Because of this, over 20 companies have closed up shop and moved their investments elsewhere between 2020 and 2024. This shift hasn't just changed the business environment; it's also led to significant job losses, making the youth unemployment crisis in Nigeria even worse. On a brighter note, the Nigerian National Petroleum Company Limited and several International Oil Companies, some of which are in Joint Ventures with them, have provided a bit of optimism by positioning Nigeria as Africa’s top choice for upstream investment in 2024.
According to a recent report from market intelligence firm Wood Mackenzie, Nigeria is set to be the leading destination for upstream oil and gas investment in Africa this year. The country is responsible for three out of four Final Investment Decisions (FIDs) worth a total of $13.5 billion made by major global oil and gas companies in 2024.
Among the FIDs in Nigeria are Shell’s $122 million investment in the Iseni Gas Project, TotalEnergies’ $566 million commitment to the Ubeta Gas Project, and Shell’s green light for the Bonga North Tranche 1 project, which is estimated to be a $5 billion investment.
Iseni Gas Project
In February 2024, Shell Petroleum Development Company of Nigeria (SPDC) and its joint venture partners decided to kick off the development of the Iseni gas field in Nigeria, aimed at supplying the Dangote Fertiliser and Petrochemical Plant. The partners in this venture include the Nigerian National Petroleum Company (NNPC) Limited, TotalEnergies EP Nigeria, and Nigerian Agip Oil (NAOC), with SPDC taking the lead as the operator. They plan to build a dedicated gas facility that will deliver 100 million standard cubic feet of gas daily to the Dangote plant for a decade.
SPDC's Managing Director, Osagie Okunbor, highlighted that this final investment decision (FID) is a significant milestone in supporting the Nigerian government's 'Decade of Gas' initiative.
Okunbor mentioned, “This investment decision is crucial for advancing the development of the gas-rich Iseni field, part of the Okpokunou Cluster in Oil Mining Lease 35, located in Sagbama Local Government Area of Bayelsa State.”
He added that the project will enhance gas supply to the local market and play a role in boosting economic growth. The Dangote Fertiliser and Petrochemical Plant, with a whopping $2.5 billion investment, is the largest urea complex in Africa, capable of producing three million tonnes annually, which covers 65 percent of Nigeria's fertiliser needs. Additionally, the plant serves all major markets in the region.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, expressed his enthusiasm, stating, “I am extremely excited with SPDC, NNPCL, TotalEnergies, NAOC who worked assiduously for the realisation of the FID on the Iseni project that is capable of producing the equivalent of 400MW of energy, which will be delivered into the domestic market when construction is completed.
“This is a significant milestone in our quest to achieve our aspirations of the Decade of Gas initiative.”
Royal Dutch Shell has agreed to sell SPDC to Renaissance, a consortium of four Nigerian exploration and production companies along with an international energy group, in January 2024.
$566 million Ubeta Gas Project
The $550 million upstream gas project between NNPC Ltd and TotalEnergies kicked off in September 2024, focusing on the Ubeta field.
Olu Verheijen, the Special Adviser to the President on Energy, shared this news during the first US-Nigeria Strategic Energy Dialogue held by the U.S. State Department in Washington, DC.
The official signing of the $550 million Final Investment Decision for the Ubeta Field Development Project happened in Abuja in June 2024. The Ubeta field, discovered back in 1964, is situated northwest of Port Harcourt in Rivers State.
During the dialogue, Verheijen mentioned that once operational, the upstream gas project is expected to produce 350 million standard cubic feet of gas daily.
She also highlighted that President Bola Ahmed Tinubu's major energy reforms since June 2023 have been aimed at enhancing energy security, attracting investments, and fostering collaboration with key partners like the US government.
According to her, these reforms have made the gas-to-power value chain in Nigeria more viable.
The reforms include efforts to boost cash flow in electricity distribution through smart metering, settling outstanding debts to investors, and cutting down carbon emissions from gas production.
Verheijen noted that the President has issued five new executive orders to back these reform initiatives, which are designed to provide fiscal incentives for investment and streamline the process of finalizing and implementing contracts for gas infrastructure development and expansion. She stated that these directives could unlock up to $2.5 billion in new oil and gas investments in the country.
Geoffrey Pyatt, the U.S. Assistant Secretary of the State Department’s Bureau of Energy Resources, shared that the recent discussions were both timely and strategic.
“The first U.S.-Nigeria Strategic Energy Dialogue has laid the groundwork for enhanced energy cooperation between the U.S. and Nigeria. We’re working together to promote energy security, decarbonization, and economic growth,” he mentioned.
Bonga North deep-water project
In December 2024, Shell Nigeria Exploration and Production Company Limited (SNEPCo), part of Shell plc, revealed a final investment decision (FID) for the Bonga North deep-water project located off Nigeria's coast.
According to the company, Bonga North will connect to the Shell-operated Bonga Floating Production Storage and Offloading (FPSO) facility, where Shell holds a 55% stake. The $5 billion project includes drilling and completing 16 wells (8 for production and 8 for water injection), making upgrades to the existing Bonga Main FPSO, and installing new subsea equipment linked to the FPSO. This initiative aims to maintain oil and gas output at the Bonga site.
