Nigeria attracts only 4% of Africa’s $75 bln oil & gas investment in 4-year~LCCI
The delay in the passage of the Petroleum Industry Bill (PIB) by the country’s parliament has held back investment in Nigeria’s oil and gas sector, according to the nation’s premier trade group.
Nigeria could only attract four percent of Africa’s $75 billion oil and gas investment between 2015-2019 due to the delay in the passage of the PIB, the Lagos Chamber of Commerce and Industry (LCCI) has said.
Its Director General, Muda Yusuf said in a statement that the investment climate in the country has continue to push away investors from the oil and gas industry, which is a major contributor to the country’s economy and government revenue.
“Nigeria, with the largest oil and gas reserves in Africa, has huge untapped potential to achieve its economic development goals including gas-to-power ambitions.
“Despite having the largest reserves in Africa, Nigeria only received four percent ($3 billion) of $75 billion invested in the continent between 2015-19.
“This underscores the need to create a competitive environment to attract investment to the oil and gas sector.
“The fundamental shift in global energy markets driven by advances in unlocking unconventional petroleum resources and increasing traction for cleaner energy sources has resulted in a global oversupply of crude oil, putting pressure on prices. This has been further worsened by the Covid-19 pandemic, potentially putting at risk the viability of ongoing and future projects and driving fierce competition for scarce investments around the world.
“Further to the above, Nigeria’s petroleum industry faces many country-specific challenges, including Joint Venture Funding and Arrears, regulatory overlaps, insecurity and inadequate infrastructure for domestic gas development.
“The Lagos Chamber of Commerce and Industry is fully supportive of the government’s efforts to drive industry reform through a new Petroleum Industry Bill.
“The key objectives of the PIB 2020, amongst many others, including reforming the institutional and fiscal framework, developing Nigeria’s gas sector further, creating a framework to support the development of host communities and foster sustainable prosperity, and further bringing in new investments to grow the country’s production capacity.”
“The current Bill marks positive steps toward achieving its stated goals.
“The Bill mandates ministries, departments, and agencies to consult with the commission prior to introducing overlapping legislation which will impact the oil and gas industry. It also allows for consultation with industry stakeholders before making regulations.
“The commercialisation of NNPC aims to improve business efficiency and effectiveness, especially in relation to Joint Venture activities.
“However, some of these improvements appear insufficient to deliver the true value to Nigeria, which the Bill aims to achieve. “Some provisions in the bill could adversely affect the growth of the industry and the overall economy.
“We firmly believe that based on constructive co-operation between the Nigerian Government and other stakeholders, host communities and Industry, the objectives of reform can be successfully met.”