FG and UAE to Strengthen Oil Exploration Collaboration

The Nigerian government has called on the United Arab Emirates (UAE) to invest in the renewal and reconstruction of its aging oil pipeline infrastructure. On Monday, the Minister of State for Petroleum (Oil), Heineken Lokpobiri, emphasized the urgent need to replace the over 50-year-old pipelines, which have surpassed their operational lifespans. The appeal was made during a meeting in Abuja with a UAE delegation led by Ambassador Salem Al Shamsi.

Lokpobiri highlighted the significant opportunities for investment in Nigeria’s oil sector, particularly in pipeline renewal. “Our pipelines need renewal. They have been there for over 50 years since Nigeria found oil in commercial quantities in 1956/1958,” he stated. The minister underscored the necessity of these pipelines for transporting crude oil to export terminals, inviting UAE investors to participate in these ventures with attractive investment models.

Collaboration and Investment Prospects in Nigeria’s Oil Sector

During the meeting, Lokpobiri assured the UAE delegation that Nigeria offers lucrative investment opportunities, particularly in the oil and gas sector. He proposed that investors could recover their investments through charges on the transported crude oil. “For any barrel of crude you transport through your pipes, you have to recover your investment by placing mutually agreeable charges,” he explained. This model aims to incentivize foreign investments by ensuring a secure return on investment.

Lokpobiri also highlighted Nigeria’s vast gas reserves, which exceed 208 trillion cubic feet, and the potential for further discoveries. He noted that Nigeria’s crude reserves, currently estimated at 37 billion barrels, are likely to be higher due to outdated records. The government is committed to resuming drilling campaigns and liberalizing processes to attract more investments and sustain growth in the sector.

UAE And Nigeria Strategic Partnership For Infrastructure Development

The meeting also focused on strengthening the strategic relationship between Nigeria and the UAE. Lokpobiri expressed satisfaction with the resolution of the visa issue, which had previously hindered bilateral relations. He emphasized that Nigeria is open for investments and aims to eliminate bureaucratic barriers that delay such ventures. “We want to assure the UAE that Nigeria is open for investments and we are committed to deepening our very strategic relationship,” he stated.

In a related development, the Nigerian National Petroleum Company (NNPC) is set to replace its extensive petroleum products pipeline network over the next three years. The Group Chief Executive Officer, Mele Kyari, announced this initiative at the 2024 Society of Petroleum Engineers Oloibiri Lecture Series and Energy Forum in Abuja. The replacement of the 5,000km pipeline network is part of a Build, Operate and Transfer (BOT) process aimed at enhancing the efficiency and reliability of Nigeria’s oil transportation infrastructure.

Enhancing Oil Exploration and Economic Growth

The Nigerian government remains steadfast in its commitment to oil exploration despite global calls for reducing reliance on fossil fuels. Lokpobiri reassured the UAE delegation that both nations are aligned on continuing crude oil drilling. He emphasized the importance of this sector for Nigeria’s economic growth and the potential for UAE investors to contribute significantly to the country’s oil infrastructure renewal.

The minister also pointed out that the NNPC’s transition to a profit-driven national oil company under the Petroleum Industry Act is designed to attract more investments. This shift aims to optimize Nigeria’s oil and gas sector, making it more competitive and appealing to foreign investors. By leveraging its OPEC membership and fostering strategic partnerships, Nigeria seeks to position itself as a premier destination for oil and gas investments in the region.

The collaborative efforts between Nigeria and the UAE highlight the mutual benefits of such partnerships. With the UAE’s substantial financial resources and Nigeria’s abundant natural reserves, the partnership promises significant advancements in infrastructure, economic growth, and energy sector stability.