India is currently in discussions with Nigeria to sign an energy deal worth $15 billion by end of the year.
According to reports, the federal government made the proposal during a meeting in New Delhi recently.
The reports said Nigeria will swap its crude for the deal in order to boost power production.
“The Nigerian minister requested a potential investment from India of 15 billion USD, if the terms can be agreed to, in Nigeria as upfront payment for crude purchases, to be repaid on the basis of firm term crude contracts over some years,” the report said.
it was gathered that Nigeria and India agreed to strengthen the existing cooperation in the oil and gas sector in general, and in particular to explore investment opportunities for Indian public and private sector companies in Nigeria.
In 2015-16, India imported nearly 23.7 MMT of crude (nearly 12% of India’s overall imports) and over 2 million metric tons per annum of LNG from Nigeria.
Nigeria is one of India’s largest trading partners in Africa.
However, the planned effort may be seen as a small step towards India competing with China in acquiring energy assets in Nigeria. Earlier this year, Nigeria had signed oil and gas infrastructure agreements worth 80 billion USD with Chinese companies. Nigeria needs high value investments to upgrade its refineries. India is stepping up its attempts to match China in acquiring oil and gas blocks in African countries.
While speaking about the financial challenges in the country, Minister of State for Petroleum, Ibe Kachikwu, recently said Nigeria has a bit of a cash flow problem right now, adding, “Our reserves are not as strong as we want them”.
According to him, “The impact of that is the value of the naira is coming down. So what we are trying to do is to leverage on the assets we have to receive immediate cash.”
He said the Organization of the Petroleum Exporting Countries, which has agreed to cut world output to rescue prices, has however allowed a production window of 1.8 million bpd to 2.2 million bpd for recession-hit Nigeria.
Aside the impact of low oil prices, which sales account for 70 percent of Nigerian government’s revenue, the country’s pipelines which are sources of gas for power production, have been crippled by attacks by militants.

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