Oando Plc has attributed foreign lenders’ reluctance to finance African oil and gas companies to regulatory uncertainty, inconsistent government policies and operational risks.
The company’s General Manager of Corporate Communications, Alero Balogun, disclosed this at an industry event organised by energy journalists in Lagos, calling for increased domestic investment to support the sector.
Balogun said the financing needs of Nigeria’s energy industry differ from what international lenders are willing to provide, particularly as oil and gas projects require substantial long-term funding.
She urged Nigerian financial institutions and investors to develop local financing options that would enable indigenous operators to fund projects without depending heavily on foreign lenders.
According to her, reducing investment risks and strengthening domestic capital sources would improve local companies’ access to oil and gas assets.
Meanwhile, the Acting Managing Director and Gas Asset Manager at Neconde Energy Limited, Chichi Emenike, said Nigeria’s ambition to develop its gas industry would remain difficult to achieve without changes to the domestic gas pricing system.
Emenike identified infrastructure gaps and government-controlled prices as major obstacles to investment, explaining that gas production requires significant spending on drilling, pipelines, processing facilities and distribution networks.
She noted that although compressed natural gas (CNG) and liquefied natural gas (LNG) offer alternative ways to transport gas to consumers, inadequate infrastructure continues to limit the commercial development of the country’s gas resources.
She also explained that gas operations are heavily dependent on foreign-denominated funding and equipment, exposing investors to high costs that regulated prices may not adequately cover.
According to her, investors need a commercially viable market with reliable, paying customers to secure financing and recover the costs of developing gas projects.
Emenike acknowledged that the Petroleum Industry Act and other reforms had helped improve the business environment but said more changes were needed to attract substantial investment.
She called for full liberalisation of the domestic gas market, arguing that allowing prices to reflect market conditions would improve investor confidence and support the expansion of production and infrastructure.
Both executives stressed that consistent government policies, stronger local financing and a commercially sustainable gas market would be essential to increasing investment in Nigeria’s oil and gas industry.
