Nigeria Leads Effort for $9 Billion African Energy Plan

LAGOS (Capital Markets in Africa)  – Nigeria is leading a continent-wide drive to raise as much as $9 billion to help African nations fund projects including oil exploration, refineries and pipelines, the country’s oil minister said.

Africa’s largest oil producer is working with more than a dozen other nations grouped under the African Petroleum Producers Organization, or APPO, to raise $1 billion in start-up funding for the African Energy Investment Corp., Minister of State for Petroleum Resources Emmanuel Kachikwu said in an interview. At least half of this will come from private investors including venture capital companies, he said.

“The target is to be able to drive work-funding distribution in excess of $9 billion” over the coming year, Kachikwu said on the sidelines of an oil conference in Abuja. That includes start-up money and credit lines with financial institutions, he said.

Nigeria, which currently pumps about 1.75 million barrels of crude a day, is trying to revive APPO after decades of inactivity and poor collaboration within the African oil group. Producers on the continent have become “silos” and need to start collaborating more on transnational projects to boost development and protect the regional market, Kachikwu said.

OPEC Segment
Also a member of the Organization of Petroleum Exporting Countries, Nigeria is working to establish the 18-nation African group as a “mini-segment” of OPEC. African members would take a unified position on issues including oil prices, output cuts, project costs and funding, according to Kachikwu.

“I have done this informally through the last two years of OPEC such that whenever we go to Vienna, those who are OPEC members will meet with me first so we toe a common position,” he said, referring to meetings at the producer group’s headquarters. “What we have found out is that it has been very effective because suddenly the likes of Saudi Arabia and the rest find that they could no longer just roll off African support just like that.”

Nigeria is scheduled to hold a general election from Feb. 16, with President Muhammadu Buhari seeking a second term. His main challenger, Atiku Abubakar, has said that he would privatize the state-run oil firm, which he called a ‘mafia organization,’ if he is reelected. The Nigerian National Petroleum Corp. has a long-standing reputation for inefficiency and opaque management.

Source: Bloomberg Business News