Due to fuel subsidy payments, the Nigerian National Petroleum Corporation would be unable to contribute to the Federal Accounts Allocation Committee (FAAC) in April, putting its plans in jeopardy.
Nigeria's current security problems tend to be escalating as a result of intermittent attacks by armed bandits on the country's energy infrastructure, a trend that, like Mozambique, has harmed the country's investment environment.
On Tuesday, oil rose to around $66 a barrel ahead of a meeting of the OPEC+ producer group to discuss oil production policy, amid concerns that India's coronavirus crisis could stymie a recovery in fuel demand.
Lagos would be Africa's seventh-richest economy if it were a nation, but even on its best days, it only gets 10% of the power it requires, forcing residents to rely on self-generation, often from filthy generators, to make ends meet.
Nigeria is improving its commitment to repaying cash call arrears and in reforming fiscal terms in the Petroleum Industry Bill (PIB), moves that signal the country is ripening for fresh investments.
There is uncertainty around the fate of marginal fields that investors bid for but have been unable to pay the required signature bonus as the April 21 deadline passes.
The head of Vitol Group, the world’s biggest independent oil trader, expects crude demand to come roaring back this year and next as the world emerges from the pandemic. The company also says oil will surge to as high as $75 a barrel in the third quarter of this year.
In the race to a net-zero carbon future, clean electricity is emerging as the ultimate fuel of the future, with biofuels to fly planes, and hydrogen for energy storage. However, Nigeria’s inability to profitably generate, transmit and distribute electricity may hold it back.
Nigeria, Algeria, Chad, and Iraq will be among the first countries to experience political instability as oil producers feel the effects of a transition to low carbon energy production, according to a new report from global risk consultancy Verisk Maplecroft.
In a bid to attract more investment, Nigeria is renegotiating commercial contract terms in its proposed oil reform bill in a move it hopes will keep investment flowing into a sector crucial for its economy at a time spending is being slashed.