The situation “on the ground” is a lot better today than it has been in recent years. By common consent the current Government which came to office in April 2011 has made important strides in improving transparency and reducing corruption. The serious civil unrest seen in the oil producing Niger Delta region, which at one stage cut Nigeria?s oil production to less than 1.5mm b/d, has substantially improved, although piracy and hostage-taking still occur. Oil production has consistently remained above 2mm b/d since 2010.

In spite of a number of “false starts” it looks increasingly likely a Petroleum Industries Bill may be passed into law in the near future. Whilst the PIB has had a number of re-draftings by different hands and perhaps lacks a radical edge to it, passage of the Bill would at least remove investment uncertainty which has been hanging over the industry for the past 4 years.

We also understand a new licencing round may be launched in the near future. This would be particularly welcomed by a number of the companies we will cover. Regular licencing rounds are particularly important to Nigeria?s indigenous E&P companies as a source of future growth.

There has been an uptick in corporate activity in the very recent past. Firstly, Heritage Oil partnered with local firm Shoreline Power to purchase a 45% interest in OML 30 from Shell and partners for a total of US$850m. Shortly afterwards Eland Oil & Gas was admitted to AIM, raising US$212m to purchase a 45% stake in OML 40 from Shell. Eland almost certainly benefitted from the interest generated by Heritage Oil?s high-profile entry into Nigeria. Finally, ConocoPhillips is close to concluding the sale of its Nigerian assets. We understand four domestic bidders have been preferred for the collection of assets. Some of the preferred bidders may require an international partner for technical and financing purposes, suggesting we might see another new high-profile entrant into the Nigerian industry. After years of relative dormancy the Nigeria oil & gas scene sprung into life in 2012.

Eoin Treacy's view Not that long ago much of Africa was not even considered a possible investment destination but that is changing rapidly as governance improves; albeit from a very low base. As one of the largest economies in Africa, Nigeria plays a major role as for those seeking to benefit from the evolution of the continent from an investment perspective. As a major population centre, commodity producer and home to a developing middle class Nigeria ticks a number of boxes from the perspective of a risk tolerant medium to long-term investor.

The Nigerian Index collapsed during the credit crisis to find support in the region of 20,000 where it ranged until late last year. It has held a progression of higher reaction lows since June 2012 and a sustained move below 35,000 would be required to question medium-term recovery potential. The Nigerian Naira has been pegged against the US Dollar since 2009.