Tinubu’s first anniversary: Oil sector gets $16.6bn investment, Halliburton, others hint at returning to Nigeria – Lokpobiri

The Nigerian oil sector has received a significant boost with a $16.6 billion investment commitment from international oil companies (IOCs), indicating a renewed interest in the country’s oil and gas industry. This development is a welcome turnaround for the Nigerian oil sector, which has faced significant challenges in recent years, including a decline in investment and production.

Speaking in Abuja on Thursday while providing updates on achievements in the oil sector at the ministerial briefing marking President Bola Tinubu’s first year in office, the Minister of State Petroleum Resources, Heineken Lokpobiri, said oil giant TotalEnergies has expressed interest in Nigeria’s new oil bid round, launched at the Offshore Technology Conference (OTC) in Houston, Texas, USA. This is a significant endorsement of the government’s efforts to revamp the sector.

“Recall that recently the global CEO of Total made a statement in Kigali, Rwanda, and he said Nigeria hasn’t seen investment for 12 years, which is true. And we are already changing the narrative. I was in a meeting with him on Saturday with the president, and all the issues he raised, we are already addressing. Also to tell you that Total has also shown significant interest in the new bid rounds,” Lokpobiri said.

The Minister disclosed that other multinationals like Halliburton, Eni, and Schlumberger have also indicated their intention to return to Nigeria, following a period of divestment by some IOCs. This is a significant development, as these companies had previously pulled out of Nigeria due to unfavourable policies and inconsistency in policymaking.

“Even this morning (Thursday, May 23, 2024), I was playing host to the global CEO of Schlumberger, (one of) the biggest oil and gas service provider(s) in the world. Schlumberger among other companies like Halliburton left Nigeria, why did they leave because the policies were not favourable? They left because some people who implemented the Local Content Acts misunderstood the local content to be a substitution of the IOCs,” Lokpobiri explained.

Read more: Nigeria Looks To Its Shallow Water Oil Fields To Boost Production

Government efforts paying off

The Minister attributed the renewed interest to the government’s efforts to address the issues that led to the divestment, including inconsistency in policymaking and unfavourable policies. He noted that the government has taken steps to address these issues, including the launch of the new oil bid round, which offers a fresh opportunity for IOCs to invest in the Nigerian oil sector.

“The law was to build local capacity to play at their own level. As of today, no local drilling company can go to deep offshore to drill. It’s still within the exclusive capacity of the big oil service companies to go to deep offshore where the bulk of our production is coming from. It’s important to note that over 80 per cent of what is produced locally is produced by the IOCs. The IOCs themselves have pledged, they are not leaving Nigeria, but they are trying to live on the shore, and shallow waters, to go to the deep offshore, which is beyond our capacity at the moment,” Lokpobiri said.

“So, the point is that we have been able to rekindle the confidence, we have restored the confidence of the investing community in the oil and gas sector, and that is why Halliburton’s global CEO was here, and that was why the total global CEO was here last Saturday. And I’ve met with the global CEOs of Shell, Eni. As I speak now, the team of Eni is still waiting for me in my office. All these are to show that the policies of this government are working, we are already bringing back the investors who have enough confidence in this present administration,” he added.

The Minister also highlighted the role of the Nigerian National Petroleum Company Ltd in raising oil production from around 1.1 million to 1.7 million per day, and the efforts of the government to address infrastructure issues to increase production to 2 million to 3 million barrels per day.

“By the time we address them (infrastructure issues) within the shortest possible time, we will increase production to 2 million to 3 million,” Lokpobiri said.

The disappearance of fuel queues during the Christmas holiday period was also a notable achievement the Minister attributed to the concerted efforts of stakeholders, especially the Nigerian National Petroleum Corporation Limited (NNPCL) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Also read: FG Mulls Selling NNPC Stakes in Oil and Gas Assets, Targets $17.4 Billion

Future looking bright?

The country has seen investments committed to the tune of $5 billion (Bonga North) and $10 billion by Shell and Eni in deepwater offshore assets, as well as $1.6 billion investment commitment in oil and gas asset acquisition by Coastal Services Solutions Limited, Lokpobiri claimed.

The Minister also noted that the government’s efforts to address the issues that led to the divestment by IOCs are bearing fruit, and the sector is poised for a significant turnaround in the coming years. This is a welcome development, as the Nigerian oil sector has faced significant challenges in recent years, including a decline in investment and production.

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