Oil Companies to Invest $15bn in Gas, Seek Competitive Fiscal Regime

Osinbajo asks operators to prepare for Nigeria’s destiny free from oil Egina’s FPSO homeward bound

Oil and gas companies operating in Nigeria have committed to invest $15 billion in Nigerian gas development in the next couple of years and have urged the federal government to ensure that the reform bills presently before the National Assembly are predictable and competitive to sustain investments.

The operating companies under the aegis of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI) said in a documentary yesterday to mark its 55th Anniversary in Lagos that no matter the complex and difficult operating environment, Nigeria’s oil and gas industry has opportunities for improvement and growth.

This is coming as the Vice President of Nigeria, Prof. Yemi Osinbajo, tasked the oil and gas producers operating in Nigeria to prepare the country’s destiny as the world shifts attention away from crude oil to clean or renewable energy.

Chairman of Total Upstream Companies in Nigeria and Managing Director of Total E & P, Mr. Nicolaz Terraz, also disclosed that the Floating Production Storage Offloading (FPSO) vessel for the 200,000 barrels per day Egina deepwater field being developed by his company, has sailed away from the Goeje South Korea yard of Samsung Heavy Industries (SHI) and is on its three months journey to Nigeria.

Speaking yesterday at the OPTS anniversary, the Chairman of Shell Companies in Nigeria and Managing Director of Shell Petroleum Development Company of Nigeria (SPDC), Mr. Osagie Okunbor, who is also Chairman of OPTS, stated that from being an organisation made up of three IOCs in August 1962 when it was formed, the OPTS had grown to a 27-member group, out of which 20 companies are indigenous Nigerian producers.

“The group was created in response to the budding oil and gas sector, which offered huge prospects for the emerging Nigerian nation. Nigeria had just discovered oil six years earlier in 1956. The history of OPTS then is the story of oil and gas exploration and production in Nigeria,” Okunbor said.

Okunbor explained that despite the challenging fiscal regime, security and environmental circumstances, OPTS has contributed significantly to the development of Nigeria as oil and gas revenue accounts for over 90 per cent of export earnings, 83 per cent of the federal revenue and about 35 per cent of the country’s Gross Domestic Product (GDP).

He said the oil and gas industries had also contributed billions of dollars to the Nigerian governments at all levels in taxes, levies, royalties, rents and licenses.

Okunbor noted that the 55th anniversary, which has “Nigeria, An Investor Friendly Destination,” as the theme, would give the Nigerian operators a chance to learn from the experiences of some of their key partners about how the changing landscape, globally and locally, is providing new opportunities.

“As complex and difficult as the Nigerian business environment may be described, there are opportunities for improvement and opportunities for growth. That is what we see in OPTS. Working with governments at all levels, we have the responsibility to get the right policies for our people and for the country,” Okunbor added.

In his keynote address, Osinbajo identified some of the challenges facing Nigeria’s oil and gas industry to include: security and environment, funding issues, high technical costs and obsolete legislations.

The Vice President, however, noted that the federal government is addressing these challenges.

According to him, President Muhammadu Buhari, had launched a roadmap to reform the oil and gas industry, stressing that the roadmap has set specific and tiOsinbajo also disclosed that the oil and gas industry would also benefit from federal government’s efforts to improve the Ease of Doing Business in the country.