Nigeria is facing stiff competition for investment in its oil sector, executives from major international oil companies said during a conference Wednesday in the nation’s capital city of Abuja.
Nigeria is Africa’s largest oil producer, but regulatory uncertainty, insecurity resulting from oil theft and increased competition for investment from emergent oil producers in Africa and elsewhere have seen the industry in Nigeria stagnate in recent years.
Nigeria–one of Africa’s fastest-growing economies–is highly dependent on export revenues from its oil industry.
“There is a significant amount of competition for capital that’s linked to the African continent and other places,” said Mark Ward, head of Exxon Mobil Corp.’s (XOM) Nigerian unit.
The industry highlighted uncertainty surrounding the so-called Petroleum Industry Bill, or PIB, a landmark piece of legislation intended to overhaul Nigeria’s energy sector, as a particular hurdle to investment.
“It’s important that it’s calibrated properly,” Exxon’s Mr. Ward said.
Meanwhile, Mutiu Sunmonu, head of Royal Dutch Shell PLC’s (RDSA, RDSB) Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Ltd., said uncertainty over the PIB was preventing the company from making significant offshore, deepwater investments.
“In Shell, we have two big projects we would like to do as soon as we are sure that the environment and the conditions are right,” Mr. Sunmonu said. “We are all waiting for the almighty PIB to be able to make those decisions,” he said.
