Nigeria and Angola, the largest sub-Saharan oil producers are struggling to ensure future oil production. This is due to a lack of investment as major international corporations change their investment strategies.
Prioritization has now changed. International oil companies are looking more critically at new projects. The focus is on controlling the investment budget. The main victims are the countries that are dependent on outside investment. Nigeria and Angola see fewer and fewer new projects approved.
The ambitions of the two states to increase the production volume until 2025 stand with it large obstacles in the way, since financial means for the realization are missing, so global data in a report.
Conor Ward, oil and gas analyst at Global Data, said sub-Saharan Africa has great potential and could easily lead Europe in terms of oil and gas production.
“Sub-Saharan Africa is seeing a shift of investment away from the more developed countries in the region, most notably Nigeria, and more towards frontier countries such as Mauritania, Senegal, Mozambique, and Uganda as the fiscal terms offered by the host countries are far more appealing and have a large untapped resource base. If Nigeria wishes to continue to attract investment and achieve a plateau in production, it will need to tackle the above ground risks which companies face”, Ward added.
The two countries are likely to rethink their strategy to get investment for new projects. New incentives need to be put in place. Lack of adjustment and aggravating regulations currently make it too easy for oil companies to get a leg up on the two oil states.
Especially as fossil fuels increasingly compete with clean energy sources. Many energy companies are already turning their sights on shifting financial resources to low-carbon alternatives.