08 January 2019, Sweetcrude, Abuja — Investors’ apathy trailed the Nigerian petroleum industry in the third quarter of 2018, as foreign capital inflow in the industry dipped by 68.9 percent to $7.73 million compared to $24.85 million foreign capital recorded in the second quarter of 2018.
According to data obtained from the National Bureau of Statistics (NBS) Foreign Trade Statistics for third quarter 2018, the value of foreign capital inflow into the petroleum industry in the third quarter of 2018 was 51.9 percent lower than the $16.07 million in the third quarter of 2017.
The NBS report further stated that foreign capital inflow into the petroleum industry in the third quarter of 2018 accounted for 0.27 percent of total foreign investment inflow into the Nigerian economy in the quarter under review.
The report also revealed that the value of foreign investment inflow into the oil and gas industry in the third quarter 2018 was the lowest recorded since the first quarter of 2016.
Specifically, in the first, second, third and fourth quarters of 2016, $20.83 million, $200.39 million, $171.63 million and $327.30 million foreign capital flowed into the oil and gas industry respectively, while $101.08 million, $190.39 million, $16.07 million and $23.83 million flowed into the oil industry in the first, second, third and fourth quarters of 2017 respectively.
In 2018, the first quarter foreign capital inflow was the highest with $85.62 million, dropping by 70.98 the to $24.85 million the second quarter of 2018; while it dropped further by 68.9 percent to $7.73 million in the third quarter of 2018.
The NBS disclosed that the total value of capital importation into Nigeria in the third quarter of 2018, stood at $2.855 billion, dropping by 48.21 percent compared to $5.5 billion recorded in the second quarter of 2018 and a 31.12 per cent decrease compared $4.14 billion recorded in the third quarter of 2017.
The report said, “The largest amount of capital importation by type was received through Portfolio investment, which accounted for 60.5 per cent ($1.723 billion) of total capital importation, followed by Other Investment, which accounted for 21.07 percent ($601.53 million) of total capital, and then Foreign Direct Investment FDI, which accounted for 18.58 percent ($530.63 million) of total capital imported in the third quarter.
“By sector, capital importation as shares, which is closely related to equity investment (FDI and Portfolio Investment) dominated the third quarter of 2018 reaching $1.67 billion of the total capital importation in the quarter.”
Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, had during the presentation of the petroleum industry scorecard from 2016 to 2018, noted that investments were lacking in the petroleum industry.
According to him, the Federal Government had been working on rebuilding the country’s four refineries that are owned by the NNPC, adding that the NNPC had struggled to find the financiers, now financiers have finally been found, but to agree on the terms had been difficult.
He expressed optimism that between the end of this year and end of first quarter 2019, the commercial aspects of this financial undertaking, which is in the excess of over $2 billion, would have been completed, thereby, allowing the private sector invest in the refineries’ revamp.
On other measures that would drive foreign investment inflow into the Nigerian economy, Kachikwu said, “There are 30 other field works that have been approved by the DPR, which have the capacity of adding about 500,000 barrels per day production. If you add that, we expect that, all things been equal and if we are working as we should, by the end of 2019, we should be averaging 2.5 million barrels production, which would be the first time that would be done in the country.”