SEATTLE — Nigeria has just signed an $80 Billion deal with Chinese firms to improve the infrastructure of the Nigerian oil and gas industry. Nigeria’s Minister of State for Petroleum Resources signed the memorandums confirming the purchase in Beijing after a three-day roadshow.
Major players funding the purchase were Delta Tek and Slavic Petroleum, with the bulk of the money coming from the Nigerian National Petroleum Corporation.
Nigeria is Africa’s largest economy with a GDP of $1.1 trillion.
Since the 1970s, Nigeria’s largest economic sector has been oil exports, with no sign of change in coming years. However, the oil-driven economy has taken major hits recently, slowing economic growth.
Oil prices saw a major drop in late 2014 and early 2015, resulting in Nigeria’s GDP growth slowing from around six percent annually from 2013 through 2014 to just above two percent the following year.
Falling oil prices are not the only culprit for Nigeria’s recent economic troubles.
Violence from paramilitary groups is rampant in the Niger River Delta, slowing oil production. As a result, Nigeria now faces a fuel crisis — shortages in oil have caused major problems for the country’s citizens.
Oil has become so hard to obtain on the mainland that Nigeria has started importing more and more fuel. Black market sale of oil has soared, while overall profits have fallen way down.
Nigerian oil officials hope the infrastructure deal with China will make oil production profitable again.
The memorandums promise improvements to refineries, pipelines, power and gas facilities. The investments are expected to roll in over the course of five years.
The Minister for Petroleum Resources, Dr. Ibe Kachikwu, was hopeful about the Chinese investment. According to the ministhree-daythree day roadshow was “a fantastic outing and if we can follow through on all these, it will change the face of Nigeria’s oil and gas forever.”
– John English