A Review of the Nigerian Energy Industry

NNPC woos foreign investors to Nigeria’s $48bn oil sector opportunities

NNPC woos foreign investors to Nigeria’s $48bn oil sector opportunities
*NNPC-Towers, Central Business District, Garki, Abuja.

Ike Amos

01 March 2019, Sweetcrude, Abuja — The Nigerian National Petroleum Corporation, NNPC, yesterday, invited foreign investors to shift their focus to the Nigerian petroleum industry, noting that there are currently over $48 billion investment opportunities in the industry.

According to the statement by the NNPC, Group Managing Director of the NNPC, Mr. Maikanti Baru, stated this at a Panel Session on the topic “Insights on Future Exploration Hotspots: Opportunities for Africa’s Oil & Gas Industry” under the sub-theme “The New Frontier for Africa’s Oil & Gas” at the 2019 International Petroleum Week conference in London.

Baru disclosed that several new frontiers for exploration opportunities abound in Nigeria, noting that offshore discoveries in the country had mostly been limited to between 1,000 – 1,500 meters of water depth.

He stated that the NNPC’s Frontier Exploration Service was currently drilling the Kolmani River-2 Well, where desktop estimates revealed that about 400 billion cubic feet, BCF, of gas, is expected to be encountered.

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

He, however, stated that unless issues related to legal and regulatory uncertainties, lack of infrastructure, skilled manpower shortage, transparency, and accountability are addressed amongst key stakeholders, the continent’s oil and gas industry may not achieve its full potentials.

Commenting on the numerous potentials of Africa’s Oil and Gas Industry, Baru said the continent’s energy outlook was looking positive amid difficult operating and economic headwinds.

He explained that over 41 billion barrels of oil and 319 trillion cubic feet of gas were yet to be discovered in sub-Saharan Africa alone, while between 2008 and 2017, exploratory success in the sub-region was at least 45%.

According to him, there had 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%) of the total CAPEX coming into upcoming projects in Africa over 2018 to 2025, with over 20 planned projects,” Baru stated.

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

Baru noted that with more than 14 oil-producing countries, Africa currently accounts for 7.5 percent, about 126.5Billion barrels of crude oil, and 7.1 percent, about 488 trillion cubic feet, TCF, of gas, of global proven oil and gas reserves respectively.

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