IEA Membership Could Double Nigeria’s Energy Investment in Five Years — Birol

Nigeria could attract twice its current level of investment in the energy sector within the next five years following its admission as an associate member of the International Energy Agency (IEA), the agency’s Executive Director, Fatih Birol, has said. Birol, who spoke during a visit to Abuja, said Nigeria’s new relationship with the Paris-based energy watchdog would create opportunities for increased investment, deeper technical cooperation and a stronger role for the country in international energy policy discussions. He said the IEA’s engagement with Nigeria could help improve investor confidence and unlock capital for a sector that requires substantial funding across oil, gas and renewable energy. “My goal is, in a very short period of time, in five years, at least doubling the energy investments Nigeria is receiving today,” Birol said. Nigeria, Africa’s largest oil producer, has significant opportunities across its energy value chain but has struggled with years of underinvestment. Birol said greater access to capital would be particularly important for developing the country’s oil and gas resources while also expanding renewable energy, including solar power. Beyond its natural resources, he said changing patterns in global energy trade could position Nigeria to attract governments and private investors searching for reliable partners amid growing geopolitical and supply-chain uncertainties. “The most scarce commodity is not oil, not gas, not uranium, not lithium. It is trust,” he said. “Countries are looking for partners they can rely on.” Birol described Nigeria as a credible energy supplier, while highlighting the growing role of the Dangote refinery in the regional and international energy market. He said exports from the refinery, which has a processing capacity of about 700,000 barrels of crude oil per day, had helped ease fuel-supply pressures in Europe in recent months. Nigeria Targets Higher Oil Production The potential increase in investment comes as Nigeria pursues an ambitious plan to raise crude oil production to almost three million barrels per day by 2030. The country is relying on ongoing energy-sector reforms, infrastructure development and improved security measures to tackle oil theft and other operational challenges that have discouraged investment in the sector. Nigeria’s oil industry has faced years of declining investment, production disruptions and security concerns, making the attraction of fresh domestic and foreign capital a key priority for the government. Birol said membership of the IEA would provide an additional platform for Nigeria to strengthen cooperation with major energy economies and improve its ability to participate in global energy discussions. Nigeria became an associate member of the IEA in July after the agency’s member countries, including the United States, Germany, Italy and Japan, unanimously approved its application, according to Birol. As part of the new relationship, the IEA and Nigeria are expected to sign a joint work programme in Abuja covering areas such as natural gas, electrification, clean cooking, energy efficiency and energy data development. Improving the quality and availability of energy data is expected to be particularly important for Nigeria, as investors and market participants have long raised concerns over gaps in data relating to oil production, exports and domestic consumption. Better data collection and reporting could help strengthen transparency, improve investment decisions and provide policymakers with more reliable information for planning and regulation. Geopolitical Risks Threaten Energy Supplies The IEA chief also warned that rising geopolitical tensions and disruptions along major energy supply routes were reshaping global trade and creating new risks for consumers and energy-importing countries. He said governments were increasingly reassessing their energy partnerships and supply chains following disruptions linked to Russia’s full-scale invasion of Ukraine and instability along important shipping routes. According to Birol, the Strait of Hormuz remains a particularly important risk to global energy markets because of its significance to the movement of crude oil and refined petroleum products. “If the Strait of Hormuz is not going to open convincingly sometime soon, we may have some difficulties both in terms of crude oil, but especially on products such as diesel and jet fuel,” Birol said. He warned that the coming weeks and months would be critical for maintaining a healthy balance between global oil supply and demand. For Nigeria, the changing global energy landscape presents both challenges and opportunities. While geopolitical disruptions could create volatility in energy markets, the country’s substantial oil and gas resources, expanding refining capacity and renewable-energy potential could position it as a more important supplier if it succeeds in attracting the investment required to develop its resources. Birol’s five-year investment target therefore places renewed focus on Nigeria’s ability to strengthen investor confidence, improve infrastructure and security, provide reliable data and implement reforms capable of turning its vast energy resources into sustained economic growth.