Nigeria to Attract $48bn of $194bn Oil Investment in Africa

Chineme Okafor in Abuja

Nigeria will attract $48.04 billion or 24.8 per cent of an estimated $194 billion total oil and gas investment slated to be made in Africa within the next seven years, the Nigerian National Petroleum Corporation (NNPC), has disclosed.

The country’s closest rival on the continent, Angola, will take 11.3 per cent of the total expected spend, while emerging jurisdiction, Mozambique, will have as much as 23.8 per cent of the $194 billion investment, the corporation said.

The NNPC also stated that within this investment window, the country would account for 20 out of the 93 projects to be funded across the continent’s oil and gas industry.

The Group Managing Director of NNPC, Dr. Maikanti Baru, was quoted as making these disclosures during a session at the 2019 edition of the International Petroleum Week in London.

The International Petroleum Week is reportedly organised by the London-based Energy Institute, and attracts top executives of global oil and gas firms, as well as other energy professionals to discuss issues affecting the hydrocarbon sector.

According to a statement signed by the corporation’s Group General Manager, Public Affairs, Mr. Ndu Ughamadu, the NNPC boss called on investors across the globe to take advantage of the $48.04 billion expected investment opportunities.

Baru said the continent’s energy outlook was looking positive amid difficult operating and economic headwinds, and explained that over 41billion barrels of oil and 319 trillion cubic feet (tcf) of gas were yet to be discovered in sub-Saharan Africa alone.

According to him, between 2008 and 2017, exploratory success in the sub-region was at least 45 per cent.
He added that there has been a surge in the capital expenditure (CAPEX) across Africa’s oil and gas sector, with close to $194 billion earmarked to be spent between 2018 and 2025 on 93 upcoming oil and gas fields in Africa.

“Out of this $194 billion, Nigeria accounts for $48.04 billion (over 24.8 per cent) of the total CAPEX coming into upcoming projects in Africa over 2018 to 2025, with over 20 planned projects,” said Baru.

He also added that 23.8 per cent of the CAPEX in Africa would be spent in Mozambique; 11.3 per cent in Angola while about 29.2 per cent would be spent in Tanzania, Senegal, Mauritania, Uganda, Egypt, Algeria and Kenya combined.

Baru informed that with over 14 oil producing countries, Africa currently accounted for 7.5 per cent or 126.5 billion barrels of crude oil and 7.1 per cent or 488 trillion cubic feet (tcf) of gas, out of the global proven oil and gas reserves respectively.

He maintained that in terms of production, the continent accounted for 8.7 per cent of 8.1 million barrels per day (mbpd) of global oil production and 6.1 per cent or 21.8 billion cubic feet per day (bscf/d) of global gas production.

However, the continent, he added consumed four million barrels of oil per day and 13.7 bscf/d of gas which are equivalent to 4.1 per cent and 3.9 per cent of global oil and consumption respectively.

Shedding more light on investment opportunities in Nigeria, Baru observed that the NNPC’s Frontier Exploration Service was currently drilling the Kolmani River-2 Well where desktop estimates revealed that about 400 bcf of gas was expected to be encountered.

He said several new frontiers for exploration opportunities abound in Nigeria, and that offshore discoveries in the country have mostly been limited to between 1,000 to 1,500 meters of water depth.

“Beyond these water depths, the new frontiers of ultra-deep waters need to be tested. And that is where we need the investors,” he added.

He further stated that unless issues related to legal and regulatory uncertainties; lack of infrastructure; skilled manpower shortage; transparency and accountability, are addressed among key stakeholders, the continent’s hydrocarbon industry may not achieve its full potential.