By OpeOluwani Akintayo
Foreign investment inflows into Nigeria’s oil sector have dropped by 97 per cent, according to data sourced from the Nigerian Bureau of Statistics, NBS.
In its Nigerian Capital Importation Report for the second quarter of 2022, inflows of foreign investments into the oil and gas industry, which stood at $68.6m (N30bn) in the first half of 2021, crashed to $2.5m (N1bn) in the first half of 2022, making it a 97 per cent drop.
According to the bureau, the flow of foreign funds into the petroleum industry in the first six months of 2022 was also 92 per cent lower than the $33m inflow recorded in the last six months of 2021.
The NBS further stated that the oil and gas industry accounted for 0.1 per cent of the total foreign capital inflows into the Nigerian economy in the first half of 2022, compared with 2.5 per cent and 0.8 per cent, respectively, in the first half of 2021 and the second half of 2021.
A breakdown of the inflows revealed that in the first quarter of 2022, $1m foreign capital was imported into the oil and gas sector, while $2m foreign capital came in during the second quarter of the year.
In comparison, in the first and second quarters of 2021, $57m and $11m foreign capital were imported into the sector, respectively; while in the third and fourth quarters of 2022, foreign capital imported into the petroleum industry stood at $1m and $32m, respectively.
In general, the NBS noted that the total value of foreign capital imported into the oil and gas sector between January and June 2022 stood at $3bn, rising by 12 per cent compared with $3bn inflow recorded in the same period in 2021. It was also 21 per cent lower than the $4bn inflows recorded in the second half of 2021.
In its analysis of foreign investments inflows in the second quarter of 2022, the NBS said: “The total value of capital importation into Nigeria in the second quarter of 2022 stood at $1bn from $876m in the corresponding quarter of 2021, showing an increase of 75 per cent.
Executive Vice President, Oando Clean Energy Ltd, Ademola Ogunbanjo, told The PUNCH that fossil fuel was at the edge of chaos, noting that low funding from international oil companies in preference for greener energies was enough sign for the country to consider having an energy transition agenda.
“Fossil fuel is at the edge of chaos. This means that if oil and gas companies decide to shut down their economies against fossil fuels, the whole world would go into a spin. Africa should see opportunity in renewable energy instead of seeing it as a loss. While we acknowledge that gas is Nigeria’s transitional fuel, we rule that the future is hydrogen,” he said.