There is palpable concerns that Nigeria is facing critical challenges in meeting its set oil target as international oil companies are shifting their investment priorities,
Also, Angola, is facing similar challenges and will have to struggle to raise oil output through the middle of this decade, data and analytics company GlobalData stated on Friday.
Lack of sufficient investments and few new projects could derail Sub-Saharan Africa’s ambition to increase its crude oil production through 2025 after a difficult pandemic-hit 2020, GlobalData said in its report.
As international oil majors are reassessing their investment priorities and projects compete for less capital amid an ongoing capex discipline, Nigeria and Angola—the leading African producers in OPEC are seeing few new projects being approved.
According to GlobalData, the two countries will see falling crude oil and condensate production from this year onwards. At the same time, they also have a relatively small number of oil projects that would come on stream within 2025.
Sub-Saharan Africa has a lot of potential and could easily top Europe in terms of oil and gas output, Conor Ward, Oil and Gas Analyst at GlobalData, said, commenting on the findings.
“However, companies have been more cautious than ever over their investments. Some of the huge discoveries made over the past decade have seen significant delays with no final investment decision (FID) in sight: as is the case with Shell’s Bonga Southwest/Aparo, which was discovered over 20 years ago,” Ward said.
“Sub-Saharan Africa is seeing a shift of investment away from the more developed countries in the region, most notably Nigeria, and more towards frontier countries such as Mauritania, Senegal, Mozambique, and Uganda as the fiscal terms offered by the host countries are far more appealing and have a large untapped resource base,” Ward added.
Nigeria has to address the above-ground risks for companies if it wants to attract investment, the analyst noted.
Nigeria approved last month a new petroleum industry bill in Africa’s top oil producer and exporter, putting an end to 20 years of debates and delays.
International oil majors have not been flocking to Nigerian oil assets now that fossil fuels are even more fiercely competing for Big Oil’s capital plans as majors start shifting more funding to low-carbon energy sources.
SOURCE: orientalnewsng.com