Nigeria: Foreign investment – Nigeria loses to other African countries in oil and gas
There are indications that foreign investors are shedding the Nigerian gas sector as other African countries have attracted larger investments over the past 10 years.
Minister of State for Petroleum, Timipre Sylva, told a section of EU ambassadors to Nigeria that of the more than $70 billion in investments that entered Africa between 2012 and 2022, only $3.5 billion of dollars or 5% entered Nigeria, although it amounts to 33 billion dollars. percent of gas reserve on the continent.
A breakdown of investments showed that Tanzania received a significant share of gas investment of $30 billion, with the country’s LNG project located in Lindi, while the Rovuma Basin gas development project offshore Mozambique , received $4.7 billion.
The Ethiopia-Djibouti gas pipeline, located in the Ogaden basin, eastern Ethiopia – Damerjog, Djibouti, which started in 2020, received $4 billion.
Sylva said: “One of the biggest challenges in the sector is the lack of investment. came to Nigeria.
“Amazingly, we are the biggest in Africa. If we can’t attract investment in Nigeria, you know where we are going. You are our longtime friend. As of today, our gas reserve is one of the largest in the world. We have a proven gas reserve of 206 tcf and if we really focus on exploiting the gas, we can get up to 600 tcf.”
However, the simmering war between Ukraine and Russia, which has threatened gas supplies to European countries, may have necessitated a call from Sylva for foreign investors to look to Nigeria with more confidence. investments, insisting that Nigeria was ready to step in as an alternative gas supplier. in Europe.
Commenting, Managing Director of Oildata Energy Group, Emeka Ene, said property rights, enabling environment and opportunity cost are the three factors that trigger and attract investment in any sector or country. .
He said: “Rule of law and property rights are linked. The second which is an enabling environment, and we have had challenges in the past regarding security and all the issues associated with the production of petroleum products.
“The third is opportunity, which we have in abundance, but what you find out is that the lack of rule of law and lack of property rights makes it difficult for investors to invest and to be able to predict that he will recoup his investment and make a profit.
“We keep dangling opportunity, forgetting that investing is on a tripod, and without the tripod, no investor will come. Investment money has a female gender, it doesn’t come where it doesn’t. is not welcome, and we are now in a more competitive world than we were 20 years ago.”
Additionally, an industry governance expert, Michael Uzoigwe, in conversation with Vanguard, noted that although the Petroleum Industry Act, the PIA has been signed, but implementation has not started. .
“Investors who invest in any project are looking for profitability and security of their investment.
“Nigeria, which benefits from less than $4 billion, also refers to the fact that investors are aware of the business climate in Nigeria. We believe that this development will be self-addressed with the signing and implementation of the PIA .”
However, the ambassadors led by Samuela Isopi, urged the Nigerian government to take advantage of the opportunity presented by the current crisis in Europe to boost gas supplies to Europe.
She also said, “The Nigerian government must strengthen security in the Niger Delta region to ensure gas supplies to EU member states.
“The wave of attacks against the gas infrastructures of Shell, Eno and Total Energies which led to the declaration of force majeure by the companies is of great concern to Europe.
“Recent developments in the Niger Delta are of great concern to us.”