Africa Oil, Seplat favoured but Nigerian oil faces under-investment: Rencap
Photo supplied by Seplat.
Trying to drag investors back into Nigerian oil is like pushing a boulder up the hill. Like the oil price, there is no way it is going to stay at the top.
Africa Oil, Seplat and Decklar Resources are best placed to thrive in a climate of international under-investment in the sector, according to research from Renaissance Capital analysts Nikolas Stefanou, Alexander Burgansky and Sergey Raskolov on Feb 16.
Decades of under-investment and poor infrastructure are limiting Nigeria’s ability to benefit from higher oil prices. The country’s output dropped to a multi-decade low of less than 1.5m barrels of oil per day (mmbopd) in December 2021, lower even than during attacks by militants in the Niger Delta in 2016. Though January saw a recovery to 1.68mmbopd, Rencap sees 2022 production in the 1.60-1.75mmbopd range.