Ceo forum 2023

As investment dries up in Nigeria, Southern Africa entices investors

When it comes to investment in the oil and gas sector, Africa’s biggest oil-producing country is losing a decisive battle to other smaller oil-producing countries as Namibia and Zimbabwe made fresh major discoveries of hydrocarbons.

According to an online publication, Upstream, Shell has reportedly made another major discovery of hydrocarbons, the main components of oil and gas in the Orange Basin of Namibia.

Findings showed Shell’s Jonker-1 well made the hydrocarbon found early this year in a different geological area to its previously successful Graff and Rona wells, where it confirmed significant discoveries last year.

“This offers significant encouragement for what may yet be found in the probe’s deeper primary objective,” three informed sources told Upstream.

To bolster its search activities in the exploration hotbed of the Orange Basin, Shell reportedly spent over $2 billion to secure the services of the semi-submersible rig, called the Deepsea Bollsta, for a year, with an option to extend the services for another six months if necessary.

Industry insiders estimated the company could achieve flow rates of 2 000 to 3 000 barrels per day.

“I am proud to inform you we have commenced appraisal work on these two [discoveries],” Namibia Petroleum Commissioner Maggy Shinosaid at the Africa Energy Chamber (AEC) event in London.

Shell operates Petroleum Exploration Licence 0039, which covers blocks 2913A and 2914B, with a 45 percent working interest. QatarEnergy also has a 45 percent stake, while the State-owned National Petroleum Corporation of Namibia (Namcor) holds 10 percent.

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Apart from Namibia, Invictus Energy, an Australia-based oil, and gas company have confirmed large natural gas and oil reserves in north-east Zimbabwe.

“The company has extended the contracts of all staff, and will keep drilling to get the confirmation samples it now needs to formally declare a commercial strike,” Invictus Energy said.

The confirmation of hydrocarbons in Zimbabwe gives extra sources of energy to Zimbabwe and opens the door to massive economic growth and development through the emergence of downstream industries, new job creation and growth in export earnings and Government revenue.

Geo-Associates, Invictus Energy’s 20 percent local shareholding partner, announced last week that the identified zones contain elevated gas shows (surface gas) with saturation of up to 90 percent.

“To this end, we are extremely buoyed by the positive results from our first Mukuyu-1 well on the project and in Zimbabwe. Geo Associates, managing director, Paul Chimbodza said in a statement.

He added, “Geo Associates and its partners (Invictus and One Gas) remain indebted to our communities and stakeholders for the immense support rendered to our project and with the positive results from Mukuyu1, the company is galvanised for the hard but exciting work ahead”.

For a frontier market with the population of Nigeria, oil majors not looking in the direction of Nigeria should be a big worry for the government as it has dire implications for social welfare and economic growth.

Data from the National Bureau of Statistics showed foreign investment inflows into Nigeria’s oil and gas sector has also dropped by multiple folds.

For instance, inflows of foreign investments into the sector, which stood at $200 million in Q2 2016, crashed to $1.9 million in the corresponding period of 2022, indicating a 99 percent drop.

Wunmi Iledare, chairman of the University of Cape Coast’s Institute of Oil and Gas, said Nigeria’s oil and gas sector must do away with the rent-sharing and rent-seeking mentality in 2023.

“Most of the agencies in Nigeria are personality-driven rather than having institutional empowerment,” he said. “Using non-state actors like ex-militants to tackle the activities of pipeline vandals is creating a system that will empower mini-gods in Nigeria’s oil and gas sector,” Iledare said.