Global consulting firm PricewaterhouseCoopers (PwC) is leading that charge, encouraging banks, policymakers, and private investors in South Africa to adopt a model historically used by Western oil majors—investing directly in oil-producing assets abroad to guarantee supply for domestic refining.
The recommendation was delivered by Pedro Omontuemhen during the South Africa Week in Lagos, where discussions centred on repositioning bilateral energy investments. He argued that Nigeria and South Africa possess complementary strengths across oil, gas, renewables, and infrastructure—creating fertile ground for scalable partnerships.
A Strategic Play for Energy Security
Omontuemhen’s message was straightforward: South Africa, which relies heavily on imported crude despite limited domestic reserves, can strengthen its energy security by investing in Nigeria’s oil fields. By acquiring stakes in upstream assets, South African entities could secure a steady crude supply for their refineries—mirroring the long-standing approach of international oil companies.
He pointed to companies such as ExxonMobil and TotalEnergies, which historically invested in Nigeria’s oil sector and exported crude to support refining operations in their home markets.
This strategy, he suggested, is particularly relevant now, as South Africa continues to import significant volumes of crude while exploration efforts—such as those in the Orange Basin—have yet to yield major breakthroughs comparable to neighbouring Namibia.
Nigeria Opens the Door Wider
At the same time, regulators in Nigeria are reinforcing this investment narrative. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has urged local refiners under the Crude Oil Refinery Owners Association of Nigeria (CORAN) to acquire stakes in oil blocks as a long-term solution to persistent crude supply challenges.
This aligns with Nigeria’s ongoing licensing rounds, which include 50 oil blocks spanning onshore, swamp, shallow water, and deep-water terrains. By encouraging both domestic and foreign investors to participate, regulators aim to stabilise feedstock supply while deepening participation across the petroleum value chain.
Opportunities Across the Energy Spectrum
Beyond crude oil, PwC highlighted broader collaboration opportunities between the two nations. Nigeria’s deep-water reserves offer high-value prospects for technically skilled partners, while its vast gas resources—much of which is still flared—present opportunities for monetisation.
Omontuemhen noted that harnessing these gas reserves could support South Africa’s energy transition, particularly through a strengthened liquefied natural gas value chain. He also pointed to synergies in renewables, where South Africa’s expertise in solar and wind could complement Nigeria’s abundant solar resources.
Technology transfer is another key pillar. South African innovations, including processes developed by Sasol, remain underutilised in Nigeria despite their global relevance in converting gas into higher-value products such as diesel and naphtha.
Capital Markets and Corporate Expansion
The call for integration extends to capital markets. Omontuemhen advocated dual listings to improve access to funding and deepen investor participation across both countries. He referenced the cross-border footprint of Seplat Energy, which is listed in Nigeria and London, as a model worth replicating.
He also cited a wave of recent mergers and acquisitions in Nigeria’s oil and gas sector as evidence of growing momentum. Deals involving Seplat, Renaissance, Oando Plc, and others signal that, despite global hesitations, African capital is increasingly driving investment in the region.
Bridging the Energy Gap
Underlying these discussions is a stark contrast in energy access. South Africa boasts significantly higher installed power capacity, while Nigeria—despite its larger population—continues to grapple with energy poverty. This disparity reinforces the urgency of collaborative solutions that can unlock resources, improve infrastructure, and expand generation capacity.
Regulators acknowledge that infrastructure constraints remain a major bottleneck. Pipeline limitations, storage shortages, and logistics challenges continue to hinder efficient crude delivery. As a result, the NUPRC is also encouraging long-term supply contracts between producers and refiners to improve planning and pricing stability.
A Case for African Collaboration
With global investment flows becoming more selective, speakers at the forum emphasised the importance of “South-South” cooperation—where African countries leverage their own capital, expertise, and markets to drive growth.
The consensus is that closer Nigeria–South Africa collaboration could unlock significant economic value, from job creation to industrial expansion. As policy reforms begin to take hold and private sector participation increases, stakeholders believe the foundation is being laid for a more integrated and resilient African energy landscape.
In that context, PwC’s proposal is less about short-term gains and more about reshaping how African economies secure energy—by investing in each other’s strengths and building long-term, mutually beneficial supply chains.