Foreign Investors Eye Nigeria’s Post-Reforms Energy Market
The reigning reforms in the energy sector may have spurred the interest of some foreign investors who are now keen to exploit the post-reform energy market.
For decades, foreign companies considering doing business in Nigeria’s oil and gas sector have had to accept certain ‘on-the-ground’ realities that their boards may have found difficult to come to terms with.
Those technicalities are well documented, and whilst by no means universally applied to all Nigerian companies. It is undeniable that Nigeria’s foreign direct investment has been hampered by the perception or fact of corruption and theft.
Such ingrained perceptions do not disappear overnight, but there is a discernible change in mood about the prospects for cleaning up the business practices of the industry that has all happened since the inauguration of a new government.
The Managing Director of the oil and gas Council, a global business network for senior oil and gas executives, Drake Lawhead, said, “The people we speak to in London and in Asia have kept an eye on many of the reforms that are sweeping through the Energy sector in Nigeria. Things like the appointment of Dr Kachikwu and the wholesale change at the Director level at the NNPC and cancellation of contracts, among others, send strong signal to companies here that Nigeria is serious about regaining the trust of the international business community. They are watching to see what happens now.”
Lawhead is running the West Africa Energy Assembly slated for at December 1st at the InterContinental Hotel, Lagos.
He believed that the speculations that President Buhari would coordinate the petroleum ministry would promote transparency in the sector. “It is something that would be highly unusual in Europe or America but which makes sense in Nigeria and for Buhari has been viewed rather positively in the West; a sign that the President is serious about the importance of getting that sector right and has put himself personally in charge of it,” he said.
Lawhead noted that, “institutional change can be slow because there are too many vested interests that exist in bureaucracies for wide scale organisational change. Yet it does happen. It must happen for Nigeria’s oil and gas sector to thrive as it deserves to, and the early signs are that things are changing and importantly, it’s a change that has been noticed by the international business community.