TotalEnergies Chief Executive, Patrick Pouyanne, has explained the reasons the company diverted its $6 billion energy investment project meant for Nigeria to Angola.
Pouyanne was speaking at the Africa CEO Forum in Kigali, Rwanda over the weekend. He said Nigeria’s inconsistent policy environment was the main factor that dissuaded his oil giant company to pivot to a more predictable country like Angola for the new investment.
Angola is another major oil-producing country in Africa, but according to Pouyanne, offers a more stable policy environment critical for business investments.
Nigeria currently contributes about 9% of TotalEnergies’ global output and houses nearly 20% of its overall investments.
Mr. Pouyanne acknowledged that although the Niger Delta has a more prolific oil production potential that would have been an ideal place for the gigantic investment, Nigeria’s erratic policy landscape rendered it untenable and unsafe.
“Nigeria“, he says “loves to open topics without closing them“.
“You love to debate. There is always a new legislature in Nigeria about a new petroleum law. When you have such permanent debates, it’s difficult for investors looking for long-term structure to know what direction to go.
“In reality, the Niger Delta is the most prolific part of West Africa. But if you look at what happened, because of these debates, there has not been a single exploration in Nigeria for 12 years.”
He added, “It’s important to have a debate and then settle it and put a framework on the table that investors can trust.
“We have countries that have perfectly integrated policies like Angola. So, we go to Angola and announced a very large $6 billion projects in the beginning of the week because there their framework is stable. So we know where we go,” Pouyanne said.
Insecurity Also To Blame
Mr. Pouyanne also pointed to insecurity as another impeding factor. He said there was a need for stronger security assurances to protect investments in Nigeria from violence and vandalization. Lack of skilled human capital was another factor he highlighted that is stifling new mega investments into Nigeria.
“What are the challenges? Security comes first. For a CEO like me, the security of my people is of utmost importance. Finding talent is also a difficulty. In some countries like Nigeria and Rwanda, we find it difficult to find talent due to educational challenges. We contribute by training people.”
In December 2023, TotalEnergies announced it planned to invest $6 billion in Nigeria, targeting deep-water projects and gas production. After Pouyanne met with President Bola Tinubu, he expected the new administration to resolve the insecurity challenges in the region.
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