Bonga North is estimated to have recoverable resources exceeding 300 million barrels of oil equivalent (boe) and is projected to peak at 110,000 barrels of oil per day, with the first oil expected by the end of the decade.
“This is another significant investment, which will help us to maintain stable liquids production from our advantaged Upstream portfolio,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
Shell believes that the Bonga North project will play a key role in maintaining its top position in the Integrated Gas and Upstream sector, ensuring strong cash flow well into the next decade.
SNEPCo, which holds a 55% stake, runs the Bonga field alongside Esso Exploration and Production Nigeria Ltd. (20%), Nigerian Agip Exploration Ltd. (12.5%), and TotalEnergies Exploration and Production Nigeria Ltd. (12.5%), on behalf of the Nigerian National Petroleum Company Limited (NNPC).
Bonga is a deep-water site located in OML 118, with depths over 1,000 meters. The Bonga FPSO started production back in 2005, boasting a capacity of 225,000 barrels of oil daily. In 2023, the project celebrated its one-billionth barrel of crude oil produced. Shell noted that the investment in Bonga North is projected to deliver an internal rate of return (IRR) that exceeds the benchmark for its Upstream operations.
President Tinubu has expressed his support for Shell and its partners' announcement regarding the Final Investment Decision (FID) for the Bonga North Deep Offshore Field. This significant development marks Nigeria’s first deepwater oil project in over ten years, highlighting the positive effects of the President’s policies and reforms aimed at boosting investments in the oil and gas industry.
The Bonga North oilfield is a remarkable investment, estimated at around $5 billion, and is anticipated to produce about 350 million barrels of crude oil.
Tinubu remarked, “The Renewed Hope Agenda fundamentally focuses on attracting investments to transform the Nigerian economy and deliver prosperity to our people. We designed our policies and reforms from the start of my administration to achieve this goal. Shell and its partners’ decision to invest in Bonga North affirms the success of our efforts. We will continue to offer the necessary support to ensure their success and the realisation of Nigeria’s energy potential.”
Major Gas Sales Agreement
In October 2024, NNPC teamed up with three international oil companies—Shell Petroleum Development Company, TotalEnergies, and Eni—to ink a Gas Sales and Purchase Agreement (GSPA) for the $3.5 billion Brass Fertiliser and Petrochemical project in Bayelsa State. This deal will provide 270 million standard cubic feet of gas daily to the project, making it the largest single GSPA for any domestic gas buyer in Nigeria. The initiative is projected to bring in over $1.5 billion each year from exports of fertilizers, petrochemicals, and other gas-related products. Ekperikpe Ekpo, the Minister of State for Petroleum Resources (Gas), pointed out that this achievement showcases Nigeria’s welcoming business climate and the government's dedication to policies that favor investors.
Expert Insights
With $13.5 billion in final investment decisions (FIDs) announced in Niger in 2024, the African Energy Chamber praised the government's policy changes and recognized the country’s commitment to making things easier for global oil and gas investors.
The AEC noted that these investments highlight Nigeria’s ongoing mission to tap into its hydrocarbon potential through investor-friendly policies and strategic global collaborations.
The Chamber also applauded the Nigerian government for its forward-thinking legislation designed to attract foreign investments, streamline project execution, and eliminate obstacles.
In 2024, Nigeria rolled out several initiatives to foster a supportive environment for oil and gas investors, including new tax incentives aimed at drawing in up to $10 billion in natural gas investments—offering tax breaks for gas investors, lowering corporate income tax, and extending capital allowance benefits for deepwater gas projects.
There are some new policies in place, like the Presidential Directive on Local Content Compliance Requirements for 2024, aimed at tackling the drop in oil and gas investments due to high operating costs compared to global standards.
Another important directive is the Presidential Directive on Reducing Petroleum Sector Contracting Costs and Timelines for 2024, which aims to speed up the process of awarding contracts for oil and gas projects.
On top of these directives, Nigeria has kicked off its 2024 oil and gas licensing round, offering 19 blocks for exploration. This move shows the country’s dedication to working with local, regional, and international partners.
The AEC mentioned that with this positive momentum, more Final Investment Decisions (FIDs) are expected, including TotalEnergies’ anticipated $750 million investment in the Ima Shallow Gas Project set for 2025.
Considering that 45% of Nigerians still don’t have access to electricity and reliable energy, the Chamber believes these FIDs and policies are crucial steps toward achieving universal energy access and boosting the country’s socioeconomic development goals.
“Nigeria continues to set a benchmark for investor-friendly policies, leveraging its hydrocarbon potential and government initiatives to drive sustainable development,” said NJ Ayuk, Executive Chairman of the AEC. He also praised President Tinubu, Special Adviser on Energy Olu Arowolo Verheijen, and Nigerian energy leaders for creating a welcoming atmosphere for global investments, which helps tackle energy poverty, supports sustainable development, and stabilizes the global energy market.