NNPC Upstream Investment Management Services recently announced plans to invest $18 billion in Nigeria’s oil and gas sector between now and next year.
This investment was discussed by Mr. Bala Wunti, the Chief Upstream Investment Officer of NUIMS, during a panel session at the 22nd edition of the NOG Energy Week in Abuja.
The panel session focused on the theme “The investors’ perspective: Assessing the attractiveness of Nigeria’s energy sector.”
During the session, Wunti emphasized the importance of broadening local content and developing capacity in the upstream industry, highlighting recent and upcoming investment opportunities.
For instance, Total, in partnership with NNPC, launched a tender for a project that is expected to attract Foreign Direct Investment. SNEPCO is also set to make a Final Investment Decision on the Bonga project, which will bring in an estimated $4 billion in investment. Additionally, the Preowei project by Total is being restarted, with an expected investment of around $2 billion.
The panel discussion revolved around the existing barriers to investing in Nigeria’s energy market and how to strengthen investor confidence. The topics also included the fiscal policies required to attract investment beyond hydrocarbons and the enablers necessary for attracting investment in the upstream sector.
Notable participants in the panel session were Roger Brown, the Chief Executive Officer of Seplat; Elohor Aiboni, the Managing Director of Shell Nigeria Exploration and Production Company Ltd; Emeka Okwuosa, the Chief Executive Officer of Oilserve Limited; and Olumide Ofunfowora, the Founding Partner of Argentil Capital Partners.
In other energy-related news, the Federal Government of Nigeria has expressed its willingness to partner with states for power generation following the decentralization of electricity.
The Nigerian Electricity Regulatory Commission (NERC) will provide the regulatory framework for states to operate in the power sector. The Fifth Alteration Bill No. 33 (Devolution of Powers) grants states the authority to generate, transmit, and distribute electricity within areas covered by the national grid.
Dafe Akpeneye, the Commissioner for Legal, Licensing, and Compliance at NERC, highlighted the commission’s commitment to partnering with any state or entity that shares the goal of ensuring a stable power supply.
According to Musiliu Oseni, the Vice-Chairman/Commissioner for Market, Competition & Rates at NERC, the new Electricity Act has the potential to transform the entire electricity supply industry. Oseni emphasized the importance of collaborative efforts, load growth, quality improvements, customer satisfaction, and improving liquidity to support the sector’s growth and success.
However, NERC also noted that the available electricity capacity in Nigeria is currently underutilized, with only 53% of the capacity being utilized due to various challenges such as gas supply, transmission and distribution constraints, and commercial issues.
In related news, the House of Representatives in Nigeria has mandated its Committee on Power to invite the General Manager/Chief Executive Officer of the Benin Electricity Distribution Company (BEDC) to explain the prolonged electricity blackout in Irele, Okitipupa, Ese-Odo, and Ilaje local government areas (LGAs) of Ondo State.
The House also resolved to invite the Transmission Company of Nigeria (TCN) to address the disconnection of these LGAs from the national grid. The aim is to investigate the causes of the long-standing blackout and work toward resolving any disputes, with the committee required to report back within eight weeks.
The House expressed concern over the adverse effects of the blackout on the social and economic activities of citizens in the affected areas. Many communities have been without electricity since 2014, leading to the closure of small and medium enterprises and increased costs for alternative power supply.
The lack of electricity has also impacted job opportunities and foreign exchange earnings in the region. The House emphasized the need for the government and relevant stakeholders to address this issue promptly to improve the quality of life for the affected communities.
These developments in Nigeria’s energy sector demonstrate both the significant investment potential in the oil and gas industry and the ongoing efforts to improve the power generation and distribution infrastructure throughout the country.