Nigeria has been ranked as the foremost destination for upstream oil and gas investments in Sub-Saharan Africa (SSA) in 2024.
A research from market intelligence firm, Wood Mackenzie, indicated during the year, Nigeria accounted for three out of four Final Investment Decisions (FIDs) announced by global oil and gas majors, totaling $13.5 billion.
The firm reported that the FIDs announced within the Nigerian market in 2024 included Shell’s $122 million investment in the Iseni Gas Project, TotalEnergies’ $566 million commitment to the Ubeta Gas Project and Shell’s approval of the Bonga North Tranche 1 project, reflecting the country’s ongoing efforts to unlock its hydrocarbon potential through investor-friendly policies and strategic global partnerships.
An analysis of Nigeria’s developmental drives in her rich hydrocarbon resources endowments that encouraged foreign investors to stake their funds in oil and gas industry during the year under review showed that the Federal Government introduced several initiatives to create a conducive environment for oil and gas investors, including new tax incentives aimed at attracting up to $10 billion in natural gas investments – offering tax relief for gas investors, reducing corporate income tax and extending capital allowance benefits – for deepwater gas projects.
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Other policies include the Presidential Directive on Local Content Compliance Requirements, 2024 to address reduction in oil and gas investments caused by high operating costs compared to global markets. The Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024 reduces time spent to award contracts for oil and gas projects.
Apart from the policy directives, Nigeria also launched its 2024 oil and gas licensing round, offering 19 blocks for exploration, demonstrating its commitment to continued collaboration with local, regional and international partners. With this momentum, analysts believe that further FIDs are anticipated in the country, including TotalEnergies’ expected $750 million commitment to the Ima Shallow Gas Project in 2025.
Reacting to the developments in Nigeria’s hydrocarbon resources industry, the African Energy Chamber (AEC), as a leading group in Africa’s energy sector, has congratulated the Nigerian government for the FIDs feat, particularly for its proactive legislations aimed at attracting foreign investments, streamlining project implementation and reducing bottlenecks.
The Chamber expressed optimism that with 45% of the Nigerian population lacking access to electricity and affordable and reliable energy, the FIDs and policies are a right step in driving the country’s universal energy access and socioeconomic development targets.
In his remarks, Executive Chairman of the AEC, NJ Ayuk, said: “Nigeria continues to set a benchmark for investor-friendly policies, leveraging its hydrocarbon potential and government initiatives to drive sustainable development.
“The Chamber commends President Tinubu, Special Adviser to the President on Energy, Olu Arowolo Verheijen, and Nigerian energy stakeholders for fostering an environment that attracts global investments, contributing to energy poverty eradication, sustainable development and global energy market stability”, the industry leader added.
