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Concerns as Nigeria Fails to Attract Big Oil Investments



oil field
  • Concerns as Nigeria Fails to Attract Big Oil Investments

While other African oil-producing countries are gearing up to attract investments, regulatory uncertainty in Nigeria’s oil and gas industry has continued to darken the outlook for big projects in the country.

Several planned deepwater projects in the country, with the potential to bring online almost 1.1 million barrels of new production daily over the next five or more years, have been repeatedly pushed back by the International Oil Companies.

Since February 2012, when the 125,000-bpd Usan deepwater field started production, no major oil field has come on stream in the country.

Total’s $16bn Egina deepwater oilfield project, whose Floating Production, Storage and Offloading vessel recently sailed away from a fabrication and integration yard in Lagos for installation on the field, is expected to add 200,000 bpd to Nigeria’s oil production.

Analysts at PwC, noted in a new report titled ‘Africa’s oil and gas review’, that the industry was still awaiting the passage of the Petroleum Industry Bill.

“The associated uncertainty has likely caused the deferment of Final Investments Decisions for a host of upstream and midstream projects,” they said.

The bill, which seeks to change the organisational structure and fiscal terms governing the industry, suffered setbacks in the 6th and 7th National Assembly.

To fast-track its passage into law, the current National Assembly decided to split the bill into four parts – the Petroleum Industry Governance Bill, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill.

After its passage by both the Senate and the House of Representatives, the PIGB was transmitted to the President for assent in July to enable it to become law but President Muhammadu Buhari declined to assent to the bill.

The Chairman/Chief Executive Officer, International Energy Services Limited, Dr Diran Fawibe, in a telephone interview with our correspondent on Wednesday, noted that the taking of the final investment decisions on the deepwater projects had been very slow.

Projects that have not been sanctioned are Shell’s Bonga South-West and Aparo (225,000bpd) and Bonga North (100,000bpd), ExxonMobil’s Bosi (140,000bpd), Satellite Field Development Phase 2 (80,000bpd) and Uge (110,000bpd), Eni’s Zabazaba-Etan (120,000bpd), and Chevron’s Nsiko (100,000bpd).

Fawibe, a former top executive in the Nigerian National Petroleum Corporation, said Bonga South-West and Zabazaba-Etan were estimated to cost more than $10bn each, adding, “When you have inflows of this magnitude into an industry of a country, of course, that is a big investment.”

He said, “When international oil companies or investors have reservations about the economic condition of a country, the tendency is to delay their decisions. But the government, realising this, would then have to find a way of convincing or wooing them to ensure that they make the decisions in good time. If the oil companies are given incentives to make investments, surely they will do that.”

He noted that a lot of countries had discovered oil, saying the amount of investment that used to come to Nigeria would now have to be shared.

“But our behaviour does not reflect an understanding of that; we behave as if we are the only country in the world. By the time we get to understand that there are other countries competing for the same funds, maybe we will be able to take actions,” Fawibe added.

Commenting on the PIB, he said, “Time is running out, although we still have six or seven months to the end of the tenure of this current administration. If they are determined to do it, they can. And that is the assurance they have been giving, but there is nothing on the ground that will show that indeed they are committed to it.”

Nigeria’s oil and condensate production showed recovery last year and is estimated to remain at the level of two million bpd in 2018, according to Rystad Energy, an oil and gas consulting services and business intelligence data firm.

It said in an October 29, 2018 report, “While Nigeria is not expected to ramp up production further in the future, sanctioned and unsanctioned projects waiting to be put on stream would be able to offset declining volumes from mature fields, keeping oil supply stable.”

“The timely development of these resources is seen as key for maintaining the country’s oil supply. Given the favourable economics of upcoming projects, the development is expected to take place as planned, provided that the political situation does not create disruptions.

“The development of the projects, expected to be sanctioned in the next five years, is further expected to contribute to the growth in the medium and long-term investments in the country.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Baker Hughes Set to Boost Nigerian Energy Landscape with Refinery Investments and Oil Field Bid Participation



Global oil and gas giant Baker Hughes has expressed its commitment to invest in Nigerian refineries and actively participate in the upcoming bid round for marginal oil fields, according to an announcement by the Federal Government on Sunday.

The announcement followed a meeting between Nigeria’s Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, and Baker Hughes Chairman/President Lorenzo Simonelli at the 28th United Nations Climate Change Conference in the United Arab Emirates.

