Nigeria vs Angola: The battle of the oil kings
(CNBC) – International Energy Agency (IEA) predicts that Angola will surpass Nigeria as the continent’s top oil producer in 2016.
Although production numbers of Nigeria and Angola between 2014 and 2016 are similar, issues of oil theft and poor governance in Nigeria will see the country lose an estimated 150 thousand barrels of oil per day which is roughly 5 billion dollars a year. This is likely to curb investment.
“Some of the projects in Nigeria have not even been sanctioned yet and final investment decisions have not been taken. Whereas with Angola you’ve seen a lot of investment decisions taking place already,” said Dolapo Oni, an oil and gas analyst from Ecobank.
Eighty per cent of Angola’s oil production is offshore, while only 70-75 per cent of Nigeria’s oil production is offshore. A larger offshore base allows access to greater reserves and it makes it more difficult for thieves or pirates to disturb production.
While Angola has presented opportunities for investment and exploration in the deep water regions, Nigeria has not seen a high level on exploration off-shore.
“If Angola takes the lead it will build momentum that could actually distract companies from Nigeria. So it’s critical for Nigeria to pass the PIB (Petroleum Industry Bill) as soon as possible to get companies to start exploration,” said Oni.
He adds it is unlikely that the PIB for Nigeria will be passed next year. He says factors such as elections are part of the delay as legislation will not be passed until the end of elections. And even after elections there is no telling if the new president or continuing president will be able to take the decision immediately.