Oil companies set to announce new investments in Nigeria’s oil and gas sector says Enalamah
International Oil Companies are set to announce new significant investments into Nigeria’s oil and gas sector to plug the funding gap, following talks by stakeholders on how to revamp that very critical industry, minister of Industry, trade and Investments, Okechukwu Enalamah has said.
Enalamah said announcements of these commitments would be made beginning this week, though he could not specify how much is being expected. The minister also stressed that investment interest in Nigeria has been ‘overwhelming” as commitments reach some $20bn in the last one year.
“The oil companies have reached an agreement that is now being finalised to bring in more money into the oil sector. You will hear more about it from next week, we are just going through the process,” Enalamah confirmed exclusively at the weekend.
Nigeria, the world’s eighth largest producer of crude oil, is said to require up to $9 billion annual capital investments in its oil and gas sector to fund exploration and development to achieve the nation’s crude production targets, according to recent figures from the Nigerian Investment Promotion Commission (NIPC).
Foreign investors have continued to shun the sector, citing prevailing insecurity in the Niger Delta area of the country, inadequate infrastructure and inconsistency in government policies.
But investment inflows into the country’s oil and gas sector dropped 14 percent from the $200 million from the second quarter of 2016 to $172 million in third quarter, according to data from the National Bureau of Statistics (NBS) in its latest capital inflows report.
Analysts attribute this to uncertainty in the country’s oil and gas sector, occasioned by insecurity, delays in the passage of the Petroleum Industry Bill (PIB) as well as in meeting contractual obligations in the industry.
The Industry and Trade minister said talks are on going among critical stakeholders, including the governors on the matter. “There was a meeting yesterday (Thursday)with the National Economic Council on the matter. Other stakeholders will be briefed but it’s a very important programme to bring in billions of dollars into the country, ” the minister stressed, adding, “as they say, you need oil to get out of oil and this will improve the oil sector significantly.”
The minster also said that investments prospects in Nigeria remained high despite its numerous challenges and that in the last one year, inflows, including commitments have reached up to $20bn.
“People are surprised about how big investment inflows are because they have come in large chunks but let me tell you that we have gotten a total of well over $20 billion,” he said.
“If you look at the infrastructure projects that we are doing, there is a twenty billion or more infrastructure project with the China EXIM bank, it has been signed and its now implemented around railways and related infrastructure.”
He also said there is also an agreement with General Electric of about $2billion which they committed in the past year.
“There was a deal that was done by Chi fruit juice company with Coca-Cola which is also hundreds of million of dollars,” the minister further disclosed.
He said most countries, especially Germany, Singapore, Turkey, see Nigeria as a very important country for several reasons and are quite keen to invest in the Africa’s most populous country.
” I think what you find is that Nigeria is a country that people are genuinely interested in and I view that as an asset.
“There is no country you go- no matter how big or small, that they do not give us the highest treatment that they reserve for the most important countries in the world.”
He said government is now restructuring the Nigerian Investment Promotion Council (NIPC) in an attempt to reposition it to effectively deliver on its mandate of driving investments, going forward.
“As you know NIPC has just appointed a new hand for the private sector. As a government we want to partner with the private sector, government does not have all the money it needs to develop the country.”
He said government is most willing and committed to partnering with the private sector players and also development capital to develop the country by making sure the capital goes into the right places. “So I think you will find that in investment, things are picking up even in terms of statistics.
“There is a significant uptick in investment, even though some of it has to do with fixed income investment but it’s still capital that we need,” the minister noted.
Source: Nigeria Today