Nigeria’s oil and gas output has been stalled by matters such as insecurity and a lack of new industry investments. While oil theft and other insecurities have kept the monthly oil output low, the lack of new investment has kept the country’s sustainable output level below potential. In H1 2023, oil production averaged 1.45 million barrels per day (mb/d), significantly lower than the country’s nameplate capacity of about 2.5 mb/d. To attract new investment and capture existing investments worth over US$18 billion, including projects such as Ubetta and Prowei by Total Energies; Bonga-North by SNEPCO; Agbami Gas Project by Stardeep; Owowo by Esso and other upcoming upstream projects, Bala Wunti, the Chief Upstream Investment Officer of NNPCL has called upon the Nigerian government and oil companies to adopt sustainable practices, reduce greenhouse gas emissions, and implement international standard practices in the oil and gas industry.
Previous governments have made efforts to encourage investment in Nigeria’s oil and gas industry, but three key factors have hindered these endeavors: an uncertain regulatory environment, insecurity of infrastructure, and foreign exchange scarcity, which made it challenging for investors to repatriate their funds. Analysts argue that resolving some of these challenges alone will be inadequate to attract the necessary size of investment. A comprehensive approach addressing all issues is required to restore investors’ confidence in the local oil and gas industry. The passage of the Petroleum Industry Act (PIA) in 2021 and the ongoing development of associated regulations should address regulatory concerns, provided there is meaningful engagement with stakeholders. But much necessarily, ending oil theft and other insecurities, as well as establishing a stable and truly unified foreign exchange market, are crucial reforms that would ensure a rapid flow of investment into the oil and gas industry.
