Market News

By Prince Okafor

There are indications that foreign investors are sidelining Nigeria's gas sector as other African countries attracted higher investments in the past 10 years.

The Minister of State for Petroleum, Timipre Sylva, told a section of EU Ambassadors to Nigeria, that out of over $70 billion worth of investments that entered Africa between 2012 and 2022, only $3.5 billion or five percent came into Nigeria, despite accounting for 33 percent gas reserve in the continent.

A breakdown of the investments showed that, Tanzania received major chunk in gas investment of $30 billion, with the country's LNG project located at Lindi, while Rovuma basin, offshore Mozambique gas development project received, $4.7 billion.

Ethiopia-Djibouti Gas Pipeline, located at Ogaden Basin, East Ethiopia - Damerjog, Djibouti, which started in 2020, received $4 billion.

Sylva stated: "One of the biggest challenges the sector has is lack of investments. In the last 10 years, over $70 billion worth of investments came to Africa, but sadly less than four billion dollars came to Nigeria.

"Surprisingly, we are the biggest in Africa. If we cannot attract investments to Nigeria, you know where we are heading. You have been our long time friend. As of today, our gas reserve is one of the biggest in the world. We have a proven gas reserve of 206 tcf and if we really focus on gas exploitation we can get up to 600 tcf."

However, the festering war between Ukraine and Russia which has threatened gas supply to European countries, may have necessitated a call by Sylva to the foreign investors to look to Nigeria with more investments, insisting that Nigeria was ready to step in as an alternative gas supplier to Europe.

Stakeholders react

Commenting, the Chief Executive Officer, Oildata Energy Group, Emeka Ene, said that property rights, enabling environment and opportunity cost, are the three factors that triggers and attracts investment in any sector or country.

He stated: "The rule of law and property rights are tied together. The second which is enabling environment, and we have had challenges in the past regarding security and all the issues associated with producing petroleum products.

"The third one is the opportunity, which we have in abundance, but what you find out is that the absence of rule of law and property rights makes it difficult for investors to invest and be able to predict that he will recover his investment and make profit.

"We keep dangling the opportunity, forgetting that investment stands on a tripod, and without the tripod, no investor is going to come. Investment money has a female gender, it does not come where it's not welcomed, and we are now in a more competitive world than we were 20 years ago."

Also, a sector governance expert, Michael Uzoigwe, in a chat with Vanguard, noted that although the Petroleum Industry Act, PIA has been signed, but the implementation has not started.

"Investors investing in any project look out for profitable, and security of their investment.

"Nigeria benefitting less than $4 billion, also refers to the fact that investors are mindful of the business climate in Nigeria. We believe this development will be self-addressed with the signing and implementation of PIA."

However, the Ambassadors led by Samuela Isopi, urged the Nigerian government to take advantage of the opportunity offered by the present crisis in Europe to shore up gas supplies to Europe.

She also stated: "The Nigerian government needs to step up security in the Niger Delta region to guarantee gas supply to EU member states.

"The spate of attacks on Shell, Eno and Total Energies's gas infrastructure which led to the declaration of force majeure by the companies is of great concern to Europe.

"The recent developments in the Niger Delta is of great concern to us."