… MD/CEO says bankable projects, enduring terms and local capability are key to unlocking Nigeria’s oil and gas potential
By Rashidat O. Okunlade | Lagos
Nigeria’s oil and gas resources alone will not secure the financing needed to develop them. Investors need confidence that agreed terms will endure, buyers will take the output, and operators will deliver, Nigeria LNG (NLNG) has said, citing its Train 7 expansion as evidence of how these conditions can unlock capital for major energy projects.
Speaking in Abuja at the 32nd Nigerian Economic Summit (NES), NLNG’s Managing Director and Chief Executive Officer, Adeleye Falade, said the country’s challenge is not a lack of resources, but the ability to turn those resources into projects that lenders are willing to finance.
He spoke during the interactive panel, “Unlocking Nigeria’s Oil Potential: The Push for More Oil.”
‘Certainty Itself Is the Product’
Falade noted that investments in the sector require substantial upfront capital and recovery periods of 20 to 30 years, which depend entirely on confidence that the terms underpinning them will hold throughout their life.
“Certainty itself is the product,” Falade said.
For lenders, he noted, the assessment goes beyond the quality of the resource. It extends to the durability of the investment framework, the predictability of earnings, and the ability of the parties involved to honour their commitments.
He stressed that consistent implementation would be essential to sustaining investor confidence.
The Train 7 Blueprint
Falade pointed to NLNG’s Train 7 financing, secured in 2020 amid the COVID-19 pandemic, as a practical demonstration of what a credible investment proposition can achieve.
The project is being funded through a combination of internally generated cash flows and US$3 billion in external financing from 31 local and international institutions.
Behind that financing, he said, was a track record built over successive expansions. NLNG had developed six operating trains and repaid the loans used to finance those developments, giving lenders evidence of its ability to deliver projects and meet its obligations.
“Track record compounds,” he said, noting that each successful development strengthened the company’s credibility and helped it secure subsequent financing on more competitive terms.
Falade explained that the financing of capital-intensive projects ultimately rests on three critical questions: “Who buys the product? Who carries the risk? Who stands behind the project?”
In NLNG’s case, long-term sales and purchase agreements, including contracts spanning 20 years, establish the commercial foundation ahead of a final investment decision. These agreements allow projected production to be translated into cash flows against which lenders can assess and provide funding.
Operational Reliability and Local Capacity
Operational reliability provides a further test of the investment proposition. Falade reported that NLNG’s plant utilisation had reached 81 per cent year-to-date, after approximately two years at around 60 per cent due to feedgas constraints.
The improvement, he said, demonstrated the plant’s ability to deliver when sufficient gas is available, reinforcing the connection between reliable operations, predictable production, and lender confidence.
Beyond attracting capital, Falade said large-scale projects must leave behind businesses and skills capable of supporting the next generation of investments. Local participation should be deliberately developed, not left to chance or measured solely by money spent, he emphasised.
“Capability has to be deliberately built into what you do,” he said.
Falade cited the construction of its six vessels, for which Nigerian manufacturers supplied products including furniture and cables. He said some suppliers continued doing business with the overseas companies after NLNG’s orders had been completed, demonstrating how participation in a single project could create access to international markets.
He called on policymakers to focus on the growing local capacity and support it with an enabling environment for business to thrive.
Why It Matters
Adeleye Falade’s remarks at the Nigerian Economic Summit cut to the core of the paradox that has long stifled Nigeria’s energy sector: the country is rich in hydrocarbons but poor in bankable projects.
For decades, Nigeria has pointed to its vast crude oil and gas reserves as a guarantee of economic prosperity. Yet, as Falade rightly noted, international lenders and investors do not finance geological potential; they finance certainty. They finance enforceable contracts, predictable regulatory environments, and proven track records. The inability to consistently provide these elements has driven billions of dollars in energy capital to other jurisdictions.
The NLNG Train 7 success story is instructive because it was achieved despite a global pandemic. It succeeded because NLNG had spent decades building the exact ecosystem that Falade describes: a flawless repayment history, long-term off-take agreements, and the operational discipline to keep the trains running. This is the “track record that compounds” a virtuous cycle of credibility that lowers the cost of capital for future expansions.
Furthermore, Falade’s emphasis on the quality of local content, rather than just the quantity of naira spent, is a vital policy shift. Nigerian companies must not be treated merely as passive beneficiaries of corporate social responsibility; they must be integrated into the global supply chain, equipped to compete internationally.
For the federal government, the message is clear: policy stability and the sanctity of contracts are not just bureaucratic niceties they are the foundational infrastructure of national wealth. Until investors can look at Nigeria and see certainty, the resources will remain in the ground while the capital goes elsewhere.
© ROTAMEDIANEWS Digital Newspaper & BusinessEcho Magazine by ROTA Media Concepts
For advert placement, news tips and subscription enquiries, contact the Publisher/Editor-in-Chief, Rashidat Olushola Okunlade.
rotamedianews@gmail.com businessechomag@gmail.com
