Nigeria attracted only 4% of energy investment in Africa in past decade — SA, Verheijen
…As Tinubu issues directives to ensure reform
Special Adviser to President Tinubu, Mrs Olu Verheijen, says Nigeria attracted only four percent of all energy investment in Africa in the past decade.
This was disclosed in an interview where she highlighted President Tinubu’s radical reforms in the energy sector have offset the major drawbacks of the oil and gas industry over the years.
She noted that the energy sector had a lot of drawbacks in the past because of varying factors ranging from pipe vandalisation to crude oil theft which has hampered substantial progress as it relates to energy.
According to her, before Tinubu was sworn in, Nigeria recorded a slump from producing over 2 million barrels per day to producing 900,000 barrels per day. Crude theft, according to her, was merely one reason for the slump in production pointing to shut ins as another reason.
The shut ins were needed precautions to ensure the integrity of the transportation or evacuation infrastructure needed to be secure, in order to produce a safe and reliable infrastructure.
According to her, a trunk line in Delta, TNP yielded more dividend than the trunk lines in the East as “uptime of the infrastructure was quite high, and most barrels that were injected into those pipelines make it into the terminals,” which called for immediate intervention from the Presidency.
The Presidency, she said, teamed up with the NSA, two Ministers of Defense who came onboard with NNPC to replicate the success recorded in the Delta region and see how it would work in the East and Central zones, noting that “We have seen improvements there in terms of the availability of crude in that pipeline, and it has gone up.”
Another issue she noted was that Nigeria is not attracting investors as it has only been able to generate $300,000 in the last 10 years, while Ghana has generated $12billion in the same span of time which is not ideal as Nigeria has the highest resource in Africa.
The Special Adviser stated that the team combed through this issue and noticed two prevailing reasons for lack of investors: the production cost being on the high side as compared to other countries, and the contract timeline.
In her words: “If you look at Saudi Arabia, they produce oil at less than $5 a barrel. On average, some of our producers here go over $40. It doesn’t make us attractive.”
Regarding the contract timeline, she said it often takes about 38 months to put a contract in place in the oil and gas sector in Nigeria, whereas, some countries’ contracts span between 3 to 6 months for similar projects. “The longer timeframe here drives up cost of production also,” she said.
According to her, the President has issued directives to ensure a reduction in contract timelines, which is a testament to President Tinubu’s dedication to reforming the oil and gas sector.
