Nigerian Oil Companies Require Foreign Investment

Ambit Energy Corporation pic
Ambit Energy Corporation
Image: ambitenergycorp.com

Ambit Energy Corporation is an international oil and gas company headquartered in Calgary, Canada, with offices in Nigeria. The corporate entities and structure created by Ambit Energy Corporation are designed to fit the goals of the Nigerian government’s indigenization program.

In 1990, the Nigerian government established the Indigenous Concession Program (ICP), which set new rules favoring the awarding of oil rights to local oil companies. Foreign equity holding of marginal fields is limited to 40 percent, and foreign partners face stringent project financing demands.

Nigerian government policies are intended to repatriate the oil and gas industry from foreign ownership and allow local companies to monetize natural resources. However, marginal oil fields of the Niger Delta are often found in challenging terrain that requires advanced oil recovery techniques. This results in oil and gas that is costly to produce and requires extensive technical savvy.

The government is making effort to fast-track the infrastructure and technological and managerial know-how for the country to take advantage of its gas and oil reserves. Recent policies in Nigeria, while limiting foreign operation, still leave room for foreign investment in terms of financing and technical assistance. The government believes that carving out a certain percentage of participation in the industry by local oil companies, combined with Foreign Direct Investment (FDI), will allow local companies to become more competent in their operations.

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