Nigeria’s Oil Industry Records Zero Foreign Investment In Q2, 2021

The National Bureau of Statistics(NBS) has disclosed zero Foreign Investment in the country’s oil and gas sector for the first time in Q2 2021, amid the global push for cleaner energy.

The NBS in its ‘Nigeria Capital Importation Q2’ report stated that the Federal Government failed to convince IOCs to invest in the oil and gas sector between January and June.

The report showed that the country had no foreign capital importation into the sector in the period under review.

The report comes on the heels of various divestment efforts by International Oil Companies into cleaner energies and to neighbouring countries as a result of commitment to the United Nations agenda that seeks to cut emissions from fossil fuels to zero by 2050.

The net-zero race has since seen IOCs, including most indigenous oil companies, rebrand from full-fledged oil and gas to energy firms.

As a result of low investments, Nigeria’s crude oil production has dropped drastically, especially since COVID 19, reaching about 900, 000 barrels per day around September last year before climbing to about 1.3mb/d in September, according to statistics from the Organization for the Petroleum Exporting Countries.

The NBS said Nigeria recorded $1.03bn capital importation in Q2 2023, 32.9 per cent lower than the $1.54bn recorded in the corresponding period of 2022.

It was slightly lower than the $1.13bn recorded in the previous quarter.

The agency indicated that most of the foreign inflows in Q2 came into the country as loans, accounting for 74.9 per cent of the total capital import.

About $86.03 Million foreign direct investment into the country accounted for 8.4 per cent, while foreign portfolio investment with $106.85m accounted for 10.4 per cent of the country’s foreign inflows.

The oil and gas sector has been the government’s major source of revenue, according to over 90 per cent of the country’s foreign exchange earnings.

However, the manufacturing sector attracted the most foreign inflows in Q2 with $605.04m, followed by banking with $194.58m, and the stock market with $68.63m.

Joining the list of IOCs that have sold their oil and gas assets in Nigeria, recently, Italian company Eni also agreed to sell its subsidiary Nigerian Agip Oil Company to Oando.

According to a British research and consulting firm, Wood Mackenzie, divestment by international oil firms in Nigeria, amounted to £871m since 2020.