Tony Attah, the former managing director of the Nigeria Liquefied Natural Gas (NLNG) Ltd has issued a stark warning about the country’s declining prominence in the African energy market.
In an event organised by the Petroleum Club on Wednesday evening, Attah said that the nation’s once-dominant position is being challenged by other African countries and global trends.
“With the emergence of other resource-rich African countries like Angola, Mozambique, and more recently Senegal and Mauritania, we are no longer the darling bride of the market, against the backdrop of these emerging energy hubs offering better fiscals and simpler business environment to attract more investors,” Attah said at the evening event.
He added, “The dollar will always go where it will find the best value! As long as our oil and gas reserves remain in the ground, they will continue to face the fast-paced risk and threat, occasioned by the clarion call to move away from fossil fuels and by implication no added value to our economy”.
He noted that the true value of Nigeria’s Oil and Gas is only about what Nigeria can produce and put to use locally or for export to earn the much-needed revenue, including foreign exchange, to rescue our economy.
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Endemic oil theft and frequent sabotage of pipelines have been one of President Bola Tinubu’s biggest challenges in recent years, dampening government finances and limiting the country’s output and exports.
FDI in the sector fell to less than half a billion dollars in the first half of 2023, with the full-year figure unlikely to match a peak of $22.5 billion in 2019.
The 2010s witnessed a period of significant FDI from international companies eager to tap into the country’s vast oil and gas reserves as the future for Nigeria’s nascent indigenous upstream oil and gas industry looked bright, almost dazzlingly so.
In 2014, Nigeria attracted the largest amount of FDI of any African country, with inflows exceeding $22.1 billion. This influx of capital fueled major projects, including deepwater exploration and development of new oil fields.
In August 2014 “the perfect storm of collapsing oil prices” arrived, said Carlos Hardenberg, lead portfolio manager of Templeton Emerging Markets Investment Trust. The naira fell, investors fled and Niger Delta militants who wanted a greater share of the country’s energy wealth struck.
Little has changed since then.
The country’s appeal had been tarnished by security problems that have only worsened since.
