PREVIEW
The Chancellor explores a deal with Abuja to diversify Germany's energy suppliers as Moscow's war on Ukraine forces gas importers to widen their horizons
The prospect of Germany opening negotiations for a longer-term gas supply agreement with Nigeria could be a turning point for the government's search for investment in its energy sector.
With the biggest reserves of gas in Africa and ninth biggest in the world, Nigeria's attempts to develop its export industry has been held back by complex and contradictory regulatory regimes together with corporate and political corruption.
Instead of investing in Nigeria which established a liquefied natural gas export industry three decades ago – which has become one of the most reliable revenue sources for its state and corporate shareholders – international energy companies have favoured newer territories such as Mozambique, Tanzania, Namibia and Senegal where they find their dealings with officialdom less arduous.
Should Nigeria strike a deal with Germany, it would be a huge win for Abuja's new economic team. In Abuja, Chancellor Olaf Scholz is suggesting that Nigeria could be part of Berlin's diversified gas supply following Russia's war in Ukraine.
Scholz met with President Bola Tinubu on Sunday, with officials in Berlin briefing that trade and investment and migration would be the main agenda items.
Germany has a 'considerable demand for natural gas', Scholz told the Lagos-based Punch newspaper adding that 'concrete amounts' of supplies should be agreed on in negotiations between Nigerian gas producers and German gas traders.
'There are a lot of chances not just from gas and oil… but for better using the capacities of your country, but also for going into investments for the future, which is about hydrogen,' said Scholz. Nigerian officials have indicated that an agreement with Berlin could be conditioned on the restitution of colonial-era Nigerian artefacts.
Though energy has been one of Germany's main priorities in terms of Africa policy, particularly the transition to clean energy – and the negotiation of Just Energy Transitions with African states – Russia's invasion of Ukraine in February 2022 has forced it to reevaluate its own supply of fossil fuels.
Last year, following meetings with Senegal's President Macky Sall, Scholz said that Germany, which is still exploring alternatives to the cancelled NordStream II gas pipeline with Russia, was looking at investing in a gas project near Senegal's border with Mauritania (AC Dispatches, 9/5/23, Chancellor Scholz seeks cooperation with Africa on tech and green energy).
Copyright © Africa Confidential 2024
https://www.africa-confidential.com
Prepared for Free Article on 21/11/2024 at 16:51. Authorized users may download, save, and print articles for their own use, but may not further disseminate these articles in their electronic form without express written permission from Africa Confidential / Asempa Limited. Contact subscriptions@africa-confidential.com.