Deloitte’s 2025 West Africa Oil and Gas Outlook reveals that West Africa is among the most expensive regions globally for oil drilling, posing significant challenges for producers in Nigeria to compete on the international stage. Elevated security risks in the Niger Delta lead to higher costs for expatriate roles, adding substantial premiums to project expenses without a corresponding increase in productivity.
The report highlights that while local content regulations are essential for building domestic capacity, they can inadvertently inflate costs when necessary inputs or services are unavailable locally. This situation creates friction between producers and governments, as the intent of local sourcing often results in duplicated spending when offshore procurement becomes necessary.
In response to these cost pressures, the Nigerian president has issued executive orders aimed at streamlining complex procurement processes and local content regulations. Consequently, oil producers in West Africa are compelled to find savings elsewhere, prompting a shift towards greater investment in technology and data analytics to enhance operational efficiency.
Deloitte’s consulting teams note that the move towards digital tools is aimed at unlocking cost savings across operations, finance, and supply chain functions. Ultimately, the report emphasizes that addressing these cost premiums requires government intervention to simplify contracting processes and reduce inefficiencies while supporting local supply chains.