Despite holding about 38 percent of Africa’s hydrocarbon reserves, Nigeria has attracted only just 4 percent  of investments inflow into Africa since 2016. Nigeria, the most populous nation in Africa, boasts of over  37 billion barrels of proven crude oil reserves and  209 trillion cubic feet of proven gas reserves.

Based on figures from the Nigerian Upstream Petrolatum Regulatory Commission (NUPRC), Nigeria’s  oil  and gas reserves account for 30 percent and 34 percent of the Africa’s oil and gas reserves, respectively.

Low investment in the nation’s oil and gas sector, particularly in the upstream end, has been attributed to series of factors, ranging from  regulatory uncertainty to insecurity, poor infrastructure, host community restiveness, among others. While the enactment of Petroleum Industry Act (PIA) in 2021 was a significant step,  the country needed other things to be more appealing for energy projects.

To improve the investment  environment and make Nigeria attractive to would-be investors, President Bola Tinubu, in February, signed three Executive Orders (EOs). The orders which became effective February 28 are: Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024; Presidential Directive on Local Content Compliance Requirements, 2024; and Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024. This is in addition to the diversification of Nigeria’s energy portfolio through Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG) incentives to support transition to cleaner energy sources.

According to the Special Adviser to the President on Energy, Olu Verheijen, the directives aim to immediately unlock up to $2.5 billion in new oil and gas investments in the country.  Speaking recently at a luncheon organized as part of the inaugural US-Nigeria Strategic Energy Dialogue, hosted by the US State Department, in Washington, DC, Verheijen stated that the reforms have since started yielding results, with the recent announcement of Final Investment Decision (FID) on $550 million Ubeta gas project between the state-owned Nigerian National Petroleum Company Limited (NNPCL) and TotalEnergies.

The FID on the Ubeta Field Development Project was taken in June. The Ubeta field, which was discovered in 1964, is located northwest of Port Harcourt, Rivers State. Verheijen said the upstream gas project would deliver 350 million standard cubic feet of gas per day when operational.

Verheijen expressed optimism in Nigeria’s energy sector, especially with the renewed focus on gas as a transition fuel in the race to meet the country’s commitments to the Paris climate agreement.

“We see resilient demand for gas through the energy transition as it is a readily available, cost-effective backup to renewables while cutting emissions by half immediately,” a statement by the presidency quoted her as saying.

The dialogue was established in June 2023 to create a platform for the US and Nigerian governments and private sector to deepen bilateral cooperation to advance the implementation of shared energy and climate action ambitions.

“I cannot overstate the importance of our longstanding relationship with the US and this inaugural dialogue. The goal of this dialogue is to for us to jointly proffer solutions that will close the energy access gap for close to 100 million Nigerians who still lack reliable power,” said Verheijen. “We want existing and potential partners to better understand our areas of priority so that our collaboration can be better targeted, and with tangible outcomes.”

In his response, the U.S. Assistant Secretary of the State Department’s Bureau of Energy Resources, Geoffrey Pyatt, noted that the dialogue was apt and strategic.

“The inaugural U.S.-Nigeria Strategic Energy Dialogue has set the stage for strengthened energy collaboration between the United States and Nigeria. Together, we’re advancing shared energy security, decarbonisation, and economic growth goals,” he said.

Nigeria is working on  creating a robust regulatory framework to attract new investments for the production of gas for power, transportation and clean cooking. But with a lot of international financiers withholding funding from the oil and gas sector,  investment in the industry has been limited in not just Nigeria, but Africa. This has impacted negatively on exploration and production of these key resources.

While the African Export and Import Bank (Afreximbank) is trying to fill the void that has been created with  more supports to the industry, the scale of capital required for large scale development  on the continent is enormous, and beyond what the bank and  the newly created Africa Energy Bank  can handle.

However, the renewed interest of the biggest US lender, JPMorgan Chase, to expand in Africa may just be the beginning of a new investment drive in Nigeria.

According to Reuters,  CEO Jamie Dimon plans to visit Nigeria, Kenya,  South Africa and Ivory Coast  mid-October —  his first trip in Africa in seven years.

This is as major global banks  seek to gain bigger share of sovereign debt and corporate transactions in Africa, while also aiming to serve more international companies that have operations on the continent, analysts told Reuters.

JPMorgan currently operates  in Nigeria and South Africa where it offers asset and wealth management as well as commercial and investment banking services.

As major international lenders compete to gain bigger share of sovereign debt and corporate transactions in Africa, this may open new wave of opportunities for investment flow, especially in the energy sector,  with the growing quest to address energy poverty on the continent.