The National Insurance Commission (NAICOM) said insurance industry will do everything within its powers to key into the $48 billion or N1.728trillion investments in the oil and gas sector to tap from the available opportunities and grow the sector.
Dr. Maikanti Baru, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), had recently announced that over $48 billion investment opportunities are available in the upcoming capital projects within Nigeria’s Oil and Gas Industry.
Dr. Baru, while speaking at a Panel Session on the topic “Insights on Future Exploration Hotspots: Opportunities for Africa’s Oil & Gas Industry” under the sub-theme “The New Frontier for Africa’s Oil & Gas” at the 2019 International Petroleum Week conference which began in London, Wednesday said the continent’s energy outlook was looking positive amid difficult operating and economic headwinds.
He explained that over 41 billion barrels of oil and 319 trillion cubic feet of gas were yet to be discovered in sub-Saharan Africa alone, while between 2008 and 2017, exploratory success in the sub-region was at least 453per cent.
According to him, there has been a surge in the capital expenditure (CAPEX) across Africa’s Oil and Gas Sector, with close to $194 billion earmarked to be spent between 2018 and 2025 on 93 upcoming oil and gas fields in Africa.
“Out of this $194 billion, Nigeria accounts for $48.04 billion (over 24.8%) of the total CAPEX coming into upcoming projects in Africa over 2018 to 2025, with over 20 planned projects,” Baru stated.
He observed that 23.83per cent of the CAPEX in Africa would be spent in Mozambique, 11.3per cent in Angola while about 29.23per cent would be spent in Tanzania, Senegal, Mauritania, Uganda, Egypt, Algeria and Kenya combined.
Baru informed that with over 14 oil producing countries, Africa currently accounts for 7.53per cent (126.5 Billion barrels of crude oil) and 7.13per cent (488 Tcf of gas) of global proven oil and gas reserves respectively.
He maintained that in terms of production, the continent accounted for 8.73per cent (8.1 Million barrels per day) of global oil production and 6.13per cent (21.8bscfd) of global gas production, even as it consumed 4 Million barrels of oil per day and 13.7bscfd of gas (equivalent to 4.1% and 3.9% of global oil and consumption respectively).
Shedding more light on investment opportunities in Nigeria, Dr. Baru observed that the NNPC’s Frontier Exploration Service was currently drilling the Kolmani River-2 Well where desktop estimates revealed that about 400Bcf of gas is expected to be encountered.
He stressed that several new frontiers for exploration opportunities abound in Nigeria, even as offshore discoveries in the country have mostly been limited to between 1,000 – 1,500m of water depth.
“Beyond these water depths, the new frontiers of ultra-deep waters need to be tested. And that is where we need the investors,” Baru told the audience.
He stated that unless issues related to Legal and Regulatory uncertainties, lack of infrastructure, skilled manpower shortage, transparency and accountability are addressed amongst key stakeholders, the continent’s Oil and Gas Industry may not achieve its full potentials.
Commenting on the development, Sunday Thomas, Deputy Commissioner (Technical), NAICOM said such capital investment is a good omen for the economy generally and insurance industry in particular.
He said in line with the Local Content Policy of the Federal Government, insurance industry will do everything within its powers to take advantage of such investment especially in the area of risk management and advisory services.
Thomas said every capital investment is a potential opportunity for insurance industry, adding that the industry has done well in the past in line with the local content policy by ensuring the domesticating of such capital investment within the sector.
He said NAICOM as a regulator will play their part by proving necessary regulatory support that will assist the players to take active part in the investment. “We are ready to make sure that insurance aspect of the business is taken care of and we will not leave any stone unturned,” he said.