Africa’s Largest Oil Producer Has Bunched Up USD 16 Bn From China – But The Best Is Still A 2023 Dream

Nigeria, Africa’s largest oil producer and biggest economy, has received a total of USD 16 Bn worth of investments from China in its oil sector. The pump, which was mostly upstream, was done through state oil firm China National Offshore Oil Corporation.

While the company’s Executive Vice President, Lu Yan Ji, revealed this recently, it urged the NNPC (Nigeria National Petroleum Corporation) to make room for more collaborations. 

‘Barrels Upon Barrels’

In a visit to the Group Managing Director of the NNPC (Mele Kyari), Ji said Nigeria was one of China’s largest investment destinations, as is evident in the billions considered in the past 14 years. He also implored the group to lend China a hand in securing more investments, as there is a need for the NNPC and CNOOC to put hands on deck to reach greater heights. 

NNPC’s General Manager for Public Affairs, Ndu Ughamadu, revealed that CNOOC produces a total of 800,000 barrels per day (BPD) worldwide The Chinese national oil corporation, according to him, has its eyes set on hitting 1.2 million barrels per day (BPD). Nigeria is obviously a good catch for the corporation, where CNOOC started business in 2005 and currently has an interest in Oil Mining Lease (OML) 130 in collaboration with Total, Petrobras, and the NNPC. 

Nigeria’s upstream sector got more of the USD 16 Bn, which is why the NNPC is on the lookout for strategic partnerships and new investments in a bid to develop Nigeria’s crude oil reserves. If realized, this ambition will perhaps help the West African country achieve its 3 million barrels per day (BPD) target by 2023. Judging by its oil wealth, investments sizes, and oil GDP contribution (8.55 percent as of 2018), the goal is not so far from doable. 

NNPC’s Mele Kyari emphasized that the revenue profile of the nation needs to be improved by way of new investments in Nigeria’s petroleum sector. Commending CNOOC’s plans to double down on its investments in the sector, he expressed that the NNPC needs such bound-by-common-interest partnership to reach it’s 2020 target. “To have an investment of USD 16 Bn in Nigeria is clearly an indication of your confidence in us.

Now Here’s Where Needs Work

Nigeria currently pumps 2 million barrels a day, and China’s oil production has been on a steady decline due to natural depletion and a host of geological changes. Because of this deficit, experts forecast that up to 80 percent of the Xi Jinping-led country’s petroleum supply will be imported by 2030. It’s easy to see why both countries need each other to progress in this industry. 

The bad egg to the sauce is that Nigeria’s oil sector is being rocked by a series of challenges. Oil bunkering, failure to reach production targets, lack of transparency, absence of an oil minister, corruption and heavily decried dependence on oil is just some of the league. While exploring the renewable sector could go a long way, the Muhammadu Buhari-led administration continues to set its ambitions on oil. 

Meanwhile, Nigerian business mogul and Africa’s richest man, Aliko Dangote is hammering away on the quest to build what would be the largest oil refinery in the continent.

The Lagos-based USD 12 Bn mega-complex is expected to have an annual refining capacity of 10.4 million tons of gasoline, doubling the country’s refining capacity and help it meet the increasing domestic fuel demand. Expected to reach completion in 2020, the project has the makings of what could take Nigeria from fuel importer to exporter.