Faith Nyasuguta
Nigeria has solidified its position as Africa’s top destination for oil and gas investments in 2024, driven by a series of high-profile Final Investment Decisions (FIDs) and strategic policy reforms.
A recent report by market intelligence firm Wood Mackenzie reveals that Nigeria accounted for three out of four FIDs made by global oil and gas majors in 2024. The total value of these decisions reached approximately $13.5 billion, underscoring the country’s growing appeal to investors.
Major Investments in Nigeria
Among the notable FIDs in Nigeria were Shell’s $122 million Iseni Gas Project, TotalEnergies’ $566 million Ubeta Gas Project, and Shell’s approval of the $13 billion Bonga North Tranche 1 project. These significant investments highlight the country’s ability to attract major players in the oil and gas sector.
The report commended Nigeria’s efforts to implement investor-friendly policies and pursue global partnerships to unlock its hydrocarbon potential. Key initiatives introduced by the Nigerian government in 2023 included tax incentives designed to attract up to $10 billion in natural gas investments.
Additionally, the government streamlined processes for awarding contracts, reducing costs and timelines, making the business environment more attractive. This progress sets the stage for a new oil licensing round in 2025, targeting the development of untapped oil blocks in collaboration with local and international partners. TotalEnergies, for instance, has already announced plans to invest $750 million in the upcoming year.
Refinery Development
Nigeria’s oil industry is also undergoing significant transformation, with a focus on addressing its long-standing dependency on imported refined products despite being Africa’s largest crude oil producer.
The launch of a new 50,000 barrels per day (bpd) refinery in Akwa Ibom State by petroleum marketers signals a major shift. Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), confirmed that this project involves collaboration with three oil companies and aims to enhance local refining capacity.
This development is part of Nigeria’s broader energy strategy, which prioritizes building new refineries, modernizing existing ones, and fostering partnerships to achieve self-sufficiency in petroleum production. Efforts to rehabilitate government-owned refineries in Warri and Port Harcourt and the promotion of modular refineries further underscore this commitment.
The Dangote Refinery
The Dangote Refinery, a key player in Nigeria’s oil sector, has emerged as a game-changer for the country’s economy. Between April and September 2024, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reported that the refinery supplied 489,500 metric tons of Automotive Gas Oil (AGO) and 29,000 metric tons of Jet A1 fuel. These supplies were distributed to key locations, including Lagos, Warri, Port Harcourt, and Calabar, significantly boosting domestic fuel availability.
Additionally, the refinery has begun exporting Premium Motor Spirit (PMS) to several African countries, including Ghana, Angola, South Africa, and Cameroon. This milestone not only strengthens regional fuel supply chains but also reduces dependency on external sources.
Efforts to enhance local energy production are further supported by partnerships between Nigerian stakeholders and international firms. Gillis-Harry announced a collaboration between PETROAN and companies such as Claridge Petroleum Company Ltd, Oasis Petrochemical Products Limited, and Afrintech.
“The deal is that we have requested them to not just import fuel for us but to set up a refinery in Nigeria, and they have agreed,” Gillis-Harry stated. While the refinery is under development, these partners will temporarily import diesel and base oil, ensuring uninterrupted supply while ramping up local production capabilities.
Nigeria’s strategic investments, policy reforms, and infrastructure developments in 2024 positioned it as a leading hub for oil and gas investments in Africa. With ongoing refinery projects, streamlined processes, and strong international partnerships, the country is well on its way to achieving energy self-sufficiency and regional dominance in the oil and gas sector.
As 2025 unfolds, Nigeria’s focus on unlocking its hydrocarbon potential and fostering innovation continues to attract global attention.
RELATED:
