"Nigeria misses windfall despite highest global upstream investments in 5 years"

" Nigeria misses windfall despite highest global upstream investments in 5 years \r\n\r\nNigeria missed a golden opportunity to capitalise on its oil revenue as international oil companies (IOCs) sealed deals worth $64 billion in the first quarter of 2024, the highest in the last five years.\r\n\r\nThis development represents one of the major challenges inherited by President Bola Tinubu with Nigeria\u2019s oil and gas industry, the source of much of the country\u2019s foreign receipts and more than half of government revenues, is in bad shape\r\n\r\nAccording to a publication by Rystad Energy, a global intelligence group, the global upstream industry could see another $150 billion of merger and acquisition (M&A) deals in the remainder of 2024. With global M&A deal value, it has already crossed the $64 billion mark this year.\r\n\r\n\u201cDemand for gas-producing resources is high, representing about 66 percent of total resources bought and sold in the first quarter of 2024,\u201d Rystad Energy said.\r\n\r\nDespite having more than half of its oil and gas blocs idle, Africa\u2019s largest oil producer, Nigeria, finds itself on the sidelines as Rystad Energy said Africa saw notable activity, with transactions surpassing $5.3 billion, fueled by oil and gas upstream majors.\r\n\r\n\u201cAfrica witnessed oil and gas majors\u2019 appetite for exploration opportunities, with TotalEnergies acquiring a 33 percent operated stake in Block 3B\/4B offshore South Africa and an additional interest in two blocks offshore Namibia,\u201d the intelligence publication said.\r\n\r\nExperts said the complexities surrounding abandonment, decommissioning and the surge in environmental issues, legal crises, labour conflicts, vandalism, capital and technical challenges for Nigerian companies are upsetting investors.\r\n\r\n\u201cThe current status where the sellers have signalled a full intention to leave, whereas the buyers are yet to take over the operations of the assets effectively is detrimental to the sector and the country,\u201d Abdulrazaq Isa, chairman of Independent Petroleum Producers Group, said on Tuesday at this year\u2019s Nigerian International Energy Summit in Abuja.\r\n\r\n\u201cThe industry will be most appreciative of the prompt intervention of the government to untangle all issues and diligently fast-track all relevant approvals,\u201d he said.\r\n\r\nSeplat Energy announced an agreement in February 2022 for the acquisition of ExxonMobil\u2019s entire share in its shallow water business \u2014 Mobil Producing Nigeria Unlimited (MPNU).\r\n\r\nBut more than two years later, the government has not approved the deal, as such transactions are often subject to ministerial consents and other regulatory greenlights.\r\n\r\nAlso, Oando, in September 2023, disclosed that it had signed a deal to acquire 100 percent of Eni\u2019s shares in Nigerian Agip Oil Company Limited (NAOC Ltd).\r\n\r\nDays after Oando announced the deal, the Nigerian National Petroleum Company (NNPC) Limited said it could lead to legal issues, adding that Eni and Oando overlooked certain terms in their joint operating agreement.\r\n\r\nNorwegian oil company Equinor announced late last November that it had sold its Nigerian entity to a little-known local company Chappal Energies, the end of Equinor\u2019s three-decade association with Africa\u2019s largest oil producer.\r\n\r\n\u201cGlobal investors always require an exit option. When this appears muddied, it is another headwind for new investors to consider,\u201d Kunle Agboola, an investment risk analyst operating in sub-Saharan Africa, told Businessday.\r\n\r\n\u201cThe most attractive oil and gas basins have great deal flow but if it takes three years to exit, this is a significant downside to investment,\u201d he added.\r\n\r\nFindings by BusinessDay showed section 95 subsection 10 of the Petroleum Industry Act states that \u201cwhere the application for an assignment or a transfer of a petroleum prospecting licence or petroleum mining lease is refused, the commission shall inform the applicant of the reasons for the refusal and may give reasonable time within which further representations may be made by the applicant or by third parties in respect of the application\u201d.\r\n\r\n\u201cBy fighting hard to scuttle IOCs\u2019 quest to leave the onshore and shallow waters where their operations are threatened by oil thieves, whom the government and the regulators have failed to curb, the government is proving their case that Nigeria is unsafe for investments,\u201d Agboola said.\r\n\r\nAisha Mohammed, an energy analyst at the Lagos-based Center for Development Studies, argued that it was in Nigeria\u2019s interest to have a thriving energy sector, particularly at a time when investors prefer other destinations.\r\n\r\n\u201cFor example, Nigeria is the only major oil producer where the IOCs are leaving despite the threat of energy transition. Globally, underinvestment into oil projects is challenging, but it is worse in Nigeria,\u201d Mohammed said.\r\n\r\nExxonMobil is investing millions of dollars in Guyana where the oil they discovered in just one field in 2015 is more than all the oil they have found in Nigeria since the 1960s. Shell made so much more in 2023, it gifted $23 billion of the profits to shareholders as dividends and these were profits largely made outside Nigeria."

"Nigeria misses windfall despite highest global upstream investments in 5 years"

MLS: Lionel Messi wins maiden Player of the Month AwardAMP

Man City’s Foden and Shaw win FWA Footballer of the Year awardsAMP

I wanted Harry Kane at Man United – Ten HagAMP