Nigeria’s energy sector experienced a significant influx of investment in 2024, totaling $6.7 billion, as reported by the Special Adviser to the President on Energy, Olu Verheijen. This influx signals a renewed interest in Nigeria’s energy potential and a positive trajectory for the sector’s future. A substantial portion of this investment, $5.5 billion, was directed towards the oil and gas sector, primarily focusing on asset acquisitions. This strategic allocation underscores the ongoing importance of oil and gas in Nigeria’s energy landscape and the government’s commitment to attracting investment in this crucial sector.
The $5.5 billion investment in the oil and gas sector was primarily driven by several significant asset acquisitions by indigenous companies. These acquisitions represent a shift towards greater local participation and control within the sector, empowering Nigerian companies to play a more prominent role in the development and management of the country’s energy resources. This includes Renaissance Consortium’s acquisition of Shell Petroleum Development Company Limited (SPDC) for $1.3 billion, Seplat Energy Plc’s purchase of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil Corporation for $1.3 billion, Chappal Energies’ acquisition of Equinor Nigeria Energy Company for $1.2 billion and TotalEnergies EP Nigeria’s 10% interest in the SPDC joint venture licenses for $860 million, and Oando Plc’s acquisition of the Nigerian Agip Oil Company for $800 million. These acquisitions not only signify a substantial financial injection into the sector but also a strategic shift towards increased local ownership and control, potentially fostering greater efficiency and responsiveness to domestic needs.
Beyond the flurry of acquisitions, the Federal Government further incentivized investment in the oil and gas sector through targeted tax breaks for onshore and shallow water non-associated gas, as well as deep offshore oil and gas exploration and production. This strategic use of fiscal incentives aims to attract further investment in key areas, promoting both increased production and the development of Nigeria’s vast gas reserves. The resulting increase in indigenous ownership is expected to invigorate onshore fields, promoting increased production and contributing to a more stable and prosperous energy future for Nigeria.
A notable outcome of this investment drive is the $5 billion investment by SNEPCO in the Bonga North Deep Offshore Project, marking the first greenfield deep offshore project in over a decade. This project, with an estimated production capacity of 110,000 barrels per day, signifies renewed confidence in Nigeria’s deepwater potential and promises to significantly boost the nation’s oil production. In the gas sector, TotalEnergies and the Nigerian National Petroleum Company Limited (NNPCL) invested $550 million in the Ubeta non-associated gas project, demonstrating a growing focus on harnessing Nigeria’s abundant gas resources. This project aligns with the government’s goal of promoting gas utilization for both domestic consumption and export, contributing to economic growth and supporting the global energy transition.
The Federal Government has set ambitious targets for future investment in the oil and gas sectors, aiming to attract $30 billion in oil and $5 billion in gas investments by 2029. These targets reflect the government’s commitment to maximizing the potential of Nigeria’s vast energy resources and leveraging them for sustained economic growth. The focus on gas investments aligns with the global trend toward cleaner energy sources and positions Nigeria to play a significant role in the global energy transition. The government’s optimistic outlook suggests a belief that the recent wave of investments is a harbinger of sustained growth in the sector.
Beyond the oil and gas sector, the Federal Government launched the new Presidential Metering Initiative to address challenges in the power sector. The initiative seeks to improve the availability, affordability, and reliability of on-grid power, critical factors for driving economic development and improving the quality of life for Nigerians. This initiative, alongside other interventions in the power sector, received $400 million in funding. An additional $700 million was allocated to the Clean Mobility and Cooking program, showcasing the government’s commitment to promoting cleaner energy solutions and addressing the health and environmental challenges associated with traditional cooking methods. These investments highlight the government’s multi-pronged approach to energy development, addressing both traditional energy sources and the growing need for sustainable and cleaner alternatives.
