Minerals present yet another generous endowment of natural resources in Bayelsa State. The state is Rich in oil (Petroleum), Natural Gas and a variety of solid minerals. These create opportunities for diverse kinds of investment in the various economic sectors including energy, manufacturing services.

INDUSTRY OVERVIEW

Great Investment potentials exists in the oil and gas sector in Bayelsa State considering the abundant natural endowment and the opportunities created by the peculiar environment.

The Oil & Gas or petroleum sector of the economy is the most in Bayelsa state, and indeed Nigeria, because it forms the pivot of the nation’s economy. Oil & Gas from the Niger Delta region as a whole, account for about 90% of national income. Bayelsa State contributes about 40% of the nation’s wealth, through the mining of the abundant deposit of crude oil and gas in its domain.

The state’s enormous reserve of crude oil creates a large room for foreign investment interest. Of the three giant oil reservoirs in the Niger Delta with a potential for 1 Billion barrels production, two are in Bayelsa state, namely:

  • Nembe Creek
  • Gbarain fields

Currently, the state produces 514,800 barrels (about 23.4%) of Nigeria’s 2.2 Million barrels daily crude oil production. This makes Bayelsa, the second largest oil state in the country.

Bayelsa is a beehive of oil industry activities as operators put up their facilities upland in the swamp, creeks and offshore. The major operators in the state are Shell Petroleum Development Corporation (SPDC), AGIP, ChevronTexaco, Consolidated oil and StatOil.

KEY OPPORTUNITIES

Opportunities abound for new investments especially in the following key areas:

  1. Petroleum Refining: Recent developments in Nigeria’s petroleum sub-sector have facilitated local and private participation in the upstream activities. Some state Governments in the Niger Delta region and indigenous companies have been offered marginal oil fields to prospect. With the abolition of the Onshore-Offshore oil Dichotomy, the littoral states of which Bayelsa is among, stand to derive enormous gains from oil and gas investments.

Private refineries have also been licensed. Foreign investors have opportunities to discuss with the Bayelsa State Government for joint venture partnerships to operate in the upstream petroleum industry

Currently, the nation has 3 Refineries located at Port Harcourt, Rivers state, Warri, Delta State and Kaduna, Kaduna state. There is need for a refinery in Bayelsa State.

The current production level and known reserve in the state would support investment in a private refinery

  1. Gas Plants: Nigeria flares about 70% of its associated natural gas in the Niger Delta region. Such flares are found in all flow stations spread on-shore and offshore in Bayelsa and other states in the Niger Delta, even as gas gathering projects of Chevron Texaco and Nigeria Liquefied Natural Gas Company (NLNG), and Shell (SPDC) Gbarain/Ubie project are ongoing.

The Oluasiri Gas supply plant in Nembe Local Government area of the state supplies 53% of all NLNG’s gas feed stock in Bonny, Rivers State.

Opportunities exist for investors to build gas plants and utilize available gas for production of LPG cooking gas and industrial gases, which are in high demand. In the urban centers, LPG is the most sought source of cooking energy. In Yenagoa, the state capital, there is no LPG plant.

Retailers of cooking gas get their stock from Port Harcourt, the capital of neighboring Rivers State.

  1. Petrochemical Industries: Petroleum production in the Niger Delta offers potential for investment in the petrochemical industry for the production of chemicals and allied products for industrial use, for example plastics and fertilizer industries.
  2. Oil Servicing: The oil industry is vast, and technically so. In Bayelsa State it offers opportunities for technical services ranging from seismic and other geotechnical, drilling, pipeline, dredging, water transport, diving and underwater services to environmental response management services etc.

INVESTMENT MODELS SOUGHT:

Government is open to discussions on any of the following investment models:

  1. State-owned/Private Management: The State continues to own the assets but contracts out the management to a private company, with limited subsidy required from the State and freedom from political influences.
  2. Private investment/Joint Venture: The State and a private company jointly own the assets and also drive the management of the venture.
  3. Private investment/Privatization: The State Government sells off the assets of the company to a private company and manages the process of privatization.

INCENTIVES:

  1. Guaranteed Access to adequate and efficient gas supply to provide power to all sectors – The Gbaran-Ubie Integrated Oil and Gas project, one of the many important gas projects in the Niger Delta, attained the gas design capacity of one billion standard cubic of gas per day (bscf/day) on February 5, 2011.   When complete, new pipelines will deliver gas to generate power in the Niger Delta- supporting development in the region. 
  2. Formalisation of the Registration of Land– Land ownership in Bayelsa is mainly traditional, but the government is undertaking a detailed Global Information Systems mapping of landholdings in 2010 and this will facilitate a comprehensive program of land titling to register all land. The government is also undertaking land appropriation for consolidation into commercial farming areas. While the Government has and periodically exercises the right to allocate land, it will rely in many cases on private sector investors to compensate the occupants with customary right of occupation. The government also expects investors to constructively and positively engage with the local communities e.g. by hiring from the community, developing out-grower programs that link small scale farmers with processing and markets, spending a proportion of revenues on community development, etc.
  3. Improve rural infrastructure – The average person in Bayelsa has to travel 40 kilometres to Yenagoa, by road, boats or otherwise. However, the Government has committed to building 3 new senatorial roads connecting Yenagoa with the districts, and an airport and port.
  4. Electrical Infrastructure – where feasible.
  5. Investor One Stop Shop– Providing support services including business registration, assistance with permits required for the establishment and operations of the business, immigration, property acquisition.
  6. Waiver of Government fees for investment agreements.
  7. Ease in obtaining Certificate of Occupancy
  8. Infrastructure support, where needed.
  9. Data support for feasibility studies
  10. Other incentives on a case by case basis

Investors are therefore, encouraged to work closely with BIPA to understand the wider set of available opportunities

If you think Africa, Think Nigeria,

If you think Nigeria, think Bayelsa