During the meeting, Baker Hughes expressed its eagerness to sustain and enhance its investments in Nigeria’s oil and gas industry, particularly showcasing interest in contributing to the country’s refinery sector.

Simonelli emphasized the company’s commitment to supporting Nigeria’s energy transformation agenda.

“Nigeria is a blessed nation with vast potentials and great opportunities in diverse sectors. As a partner with the Federal Government over the years, we are inspired to direct investment in the refinery domain of oil and gas,” said Simonelli.

In response, Minister Lokpobiri welcomed Baker Hughes’ move, highlighting the pivotal role Nigeria plays in the global energy landscape.

He expressed optimism about deepening collaboration and assured the company of the Federal Government’s commitment to creating an enabling environment for investments in the refinery sector.

“I am very happy that you have joined other companies in identifying the great opportunities and government’s favourable policies in our oil and gas sector,” Lokpobiri stated.

Additionally, the Minister’s media aide confirmed Baker Hughes’ interest in participating in Nigeria’s forthcoming marginal oil fields bid round, signaling a broader engagement in the nation’s energy sector.

This move aligns with Nigeria’s efforts to revitalize its oil and gas industry, with ongoing rehabilitation works at the country’s three refineries and the anticipation of increased investments under the new Petroleum Industry Act (PIA).

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Nigeria Export-Import Bank Highlights Lucrative Investment Environment with Mexico




In a meeting with the Mexican Ambassador to Nigeria, Alfredo Miranda, the Nigeria Export-Import Bank (NEXIM) revealed that investors in Nigeria are enjoying robust returns on their investments, even up to 30 percent.

Stella Okotete, the Executive Director of Business Development at NEXIM, highlighted the immense potential for collaboration between Nigeria and Mexico, emphasizing the benefits of expanding access to Nigerian goods in the Mexican market.

Okotete urged for a strategic partnership between the two nations, emphasizing that collaboration could enhance Nigeria’s foreign exchange earnings, attract investment opportunities, and foster prosperity for citizens in both countries.

She showcased Nigerian-made export goods financed by NEXIM, while underscoring other investment opportunities available in Nigeria.

She stated, “In terms of return on investments, this is the best place you can invest,” indicating the favorable investment climate in Nigeria, especially in the non-oil export sector.

Okotete also highlighted the untapped potential in Nigeria’s mining sector, expressing readiness to collaborate with Mexico to develop this sector for export.

The visit by the Mexican delegation is seen as a significant step toward strengthening economic ties between the two nations, exploring mutual benefits, fostering economic growth, and identifying investment opportunities.

Ambassador Miranda acknowledged Nigeria’s potential and initiatives by NEXIM to promote non-oil exports.

He stressed the need to identify business opportunities that could enhance trade, attract investment, and facilitate the development of both countries through their trade policies.

The meeting reflects a positive stride towards enhancing economic cooperation and fostering a strong economic partnership between Nigeria and Mexico.

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Mexican Investors Explore Solid Minerals Opportunities in Nigeria



mining sector

The Minister of Solid Minerals Development, Dele Alake, welcomed a delegation of investors from the Republic of Mexico who are exploring investment opportunities in Nigeria’s solid minerals sector.

Minister Alake commended this initiative and underscored the commitment of President Bola Tinubu’s administration to facilitating a conducive business environment for investors in the industry.

The minister highlighted several incentives aimed at attracting investments, including zero-duty on equipment for solid minerals extraction, seamless repatriation of profits to the investors’ home countries, and tax holidays.

To ensure responsible and sustainable practices, Alake emphasized the importance of investors signing Community Development Agreements with local communities in mining areas to promote socio-economic development.

The ongoing efforts to sanitize the mining industry were also discussed, citing recent actions such as the revocation of titles failing to comply with annual service fee regulations.

Nigeria’s outgoing Ambassador to Mexico, Adejare Bello, vouched for the credibility of the visiting investors, affirming that their genuine and serious interest in business aligns with Nigeria’s economic objectives.

President of Seccion Internacional Para Africa, Dr. Heriberto Cortes, speaking on behalf of the investors, expressed gratitude for the constructive discussions with Minister Alake.

Cortes emphasized Nigeria as their African home and conveyed confidence in the safety and profitability of their investments in the country.

The visit signifies a positive stride towards strengthening economic ties between Nigeria and Mexico.

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