While known as Africa’s oil and gas powerhouse — consistently a top oil and gas exporter, a longtime member of the Organization of the Petroleum Exporting Countries and a hub of oil and gas innovations and enterprise — Nigeria’s oil and gas-dependent economy took a tumble after the abrupt drop in oil and gas prices. The country also suffers from militancy in its oil-prolific Niger Delta region, delayed legislation, economic depression and currency fluctuations.
A diverse panel, made up of the movers-and-shakers of Nigerian industry, tackled many of these issues in-depth during the Nigeria Market Spotlight at Africa Oil & Power 2017 in Cape Town, with panelists Dayo Adamolekun, Senior Associate from Kusamotu & Kusamotu; Diran Fawibe, CEO of International Energy Services Limited; Dapo Abiodun, Chief Executive of Heyden Petroleum; and Akin Odumakinde, Managing Director of DeltaTek; as well as moderator Nick de Blocq, an industry expert.
The panelists wasted no time getting into the issues, quickly bringing up some of the key factors holding Nigeria back, including a lack of investment in power infrastructure, a lack of gas infrastructure, aging infrastructure, a government system considered by many to be too bureaucratic and inefficient, currency instability, militancy and a lack of funding.
“I think we need to, first of all, do an audit of the areas where we got it all wrong, for us to be able to proceed and to generate innovative ideas to address all of these areas,” said Adamolekun.
Despite the challenges, the panelists noted Nigeria has many strengths, including a strong local sector, access to plentiful oil and gas reserves, a well-developed oil industry and a power sector that was recently privatized for efficiencies. Additionally, many of the country’s policies, such as natural gas pricing, are already spot-on to move key projects forward. For example, natural gas prices in Nigeria range from $2 to $2.50, which is a promising price regime for both petrochemicals and power generation, said Odumakinde. Because of this, the government’s efforts to monetize its plentiful gas resources are really gaining momentum.
And though Nigeria is facing challenges in continuing to develop its oil and gas sector — as is most of the world in this oil price environment — the country’s economy is beginning to recover and the country continues to attract foreign investment in the oil and gas sector and power generation.
This article contributed by our content partner: Africa Oil & Power