Nigerian press spotlights $21bn investments moved to other countries by foreign oil companies, others

APA – Lagos (Nigeria)
The report most international oil companies that operate in Nigeria’s upstream sector redirected their capital investments worth about $21bn to other countries between 2014 and 2022 is one of the trending stories in Nigerian newspapers on Friday.
The Punch reports that most international oil companies that operate in Nigeria’s upstream sector redirected their capital investments worth about $21bn to other countries between 2014 and 2022, the Federal Government announced on Thursday.
It attributed this to regulatory uncertainty in Nigeria’s oil and gas sector prior to the enactment of the Petroleum Industry Act 2021, and the de-funding of fossil fuel development occasioned by the energy transition and COVID-19.
The government disclosed this in Abuja through the Nigerian Upstream Petroleum Regulatory Commission at the just concluded Nigeria International Energy Summit.
Speaking at the summit, the Chief Executive, NUPRC, Gbenga Komolafe, said the country’s yearly capital expenditure in the upstream arm of the oil sector decreased by over 70 per cent within a period of eight years.
“Unfortunately, in the years preceding the enactment of the Petroleum Industry Act (2021), investments in the Nigerian oil and gas industry declined due to regulatory uncertainty in addition to de-funding of fossil fuel development occasioned by energy transition and COVID-19.
“Most of the IOCs deprioritised Nigeria in their portfolios leading to the redirection of CAPEX (capital expenditure) to other countries and the attendant dwindling investment in Nigeria’s upstream sector.
“For instance, Nigeria’s total annual upstream capital expenditure decreased by 74 per cent from $27bn in the year 2014 to less than $6bn in 2022. Moreso, increasing competition from regional peers has led to a decrease in the proportion of the overall upstream investment attracted by Nigeria,” he stated.
The newspaper says that Nigerian students numbering over 1,262 have appealed to the Federal Government to evacuate them from the Republic of Sudan where a fierce military confrontation between the Sudanese armed forces and the paramilitary group, Rapid Support Force, has claimed 330 lives with 3,200 injured.
The Secretary-General of the National Association of Nigerian Students, Sudan, Adam Mohammed, who said this in an interview with The PUNCH on Thursday, lamented that many students had run out of food.
The clashes had also displaced thousands of civilians who fled the capital, Khartoum, even as some foreign nations, including Japan, Uganda and Tanzania had begun evacuating their nationals as the violence which started on April 8 entered its 12th day on Thursday.
Until recently, the Sudanese Armed Forces, led by General Abdel al-Burhan, and the RSF paramilitary group, headed by General Mohamed Dagalo were allies.
They worked together in 2019 in a popular uprising that overthrew Sudan’s brutal dictator, Omar al-Bashir, who ruled the country for three decades.
After the coup, a power-sharing government was formed, made up of civilian and military groups.
The plan was for the interim government to rule Sudan for a few years and oversee a transition to a civilian administration but in 2021, al-Burhan, who had become chief of the power-sharing council, dissolved it, declaring he would instead hold elections in 2023.
The Guardian reports that investment in the upstream segment plummeted by 74 per cent between 2014 and 2022, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said in Abuja, yesterday.
Chief Executive of the Commission, Gbenga Komolafe, who disclosed this at the Nigeria International Energy Summit, said over $27 billion was invested in the sector in 2014, but this went down to as low as $6 billion in 2022.
According to him, increasing competition from regional peers has led to decrease in proportion of the overall upstream investment attracted by Nigeria.
“Most of the international oil companies deprioritised Nigeria in their portfolios, leading to redirection of capital expenditure to other countries and attendant dwindling investment in Nigeria’s upstream sector.
“This under-investment is also reflected in the country’s rig count. On average, Nigeria had 17 active oil rigs in 2019, representing one of the highest counts on the African continent as at then. Nigeria’s average rig count declined to 11 in 2020, seven in 2021, 10 in 2022, but recently grew to 24 in April 2023, a positive signal of new investments trickling into the country.
“This is also a reflection of investors’ acceptance of effective implementation of the Petroleum Industry Act (PIA) by the regulator. In contrast, other OPEC member countries, such as Iran, Iraq, Algeria, Libya, Angola, had 117, 62, 31, 12 and nine active rigs, respectively, as of February 2023, as against Nigeria’s rig count, which stood at 13,” Komolafe said.
With the boom in the oil sector, Komolafe said there is need for Nigeria to leverage on the opportunity by doing all that is necessary to attract more investments and revive the upstream sector.
He stressed the need for oil and gas producers in Africa to embrace the reality of green transition and take strategic position to leverage opportunities presented by the unfolding era.
Komolafe called for climate action initiatives targeted at emissions reduction, while ensuring that opportunities arising from increasing demand for credit in Voluntary Carbon Markets do not elude Nigeria.
The newspaper says that despite uncertainty in the global financial market, investors are confident in the outlook of the continent even as West Africa pooled a total of $843 million in venture capital inflow last year.
These are contained in the 2022 Venture Capital in Africa Report compiled by the African Private Capital Association (AVCA) and released yesterday.
The report, which captures venture capital performance in Africa by deals, volumes, value, and investment stage, indicates the industry’s resilience despite global uncertainty.
According to the report, of the 786 venture capital deals, 235 were in West Africa, again recording the highest volume of deals across the continent, followed by North Africa (178) and East Africa (168).
With $1.1 billion, North Africa led deal values across the continent, as East Africa attracted $899 million, while West Africa secured inflows of $843 million.
Powerhouse economies – Nigeria, Egypt, South Africa and Kenya – remain the most attractive locations for venture capital investment, accounting for 64 per cent of deal volume and 51 per cent of deal value combined.
The new report is a comprehensive overview of Africa’s innovation ecosystem, providing critical insights into sub-regions, countries and sectors that have cemented Africa’s rising position in venture capital activity and the increasing importance of early-stage investment on the continent.
The report stated that in the wake of the COVID-19 pandemic and the resulting capital injection, central banks responded to loose monetary policy while interest rates climbed throughout the year as efforts to rein in inflation intensified.
Owing to the restrictive environment, it said, the global venture funding landscape shrunk by 32 per cent, from $681 million invested in 2021.
The report noted that despite the cautious capital deployment around the globe, commitments in Africa remained strong.
GIK/APA