The FINANCIAL — According to Gulfnews, Dubai World has signed a Dh58.7 billion ($16 billion) agreement with the government of Nigeria to develop oil and gas infrastructure in the country.
Nigeria is Africa's top crude producer, churning out around two million barrels of crude oil each day.
It is likely that the agreement will focus on the upstream oil and gas sectors and the development of gas utilisation projects.
Dubai Natural Resources World (DNRW), created in 2005 under the umbrella of Dubai World, will manage the development and production of crude oil and gas reserves.
This is DNRW's first significant announcement of this kind.
Investment opportunities in this sector have now opened up due, in part, to the global financial crisis, industry experts.
"Given the credit crisis, a lot of oil companies are not rushing in to invest and so there is a role for companies with access to cash to expand at the moment," Kate Dourian, editor of Platts Middle East, said.
Dourian also said Africa and central Asia are key areas companies are looking at for potential investments.
Companies like Dubai World which don't need to go to the financial markets are more able to invest in new areas.
While it's harder for oil companies to justify huge spending right now, especially in high-risk areas such as Nigeria, the opening is there for smaller start-up companies with access to cash, Dourian said.
Michael Aondoakaa, Nigeria's justice minister and Sultan Ahmad Bin Sulayem, chairman of Dubai World, signed the agreement on Thursday in the Nigerian capital, Abuja.
"This historic agreement consolidates Dubai World's strategy of tapping new business sectors leveraging the expertise of the group's various companies to make sound, strategic, long-term investments in the field of energy and natural resources. Nigeria is a land of considerable opportunity and it is entirely appropriate that Dubai World will partner with the Government of Nigeria to help harness this enormous potential over time," Bin Sulayem said.
The agreement also includes investment in the sectors of agriculture and power.
The lack of development in the Niger Delta has been a sore point among militants who sabotaged the country's oil industry in 2006, shutting down a fifth of Nigeria's crude output.