PwC Urges South Africans To Invest In Nigeria Oil Sector To Secure Refinery Supply
PwC pushes South African investors to take upstream stakes in Nigerian oil, as NUPRC backs oil block ownership for refiners.
PwC pushes South African investors to take upstream stakes in Nigerian oil, as NUPRC backs oil block ownership for refiners.
PricewaterhouseCoopers (PwC) has called on South African investors, banks, and policymakers to take direct stakes in Nigeria’s upstream oil sector to guarantee crude supply for their domestic refineries, adopting the same playbook European and American majors used to build energy security for their countries.
The call came as Nigerian Upstream Petroleum Regulatory Commission (NUPRC) urged members of the Crude Oil Refinery Owners Association of Nigeria (CORAN) to consider acquiring oil blocks in upcoming licensing rounds as a long-term solution to crude supply challenges.
The appeal by PwC was made by its Partner and Africa Oil and Gas Leader, Pedro Omontuemhen.
Omontuemhen spoke in Lagos during the Fourth South Africa Week, with the theme, “Repositioning and Promoting Energy Investments between South Africa and Nigeria.”
He stated that the two economies had complementary strengths across oil, gas, renewables, and enabling infrastructure that could create scalable, cross-border energy investment opportunities.
“Let me start from South Africa. If I were a South African, I would ask myself, where are the investment opportunities in Nigeria?” Omontuemhen said, referencing the Dangote Refinery’s plan to supply petroleum products across Africa.
He stated that South Africa had little or no oil, despite ongoing exploration in the Orange Basin.
Omontuemhen said nearby Namibia, which had the same sedimentary basin, had found oil, an indication that South Africa should also find but had not been able to do so at the moment.
Omontuemhen urged South African firms to replicate the model of the international oil companies (IOCs) by investing in the oil exploration and production space in Nigeria and securing crude for their home countries’ refineries.
He stated, “If I was South African, I would take the examples of the Americans or the British who came to Nigeria and invested in oil in Nigeria, and they took the oil back home to refine. Because South Africa at the moment is importing a lot of the oil they are refining.
“Why can’t the South African businessman or the South African bank, the DBSA, invest in oil in Nigeria and then take the oil? Because that’s your share of the crude, you take it back to South Africa, so that way, you’re also securing your supply, which is what the British and Americans did.”
He added, “ExxonMobil, Total, the French, they came here, invested in oil, and they took the oil back to their country to refine.”
Omontuemhen encouraged participation by South Africans in Nigeria’s ongoing oil bid round, where 50 oil blocks spanning onshore, swamp, shallow water and deep-water were being auctioned.
He stated, “Look for credible businessmen in the room here who you can invest in the oil. You take the crude oil and take it back to South Africa, that way, you’re actually securing your supply. And I think you should also do the same thing when you come to Namibia.”
Omontuemhen, who further spoke on the opportunities in the upstream oil and gas sectors in Nigeria and South Africa, cited joint exploration, production sharing, and technology transfer.
He stressed that Nigeria’s deep-water assets offered premium opportunities for South Africa technical partners.
For gas, Omontuemhen said there was huge value in monetising Nigeria’s gas flares, supplying South Africa’s energy transition, adding that a combined liquefied natural gas (LNG) value chain creates significant multi-billion-dollar potential.
In renewables, he said “SA’s solar and wind expertise meets Nigeria’s abundance of solar irradiation,” opening room for “utility-scaled projects and distributed energy solutions”.
He made a strong push for dual listings for both countries, highlighting access to multiple capital markets through listings on two exchanges, enhancing liquidity, visibility, and investor participation.
Pointing to Seplat’s Nigeria-London listing, Omontuemhen asked, “Why are we not listed in South Africa? What should we do in South Africa to make the dual listing more attractive to the Nigeria oil and gas fields?”
He recalled Oando’s earlier failed Johannesburg listing, saying other Nigerian firms can try it again and learn from the mistakes of others.
Omontuemhen pointed out that South African technology remained underutilised.
According to him, “Sasol developed a technology that Chevron copied and it’s all over the world. Why are more companies in Nigeria not using the Sasol technology? To take your stranded gas and make it more valuable, so you can have your naphtha and your diesel.”
He described South Africa’s financial sector as a source of cheap capital, explaining that the banks in South Africa have what he called ancient capital that have been there for years and well-established.
He explained, “So we can tap on that resource as Nigerians to produce here in Nigeria. Can you guys come and invest and participate in what we are doing?
“Nigeria has huge resources, huge population. South Africa, good technology, well-structured, and systems that work. So we can collaborate as two giants of Africa to make our country even much better and to make the continent much, much better.”
Omontuemhen stated, “Private investors play a critical role in mobilising capital, accelerating delivery, and improving operational performance across the energy value chain. Working with governments, the private sector can mobilise capital, de-risk investment, enable growth, improve education and efficiency, and ensure both countries benefit.”
Referring to South Africa and Nigeria as the biggest countries in Sub-Saharan Africa, the PwC energy expert said South Africa stood at 19 per cent and Nigeria at 40 per cent in the continental Gross Domestic Product (GDP) but their power profiles differed sharply.
He said South Africa had 55.4 gigawatts of installed power capacity while Nigeria had 14GW for a far larger population.
According to him, “They actually have more power per person than we do in Nigeria. If you’re talking about energy security, which we call energy poverty, there’s more energy poverty in Nigeria than in South Africa.”
Omonfoman stated that recent mergers and acquisitions (M&A) in Nigeria showed momentum, citing the Seplat-ExxonMobil deal, Renaissance acquisition of Shell Petroleum Development Company (SPDC), Oando’s purchase of Eni, and Axxela-Blue Coal.
He stated, “So there are deals going on, so even in the midst of all of these issues we’re talking about, there are still huge opportunities to make money.
