April 25, (THEWILL) – Nigeria’s total annual upstream capital expenditure decreased by 74 percent from $27 billion in 2014 to less than $6 billion in 2022, according to Oilprice.com.
The leading energy news site revealed also that Nigeria’s yearly capital expenditure in the upstream arm of the oil sector decreased by over 70% within the nearly eight years of Muhammadu Buhari-led government.
The energy news platform said competition from regional peers contributed to the decrease in the proportion of the overall upstream investment attracted by Nigeria
“The oil and gas production in Nigeria is being severely impacted by the Western ESG (Environmental, Social and Government) strategies that are forcing IOCs to reconsider their upstream and downstream operations worldwide, resulting in major reshuffling and divestments of assets.
The report stated that Nigeria, one of OPEC’s leading oil producers, has already seen $21 billion worth of assets divested, putting its future in jeopardy.
However, the Nigerian National Petroleum Company Limited (NNPCL) maintains that the enactment of the Petroleum Industry Act (PIA) has led to a growth of inflow of Foreign Direct Invest within its short period of existence.
The NNPCL at the Nigeria International Energy Summit (NIES) held in Abuja recently, disclosed that the Act has assisted in the growth of inflow of Foreign Direct Investment (FDI) from a paltry $775 million in 2018 to $4 billion in 2022.
The Chief Upstream Investment Officer, (Nigerian Upstream Investment Services Limited), NUIMS, Bala Wunti, while speaking at the event, stated that despite the challenges, the NNPC unit was targeting $10 per barrel production cost in the near term.
“So also in Nigeria, we’ve seen a new trend in the movement of money. This went down to as low as $775 million in 2018.
“But with the PIA and all the reforms that are going on, we saw it beginning to gradually increase to $3.8 billion in 2021 and last year, we saw it hovering around $4 billion,” Wunti said.
In contrast to Western NGO’s strategies, NGOs in Nigeria, such as “We, the People,” are calling for a government moratorium to prevent further divestments in the Niger Delta.
The NGO is concerned that if oil companies are allowed to divest without cleaning up the entire Niger Delta region, the environmental issues in the area will never be addressed.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
