Nigeria Struggles to Attract Investment as Oil Majors Look Elsewhere

Nigeria, once the coveted darling of many oil investment ventures, finds itself facing formidable competition from Namibia and Ivory Coast, emerging as the premier destinations for oil majors in 2024, as per BusinessDay’s insights.

These countries have garnered significant attention due to recent oil discoveries, diverting interest away from Nigeria, traditionally considered Africa’s oil industry hub.

Reports from upstreamonline, a global intelligence publication, indicate that Shell is in negotiations to acquire three promising deepwater blocks in Ivory Coast, reflecting the escalating interest in a country that is rapidly becoming Africa’s most sought-after upstream prospect.

Ivory Coast’s oil exploration and production landscape witnessed a significant shift after Italy’s Eni made a substantial oil and gas discovery in September 2021, known as the Baleine field.

Eni’s recent discovery in the Ivory Coast’s offshore Block CI-205, referred to as the Calao discovery, holds an estimated 1.5 billion barrels of oil equivalent. This landmark find has spurred interest and investment in the region, with Eni planning a $10 billion investment in the field’s development, aiming to increase production from 30,000 bpd to 200,000 bpd by 2027.

Ivory Coast’s modern approach to oil production includes prioritizing decarbonization technologies and integrating natural gas within its transition strategy. Eni aims to make the Baleine field Africa’s first net-zero emissions project, with plans to produce 200 million cubic feet of natural gas per year by 2027.

Meanwhile, Namibia has emerged as a new frontier for oil exploration, with several major discoveries attracting foreign investment. TotalEnergies, Shell Plc, and Galp Energia SGPS SA have made significant finds off Namibia’s southwest coast, transforming the country into a hotspot for exploration. While no fields have been approved for development yet, Namibia’s potential has drawn comparisons to Guyana’s oil boom.

TotalEnergies, in particular, aims to approve its first oil development in Namibia at the Venus discovery by the end of next year. This shift in focus by oil majors underscores the importance of stability and a transparent regulatory framework in attracting investment in Africa’s oil and gas sector.

Despite Nigeria’s vast reserves, long-standing issues and regulatory challenges have deterred some companies from investing. This is evidenced by a string of departures by global oil and gas players, opting for more favorable operating environments elsewhere.

French oil major TotalEnergies’ decision to invest $600 million in the Republic of Congo, rather than Nigeria, further highlights the challenges facing Nigeria’s oil industry. This move underscores the need for Nigeria to address regulatory uncertainties and enhance its investment climate to remain competitive in the global oil market.