Investment into the Nige ria’s oil and gas industry dropped by 77.3 per cent to $5 billion in 2021, from $22 billion in 2014, due mainly to increased divestment by the International Oil Companies, IoCs.
The drop in investment is further worsend by the inability of other companies, except a few independents to invest in the industry.
The Chairman and Chief Executive, AA Holdings Limited, Dr. Austin Avuru, who presented an industry data to illustrate the trend, said much investment is still required as the nation would continue to depend on oil and gas for its revenue in the coming years, despite the glamour for energy transition.
Meanwhile, price of Nigeria’s Bonny Light, a major investment consideration increased by 4 per cent year-on-year, YoY, to $95 per barrel in September 2023, from $91.16 per barrel, recorded in the corresponding period of 2022.
But on month-on-month, MoM, the price of the oil grade, dropped by 8.4 per cent to $87.06 per barrel in early October 2023, from $95 per barrel in September 2023. The Organisation of Petroleum Exporting Countries, OPEC, which made the disclosure in its Monthly Oil Market reports, MOMRs obtained by Energy Vanguard, yesterday, did not provide reasons for the market trend.
But checks by Energy Vanguard attributed it to increased market volatility, occasioned by demand and supply as well as speculation. Divestment hinders investment — Expert In his keynote address – Unlocking Nigeria’s Remaining Energy Potential to Fuel Economic growth and Diversification: Opportunities and Challenges – at the pre-conference workshop of the Nigerian Association of Petroleum Explorationists, NAPE, in Lagos, he said: “The IoCs are leaving and will continue to divest. The IoCs are not hiring and investing as much as they used to invest in the oil and gas industry. It is only a few Independents that are still investing.
“The nation’s oil and gas reserves have been standing at more than 30 billion barrels and 203 trillion cubic feet respectively for too long. We need to increase investment in order to hit the 40 billion barrels reserves and 600 trillion standard cubic feet of gas in the coming years. That would require the deployment of many rigs. We have currently 45 rigs on duty.
“We need to invest between $120 billion and $125 billion yearly in the next five years to catch up. Significant infrastructure is required. We need to invest in infrastructure not only in the upstream sector but also in the midstream and downstream sectors.”
We need to dercarbonise — Seplat Similarly, the Chief Executive officer, Seplat Energy, Roger Brown, noted that investors have intensified efforts toward cleaner energy, adding, “The urgent need to decarbonise energy will reduce demand for fossil fuel as countries strive for net zero to meet essential climate targets.
Nigeria is a signatory to the Paris Agreement and passed the Climate Change Bill in November 21. Energy companies are shifting investment towards renewables although pace of change is slowing.” Despite the quest for energy transition, he said Nigeria and other African nations need energy to stimulate development in many sectors.
He said: “We need to focus on enabling the entire value chain, from wells to payments, create resilient and efficient power grids, and create an attractive regulatory and pricing regime to encourage investment and innovation across the value chain. Gas has a place as transition fuel and Africa has a right to use its resource