Nigeria and Indonesia are considering direct government-to-government partnerships in the oil and gas sector, a move expected to attract billions of dollars in investment, create employment and promote technology transfer.
The President of the Nigerian-Indonesian Chamber of Commerce and Industry, Ishmael Balogun, disclosed this on Saturday while speaking with journalists after the 41st Indonesian Trade Expo, which attracted hundreds of Nigerian delegates.
Balogun said Indonesia currently purchases approximately $3bn worth of Nigerian crude oil annually but expressed optimism that moving away from third-party transactions to direct government-to-government agreements would create opportunities for investment in oil exploration and other areas.
“Indonesia has been buying crude from Nigeria, but they are buying it from a third-party kind of relationship. But this time around, we’re looking at a relationship where they can do a G2G, which opens up a lot of opportunities in exploration,” he said.
He explained that direct investment in exploration would deliver broader economic benefits to Nigeria, particularly through employment generation, knowledge transfer and increased income for citizens.
“If you have an idea of the amount of money that is invested to explore for oil, that means jobs will be created for the common man in Nigeria. There will be knowledge transfer; there will be income that will be earned,” he added.
According to him, the proposed arrangement would be mutually beneficial to both countries, with the potential to attract Foreign Direct Investment and strengthen their economic ties.
“Trading is good. Trading is what trading is. You buy, you go. But when it comes to exploration, life changes. And the level of investment we’re talking about is in billions of dollars that affect literally every single body in Nigeria that’s involved,” Balogun said.
He revealed that more than 25 representatives of the Indonesian government visited Nigeria less than a month before the interview to examine opportunities for increased cooperation in the energy industry.
The delegation comprised officials of Indonesian state-owned energy company Pertamina, including representatives from its renewable energy and exploration divisions, as well as the country’s Vice Minister of Foreign Affairs.
Balogun said the delegation held discussions with Nigeria’s Minister of Foreign Affairs and officials of the Nigerian National Petroleum Company Limited and the Nigerian Upstream Petroleum Regulatory Commission.
He expressed hope that the discussions would lead to concrete investment agreements and deepen cooperation between both countries in the energy sector.
Providing figures on their trade relationship, Balogun said bilateral trade increased from $2bn in 2020 to $2.7bn in 2021, $2.9bn in 2022 and $4.5bn in 2023.
He added that Nigeria had remained Indonesia’s largest trading partner in Africa since overtaking South Africa in 2020.
The Nigerian-Indonesian Chamber of Commerce and Industry, established in 1997, has about 155 corporate members with interests in oil and gas, agriculture, renewable energy, manufacturing, pharmaceuticals and infrastructure.
Balogun also disclosed that the chamber facilitates transactions worth more than N1bn annually among its members.
He said Nigerian businesses import pharmaceutical products, palm oil, electronics and fast-moving consumer goods from Indonesia, while Indonesian companies purchase agricultural commodities from Nigeria.
Meanwhile, the Chief Executive Officer of Prime Minister Logistics, Giorgio Enrico Del Celo, said international trade exhibitions offered Nigerian businesses opportunities to connect with prospective partners and explore new markets.
Del Celo noted that succeeding in Nigeria’s business environment required patience, knowledge of the market and credibility, despite the country’s significant commercial potential.
He commended the Nigerian-Indonesian Chamber of Commerce and Industry for assisting his company’s expansion and connecting its members with international business opportunities.
