Financial Energy Review
…………by Ben Ndubuwa
Nigeria can achieve its oil production targets and implement ambitious development programs by focusing on deep-water oil and gas operations, according to Ronald Adams, Managing Director of Shell Nigeria Exploration and Production Company Limited (SNEPCo).
Speaking at the 9th Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) in Lagos, Adams emphasized the potential of deep-water resources in boosting Nigeria’s energy security and economic growth.
“Deep water is a compelling consideration for Nigeria if the country must meet its oil production targets and implement ambitious development programs,” Adams stated.
According to him, Nigeria’s deep-water fields hold some of the world’s most promising associated and non-associated gas reserves. These reserves, if harnessed properly, could power Nigeria’s future, support cleaner energy, and contribute to global emissions reduction efforts.
Fostering Investment Through Reforms
Adams acknowledged recent government reforms aimed at attracting investments, including three executive orders signed in February 2023. These orders introduced tax incentives, mandated local content compliance, and reduced petroleum sector contracting costs and timelines.
“These reforms should be part of a renewed strategy to attract investments through fiscal and regulatory policies that are fit-for-purpose, forward-looking, and competitive,” he said.
He stressed that for Nigeria to maximize benefits from deep-water operations, regulatory bottlenecks must be addressed through streamlined approval processes and consistent policy enforcement.
SNEPCo, which pioneered deep-water production at the Bonga field in 2005, has played a critical role in Nigeria’s offshore sector. In 2023, the Bonga field achieved a significant milestone of exporting one billion barrels. Adams also highlighted last year’s Final Investment Decision (FID) on the $5 billion Bonga North deep-water project as a testament to Shell’s commitment to Nigeria’s energy sector.
“Shell has powered progress in Nigeria, and our vision is to build on our support to help the country achieve energy security and economic development. We will continue to take innovative approaches to deep-water development, reducing costs and ensuring better and quicker returns for all stakeholders,” Adams added.
Beyond production, SNEPCo’s deep-water achievements have resulted in substantial tax and royalty payments to the government, contract awards to indigenous businesses, and social investments across Nigeria’s six geopolitical zones.
Africa’s Energy Future: The Role of the African Energy Bank
Meanwhile, Nigeria’s Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, called for stronger regional collaboration in Africa’s energy sector. He also reiterated the government’s commitment to establishing the African Energy Bank (AEB) to finance oil and gas projects and support the continent’s energy transition.
The bank, expected to launch in the first quarter of 2025, aims to have an asset base of $120 billion and will be headquartered in Nigeria. It is a partnership between Afreximbank and the African Petroleum Producers Organization.
“The African Energy Bank has the potential to revolutionize energy financing across the continent, providing funding tailored to Africa’s unique needs,” Lokpobiri stated.
He stressed that Africa’s dependency on foreign capital and policies that do not align with regional priorities must end.
“This is not just for oil-producing nations; it is for all of Africa. It represents a shift towards financial autonomy,” he added.
The minister highlighted that the AEB is expected to unlock billions in funding, accelerate infrastructure development, and secure Africa’s energy future. However, he emphasized that its success would require broad support from African nations, private investors, and regional financial institutions.
“Nigeria has taken the lead in hosting the bank, but its success will depend on collective commitment across the continent,” he said.
Technology, Local Content, and the Future of African Energy
Lokpobiri underscored the role of technology and local content in Africa’s energy transformation. He called for increased investment in research, development, and digital transformation to keep the continent competitive.
“Technology is transforming the world, and Africa must lead, not follow. Investors trust nations that prioritize accountability—good governance is good business,” he said.
The minister pointed to Nigeria’s successful divestment program, which empowered indigenous companies to take ownership of marginal oil fields. This initiative has revitalized production and created economic opportunities.
“By empowering indigenous companies, we’ve seen technical expertise and operational efficiency expand production and retain greater value within our economy,” he noted.
He encouraged African nations to unite in sharing knowledge, closing funding gaps, and harmonizing regulations to remain competitive in the global energy market.
A New Era for Nigeria’s Energy Sector
Lokpobiri described the unfolding developments as the dawn of a new era for Nigeria’s energy industry—an era characterized by leadership, self-reliance, bold investments, and sustainability.
“Nigeria is not just adapting to change—we are shaping it. The future is bright, and we invite the world to join us as we power Africa’s next frontier,” he declared.
He emphasized that Africa’s true strength lies not just in its oil, gas, and minerals but in its people.
“We are resilient. We are resourceful. We are ready. By committing to local content, sustainability, and innovation, we will lead the global energy conversation. This is our moment. Let’s seize it,” he concluded.
The conference, themed “Building Africa’s Future: Advancing Local Content and Sustainable Development in the Oil and Gas Industry,” attracted over 200 delegates and 100 exhibitors, reflecting the growing interest in Africa’s energy future.
As Nigeria continues its push for deep-water exploration and regional energy cooperation, the success of these initiatives could shape the country’s economic trajectory and position Africa as a major player in the global energy market.
