Nigeria remains the largest producer of crude oil in Africa, with production reported to be around 1.8 million barrels per day excluding condensate, which makes the commodity by far the country's most important export and source of revenue. However, Nigeria has been substantially affected by the continued fluctuation in global oil prices since 2014, which has in turn led to a well-publicized reduction in deal activity and investment in the country.

These global issues have been exacerbated by the deeply entrenched challenges presented by ineffective regulation, lack of onshore processing options, and limited refining capacity in the country. Theft of crude oil and security issues have also been a major problem in certain parts of the oil rich Niger Delta. The emergence of new competitors such as US shale oil and Louisiana light sweet oils has also placed further pressure on the marketability of Nigerian products. Alongside this, advancements in renewable energy and the green lobby will increasingly have a dampening effect on global oil demand.

Although efforts have been made to reach agreement with protesters in the Niger Delta, disruptions remain a constant threat. Continuing social unrest is reflective of a wider political instability in the region, which hinders development in oil exploration and extraction activities and significantly increases the cost.

Furthermore, the public credibility of the state oil company, the Nigerian National Petroleum Corporation, is at an all-time low, having been damaged by numerous allegations of impropriety and failure to observe due process.

In response to these widespread concerns, the Federal Executive Council approved the National Petroleum Policy on 19 July 2017. This new policy aims to create a market-driven oil and gas industry and move the country away from oil as a source of income to oil as a fuel for economic growth. The Honourable Minister of State for Petroleum Resources, Dr Emmanuel Ibe Kachikwu, believes the policy will also minimize the environmental footprint of oil exploration and manage the balance between depleting oil resources versus renewable energy. The hope is that the policy will ensure better sector governance and transparency of regulations and operations. If implemented properly, it has the potential to effect a much needed overhaul of the nation's oil and gas industry and to invigorate the severely underdeveloped midstream infrastructure of the country, as well as to encourage foreign investors to re-enter the arena.

Further, the bid rounds for the much anticipated marginal field licensing for 2017/2018 may also attract significant interest from the domestic and international private sector, as many indigenous companies will need to develop technical and financial partnerships with foreign entities to demonstrate relevant upstream experience and technical and financial capacity to develop the marginal fields.

In order to move away from the heavy focus on oil, the Federal Government also approved the National Gas Policy on 28 June 2017, building on the policy goals of the "7 Big Wins" Initiative. The National Gas Policy has been commended for clearly articulating the strategies for harnessing the country's gas resources and aims to elevate gas from being a subsidiary of oil, to reposition Nigeria as a gas-based industrialized nation with access to infrastructure on transparent terms and conditions.

The policy developments of this year provide hope that many of the issues causing hesitancy amongst investors will be resolved. However, the Federal Government of Nigeria will have to ensure that the implementations of the policies are properly monitored and take proactive action for these positive first steps to have sustained impact.