Trouble! Nigeria May Lose Investment Worth $257 Billion From Oil Companies

A global oil sector consulting firm, Wood Mackenzie, has said that the trauma of low oil prices will lead to cancellation or suspension of investments worth $257billion in the oil and gas industry over the next two years.

The Wood Mackenzie report covered 46 international oil companies globally, some of which have significant presence in Nigeria. These companies include Royal Dutch Shell, Exxon Mobil, Total and Chevron.

An analysis of this data has indicated that investments worth $112bn will be cancelled or suspended in 2015 while another tranche of $145 billion will be affected in 2016. Also, the oil price slide can lead to numerous mergers and acquisitions.

To this end, Wood Mackenzie, said 2015 will not be a rosy year for exploration, however, an opportunity will open to capture high-impact acreage and discovered resource opportunities.

Chairman and chief executive officer of International Energy Service(IES) Oladiran Fawibe , who commented on the development, said following the oil market situation, it is only expected that the oil firms would react by suspending projects, especially new ones, when they are faced with such challenges.

On this note, the Nigeria local content development programme will inevitably suffer major set-backs, as international oil companies operating in the country will be forced to suspend some projects that would impact directly on local companies’ growth and operations.

Also by extension, revenue and employment within the Nigerian oil sector will be affected.

BizWatchNigeria

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