mechanisms to attract private investment into renewables, possibly through green bonds or carbon credits, and also leverage the growth of domestic capital markets.

It’s a Fragile Alliance

The Trump administration’s "Drill, Baby, Drill" philosophy presents a complex mix of opportunities and challenges for Africa. Nigeria, as a leading oil producer, stands to gain from renewed fossil fuel interest but must contend with potentially reduced climate financing and evolving geopolitical dynamics. Balancing hydrocarbon reliance with diversification will be Nigeria’s critical test.

As an expert with experience in both traditional oil and renewable energy sectors, I recognise the delicate balance required to navigate this landscape. Nigeria must assert its priorities while aligning with global trends to secure a sustainable energy future. The question thus remains; can Nigeria adapt fast enough to seize the moment without compromising its long-term vision??

This is not just a challenge for Nigeria but for Africa as a whole. The Trump-era policies highlight the urgent need for African leaders to carve out an energy agenda that serves both current realities and future aspirations, even as global geopolitics reshapes the energy map.

I'd love to read your thoughts.