Despite the increase in global oil prices, capital inflow into Nigeria’s oil sector has dropped by more than 82 percent in the second quarter of 2022.
Investors King learnt that while other sectors such as baking and manufacturing contributed immensely to the country’s economy, oil and gas barely make an impact.
Data from the National Bureau of Statistics (NBS) indicated that foreign capital inflow into the oil and gas sector accounts for 0.13 percent of fresh foreign investments into the Nigerian economy in Q2 2022, compared to other sectors like the banking and production sector contributing 42 percent and 15 percent respectively.
It is further revealed that the total value of foreign capital investment attracted by the petroleum industry in the second quarter of 2022 fell from $11.3 million in Q2 2021 to $1.93 million in Q2 2022.
Ola Alokolaro, a partner at Advocaat Law Practice (Energy and Infrastructure) disclosed that this is the lowest for Nigeria in 11 years.
He indicated further that the weak foreign investment in Nigeria’s oil and gas sector started in 2021.
It is evident that foreign investors are boycotting Nigeria’s oil for other places. Recently, Italian oil giant Eni agreed to acquire two producing fields in Algeria for an undisclosed sum, including stakes in two major natural gas projects, as the company plans divestments away from Nigerian onshore assets.
A French multinational oil company, TotalEnergies has also announced plans to sell its stake in a oil joint venture in Nigeria and invest about $850 million in oil projects in Angola.
Nigeria’s oil production has been facing one of its most turbulent times. Widespread oil theft and poor patronage are some of the prevailing challenges. Investors King had earlier reported that for the first time in five years, Nigeria lost its crown as Africa’s largest oil producer to Angola.