Nigeria’s Investment climate has been difficult because of inflation, currency volatility, and economic uncertainty. As a result, more than 20 businesses have closed between 2020 and 2024. Nonetheless, Nigeria became Africa’s most popular upstream investment destination in 2024, drawing $13.5 billion in FIDs from international oil and gas companies. Notable projects include the $5 billion Bonga North deep-water project from Shell, the $122 million Iseni Gas Project from Shell, and the $566 million Ubeta Gas Project from TotalEnergies. For ten years, Shell, in collaboration with NNPC, TotalEnergies, and NAOC, will run the Iseni Gas Project, which will provide the Dangote Fertiliser and Petrochemical Plant with 100 million standard cubic feet of gas per day.
At $2.5 billion, this factory supplies the sub-region and 65% of Nigeria’s fertiliser needs. The project supports Nigeria’s “Decade of Gas” campaign, which aims to increase local gas supplies and spur economic expansion. NNPC and TotalEnergies created the $566 million Ubeta Gas Project, which is expected to generate 350 million standard cubic feet of gas daily. Since 2023, President Tinubu has implemented reforms that have improved Nigeria’s investment climate, including Tax incentives and better cash flows in the distribution of power.
AEC pointed out that they helped secure $13.5 billion in FIDs.
Announced in December 2024, the $5 billion Bonga North project will link to the Bonga Floating Production Storage and Offloading (FPSO) complex. With a peak production of 110,000 barrels per day, this deep-water project is anticipated to produce 300 million barrels of oil equivalent. Long-term production stability is ensured by the 16 wells, subsea infrastructure, and FPSO upgrades involved. In October 2024, NNPC inked a $3.5 billion Gas Sales and Purchase Agreement for the Brass Fertiliser and Petrochemical project in Bayelsa State with three foreign oil companies: Shell, TotalEnergies, and Eni.
With 270 million standard cubic feet of gas per day, this deal is Nigeria’s largest domestic gas supply contract, bringing approximately $1.5 billion in Export Revenue yearly. In order to lower contracting costs, expedite project approvals, and draw in foreign investment, the Nigerian government has implemented measures. Praising these improvements, the African Energy Chamber (AEC) pointed out that they helped secure $13.5 billion in FIDs. Nigeria also opened the 2024 round of oil and gas licensing, with 19 blocks available for exploration.
Increased production of oil & gas is anticipated of the investment.
Multinational corporations significantly left Nigeria between 2020 and 2024 as a result of a confluence of economic difficulties, exchange rate fluctuations, and growing operating expenses. The Economy has been significantly impacted by these companies’ departure. According to economist Dr. Vincent Nwani, the withdrawal of multinational corporations caused Nigeria to lose almost N94 trillion in GDP over a five-year period. Reduced tax income, lost employment prospects, and diminished economic activity related to these enterprises are all included in this figure.
In contrast, significant investments have been drawn to Nigeria’s Oil and Gas Industry due to recent advances. The nation received $13.5 billion in Final Investment Decisions (FIDs) from major international oil and gas companies in 2024. These included Shell’s $5 billion Bonga North deep-water project, TotalEnergies’ $566 million Ubeta Gas Project, and Shell’s $122 million Iseni Gas Project. Increased production of oil and gas, improved energy security, and Economic Growth are all anticipated outcomes of these investments. It is yet to be fully determined how these investments would affect GDP and employment rates.
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Although the oil and gas industry makes up a sizable portion of Nigeria’s GDP, it requires a lot of cash and might not create as many job possibilities as other industries. As a result, the overall impact on employment rates can be minimal. These investments may be vulnerable to political unpredictability, unclear regulations, and environmental issues. Concerns among Investors have been raised by Nigeria’s unstable regulatory environment, which includes incidents like the government’s decision to stop Shell’s $2.4 billion sale of its onshore assets. There are also environmental dangers, especially in the Niger Delta. Ogoniland’s plans to resume oil production have angered local people and environmental groups, underscoring the continuous conflict between environmental care and economic development.