Nigeria has lost a significant $6 billion oil investment to Angola, highlighting major issues within its oil sector. TotalEnergies CEO Patrick Pouyanne disclosed this investment decision at the Africa CEO Forum in Kigali, Rwanda. Pouyanne cited persistent bottlenecks and a lack of exploration activity in the Niger Delta region over the past 12 years as key factors in this decision. He expressed concerns over Nigeria’s inconsistent oil sector policies under the leadership of President Bola Tinubu, who also serves as the Minister of Oil, alongside two Ministers of State for oil and gas.
The Nigerian oil sector, once a beacon of substantial foreign investment, has seen a drastic reduction in capital inflow, with figures plummeting from $22.2 billion in 2014 to just $6 billion in 2021. More starkly, the National Bureau of Statistics (NBS) reported that foreign investment had dropped to zero in the second quarter of 2023. This decline is attributed to a combination of complex regulatory issues and ongoing security concerns, which have also prompted international oil companies (IOCs) to divest their assets.
Pouyanne highlighted the underutilization of the Niger Delta, which he described as the most prolific part of West Africa for oil production. “In reality, because of these debates over policy and security, there has not been a single exploration in Nigeria for 12 years,” he explained. The CEO underscored a general mistrust in the Nigerian system, which contrasts sharply with the situation in Angola. “We have countries like Angola that have perfectly integrated policies. So, we went to Angola and announced a very large $6 billion project at the beginning of the week because their framework is stable,” Pouyanne said.
The ongoing crisis of insecurity in Nigeria, which appears to have resisted political solutions, is another significant concern for investors. Pouyanne emphasized that the security of personnel is a priority, influencing TotalEnergies’ decision to invest elsewhere.
In response to these investment losses, Nigeria is actively seeking to improve its attractiveness to international investors. Heineken Lokpobiri, Nigeria’s Minister of Petroleum Resources (Oil), met with Salem Saeed Al Shamsi, the United Arab Emirates (UAE) Ambassador to Nigeria, to discuss potential investments. During the meeting, Lokpobiri highlighted the recently enacted Petroleum Industry Act (PIA) as a robust legal framework designed to secure and profit from investments, reshaping the oil and gas sector to create a more favorable investment climate.
“The PIA ensures a secure and profitable investment climate, making Nigeria an attractive location for investors,” Lokpobiri noted, emphasizing that the business environment in Nigeria remains friendly, with vast deposits of crude oil ready for exploration and development.
Ambassador Al Shamsi acknowledged the potential within Nigeria’s energy sector and appreciated the steps being taken by the Nigerian government to foster a conducive environment for investment. This dialogue represents a crucial step towards restoring confidence among international investors, potentially paving the way for future investments that could revitalize Nigeria’s oil sector.
The challenges faced by Nigeria in retaining and attracting oil investments highlight the need for consistent and stable policy frameworks, alongside improvements in security and regulatory processes. As Nigeria works to address these issues, the focus remains on legislative reforms and diplomatic engagement to reassure international stakeholders of the country’s commitment to a thriving and secure oil industry.
Through these efforts, Nigeria aims not only to recover lost ground in the global oil market but also to establish a more resilient and investor-friendly environment that can compete with more stable regions like Angola. The success of these initiatives will be critical in determining the future trajectory of Nigeria’s oil industry and its ability to attract the significant investments needed to harness its vast natural resources.
