The Nigeria energy sector received a significant boost in 2024, with a total of $ 6.7 billion in investments, according to the “reproach of the energy sector of the presidency in 2024”, a Full report published by the Office of the Special Advisor of the President on Energy.
The report pointed out that on total investment, $ 5.5 billion was channeled in the oil and gas sector, $ 400 million was allocated to the presidential measurement initiative (PMI), and 700 million Dollars have been directed to clean and clean mobility and cooking projects.
The oil and gas sector dominates
The oil and gas sector appeared as the main beneficiary, obtaining $ 5 billion from the total investment through the offshore project of Shell Nigeria Exploration and the production company (SNEPCO) North Deep Offshore. This marks the first offshore project of Greenfield Deep in more than a decade, with the potential to increase the Nigeria oil production capacity by around 110,000 barrels per day.
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The report also listed five major acquisitions in the sector:
- The acquisition by Shell Petroleum Development Company (SPDC) by the Shell Petroleum Development Company (SPDC) consortium renaissance: an agreement of $ 1.3 billion.
- The acquisition of Seplat Energy PLC of Mobil Producing Nigeria Unlimited (MPNU): a transaction of $ 1.3 billion with Exxonmobil Corporation.
- The purchase by Chappal Energies of Equinor Nigeria Energy Company (ENEC): an agreement of $ 1.2 billion with the ASA of Norway.
- The acquisition by Chappal Energies of the participation of 10% totaling in the SPDC JV licenses: valued at 860 million dollars.
- The acquisition by Oando PLC of Nigerian Agip Oil Company (NAOC): an agreement of $ 800 million.
These transactions highlight the renewed confidence of investors in the Nigeria oil and gas sector.
Presidential measurement initiative and clean energy investments
In addition to oil and gas, the federal government allocated $ 400 million to the presidential counting initiative, which aims to improve the availability, affordability and reliability of energy on the network. Oli Verheijen, the Special Advisor of the President on Energy, underlined the administration’s commitment to energy reform.
“We have launched, among other interventions, the new presidential measurement initiative (PMI). Our goal, working with all stakeholders in the industry in the public and private sectors, is to improve the availability, affordability and reliability of power on the network, ”said Verheijen.
Another $ 700 million was addressed to clean energy initiatives, focusing on clean mobility and clean cooking, aligning the long -term energy transition goals in Nigeria.
The report noted that Nigeria had made a benchmark by receiving upstream investments and the highest upstream gas in Africa in 2024, representing four of the five major investments on the continent.
“In the oil and gas sector, 2024 was a year of daring reforms that have improved the competitiveness of Nigeria investments,” said the report.
Nigeria missed LNG opportunities
Nigeria, despite its vast natural gas reserves, has not fully capitalized on its liquefied natural gas potential (LNG)A situation that has considerably undermined its sources of oil and gas income. Energy experts are increasingly criticizing the government’s inability to meet the Nigeria LNG Limited (NLNG) requirement for 3.5 billion standard gas cubic feet per day.
Currently, the use of Nigeria capacities is 65% lamentable, a figure which should fall more to 44% with the commissioning of the NLNG Train 7 project in 2025.
The expansion of train 7 should increase the installation capacity of Nigeria LNG from 22 million tonnes per year (MTA) at 30 MTANow may become a monument to missed opportunities. Since October 2022, Nigeria has worked under a state of force majeure, a direct consequence of its chronic incapacity to comply with the gas supply obligations.
Energy analysts attribute the failures of Nigeria to a lack of foresight, poor political frameworks and chronic mismanagement of its petroleum and gas sector. Kelvin Emmanuel, energy analyst, noted the government’s failure to develop a tax framework to attract international investments, in particular for deep water fields in the context of production sharing contract models (PSC).
“The government’s inability to provide a budgetary framework for the deep water fields which fall under the model of production sharing contract have limited investments at the institutional level of international oil companies (IOC) interested in participating in the global rise in power gas as a transitional fuel, “said Emmanuel.
Emmanuel has contrasted the stagnation of Nigeria with global trends, stressing how nations and the United States have jumped on the LNG market. In 2011, the United States and Russia were almost tied, contributing about 18 to 19% of worldwide production. However, by 2025, the United States should commander 26% share of global LNG production, while Russia will fall at 14%, hampered by tensions and geopolitical sanctions.
The domination of the United States in the world oil and gas market is still reinforced by its massive natural gas production capacity of 79.8 billion standard cubic feet per day, derived from its 13.3 million barrels of oil oil raw. Meanwhile, Nigeria finds it difficult to comply with its national and international obligations, not competitively positioning itself in the global energy transition.
The impact of global oil price volatility
Emmanuel has also raised concerns about the global oil price dynamics. The United States, under The policies initiated by former President Donald Trump are planning to add 3 million barrels of crude oil per day to the global markets, a decision likely to Press prices more.
This evolution presents a significant risk for Nigeria, which founded its 2025 budget on an oil price reference of $ 75 per barrel. Emmanuel warned that the government could be forced to present an additional T2 budget if the oil prices fall below this threshold.
“Russia has practically lost because most of its LNG expeditions are sold to an additional bonus by third parties to avoid sanctions,” said Emmanuel. “The oil prices go back definitively and the president must revise his reference OSP of $ 75 for 2025 or prepare for a budget deficit.”
A call to action
Emmanuel said that Nigeria must focus on gas as a transitional fuel, aligning global trends and the G-7 press release stressing the importance of natural gas in the energy transition.
“The government must wake up from its sleep and finally join the world race to transform Nigeria into a gas nation,” he urged.
The NLNG Train 7 project, formerly considered a change of game, is now likely to become a symbol of Nigeria’s inability to take advantage of its richness of natural resources.
However, the report provided that the country could attract more than $ 5 billion in gas investments by 2029, improving the availability of gas for export and support for the global energy transition. In addition, he plans that Nigeria draws from more than $ 30 billion in deep offshore investments during the same period.
“We will continue to commit, collaborate and communicate with stakeholders in the energy sector and welcome your comments and comments,” said Verheijen.
