Nigeria's upstream expenditure drops 77.8% to $6bn in 8yrs

CAPITAL expenditure, CapEx, into Nigeria's upstream sector, dropped by 77.8 per cent to $6 billion in 2022, from $27 billion in 2014, due mainly to regulatory uncertainty.

CapEx are funds targeted at acquiring, rehabilitating and operating plants and other infrastructure in the petroleum.

Speaking at the sidelines of the ongoing World Petroleum Congress, Calgary, Canada, Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission, NUPRC, Gbenga Komolafe, said the uncertainty discouraged investors from staking their resources in the industry.

According to the News Agency of Nigeria, NAN, Komolafe, who was represented by the Commission's Executive Commissioner, Kelechi Ofoegbu, said the development culminated in the stagnation of the nation's oil and gas industry.

He said: "This under-investment impacted negatively on the country's rig count. On average, Nigeria had seventeen (17) active oil rigs in 2019 representing one of the highest counts in the African continent as at then.

"The average rig count declined to eleven in 2020, seven in 2021, 10 in 2022, but recently grew to as high as 31 by August 2023, a positive signal of new investments trickling into the country.

"The relatively high crude oil prices may have also attributed to the increase in activities in the petroleum upstream sector."

"We also see this as a reflection of investors' acceptance of the PIA and its effective implementation by the regulator."

"The projected outlook over the next few years looks promising, and as the regulator in the oil and gas upstream sector."

"We would leverage on this opportunity by doing all that is necessary to attract more investments and revamp the Nigerian upstream sector."

He said the nation's Petroleum Industry Act, PIA, has paved the way for the sustainable development of the industry, adding that it has also brought about restructuring, transparency and accountability.