1 March 2019

Nigeria's Oil Sector to Attract U.S.$48bn Capital Investments - Baru

Group managing director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru has disclosed that capital investment in Africa's oil and gas industry will attract about $194 billion from 2018 to 2025, out of which $48 billion would be spent in Nigeria.

He therefore called on investors to utilise the huge investment opportunities available in the upcoming capital projects within Nigeria's oil and gas industry.

Dr. Baru made this call while speaking at a panel session on the topic "Insights on Future Exploration Hotspots: Opportunities for Africa's Oil & Gas Industry" under the sub-theme "The New Frontier for Africa's Oil & Gas" at the 2019 International Petroleum Week conference which began in London, Wednesday.

Reeling out the numerous potentials of Africa's oil and gas industry, the NNPC GMD said the continent's energy outlook was looking positive amid difficult operating and economic headwinds.

He explained that over 41 billion barrels of oil and 319 trillion cubic feet of gas were yet to be discovered in sub-Saharan Africa alone, while between 2008 and 2017, exploratory success in the sub-region was at least 45 per cent.

According to him, there has been a surge in the capital expenditure (Capex) across Africa's oil and gas sector, with close to $194billion earmarked to be spent between 2018 and 2025 on 93 upcoming oil and gas fields in Africa.

"Out of this $194billion, Nigeria accounts for $48.04 billion, over 24.8 per cent of the total capex coming into upcoming projects in Africa over 2018 to 2025, with over 20 planned projects," Baru stated.

He observed that 23.8 per cent of the capex in Africa would be spent in Mozambique, 11.3 per cent in Angola while about 29.2 per cent would be spent in Tanzania, Senegal, Mauritania, Uganda, Egypt, Algeria and Kenya combined.

Baru informed that with over 14 oil producing countries, Africa currently accounts for 7.5 per cent 126.5 billion barrels of crude oil and 7.1 per cent 488 Tcf of gas, of global proven oil and gas reserves respectively.

He maintained that in terms of production, the continent accounted for 8.7 per cent (8.1 million barrels per day) of global oil production and 6.1 per cent 21.8bscfd, of global gas production, even as it consumed four million barrels of oil per day and 13.7bscfd of gas (equivalent to 4.1 per cent and 3.9 per cent of global oil and consumption respectively).

Shedding more light on investment opportunities in Nigeria, Dr. Baru observed that the NNPC's Frontier Exploration Service was currently drilling the Kolmani River-2 Well where desktop estimates revealed that about 400Bcf of gas is expected to be encountered.

He stressed that several new frontiers for exploration opportunities abound in Nigeria, even as offshore discoveries in the country have mostly been limited to between 1,000 - 1,500m of water depth. "Beyond these water depths, the new frontiers of ultra-deep waters need to be tested. And that is where we need the investors," Baru told the audience.

He stated that unless issues related to Legal and Regulatory uncertainties, lack of infrastructure, skilled manpower shortage, transparency and accountability are addressed amongst key stakeholders, the continent's Oil and Gas Industry may not achieve its full potentials.

Organised annually by the London-based Energy Institute, the IP Week is a global oil and gas platform where executives and other energy professionals discuss the big issues affecting the sector.

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