The Nigerian government is targeting around $7 billion in new foreign direct investment for the oil and gas industry over the next few years, the Minister of State for Petroleum Resources has disclosed.
Speaking at the Nigeria International Energy Summit in Abuja on Tuesday, Timipre Sylva said the ambitious FDI goal is part of the administration’s strategic plans to revive and boost investment in the critical oil sector.
“With the implementation of the Petroleum Industry Act and other fiscal incentives, we are aiming to attract between $6 billion and $7 billion in foreign investments into Nigeria’s upstream, midstream and downstream oil operations,” Sylva told the energy conference.
He added that a supportive regulatory environment coupled with the recent oil market rebound has significantly improved the profitability outlook for prospective investors eyeing Nigeria’s energy industry.
International oil companies have been invited to take advantage of the conducive environment and participate in the ongoing bid rounds for offshore oil blocs as well as new oil and gas infrastructure development projects.
Nigeria, Africa’s biggest crude producer, has seen a decline in oil output and investment over the past few years due to factors such as insecurity in the restive Niger Delta, ageing infrastructure and regulatory uncertainty before the passage of the PIB.
With oil and gas still accounting for around 90% of foreign exchange earnings and a large chunk of government revenues, the Nigerian authorities are prioritizing efforts to boost exploration and drilling activities to increase crude production and reserves.
“We are targeting to increase oil production to at least 2.2 million barrels per day and reverse the worrying decline in Nigeria’s reserves-to-production ratio,” said Sylva. “The $7 billion FDI target will go a long way in achieving this objective.”Other industry experts at the Abuja summit advised that beyond increasing oil output, Nigeria also needs to make massive investments in transitioning to cleaner energy sources like natural gas and renewables.
Wale Tinubu, CEO of Nigerian independent producer Oando, stated: “Countries like Nigeria with huge gas reserves need to act fast to take advantage of the growing global shift towards gas as a transition fuel on the road to net-zero emissions.”
