How to attract foreign direct investments in petroleum sector, by PETAN

The Petroleum Technology Association of Nigeria (PATAN) has emphasized the need to create good image for Nigeria through institutional transparency, well articulated policy consistency, building of enabling infrastructure and improvement of operating environment security, in order to attract more foreign investors to take advantage of opportunities abounding in the Nigerian oil and gas industry.

President of the association, Mazi Bank Anthony Okoroafor, gave this advise in a communiqué issued at the end of PETAN participation at the just concluded Offshore Technology Conference (OTC) in Houston, Texas.

According to him, there is need to restructure the country’s oil and gas industry operations by simplifying access to assets, maintaining sanctity of contracts, instilling corporate governance in all our dealings and reducing overall project costs for cost effectiveness.

He noted that it is imperative to encourage creativity and opportunity for partnership among Nigerian companies in order to scale up to big projects in the face of current complex industry challenges.

The PETAN chairman stated: “Government must reduce Contracting Cycle from three to four years to 6 months. Industry to partner with Government to sort out the above ground risks in the Nigerian oil and gas industry. investment friendly and competitive operating model is needed as a matter of urgency now. PETAN would partner with Nigerian National Petroleum Corporation (NNPC) to grant seal of competence and quality to oil industry service companies to certify service companies and create service champions in each service category. This will help to grow capacities in the country that can be used in any part of the world”.

He stressed the need for Nigerian Content Development and Monitoring Board (NCDMB) to take steps to help Nigerian Companies survive the current industry downturn and oil price collapse so that they will be around when the industry cycle turns around. “Cabotage Laws should support Nigerian Content more. It should be further providing the enabling environment for growth in Nigerian participation in maritime and ownership of vessels. A special goal is to have Nigerian owned vessels transport Nigerian crude, which is not happening presently”.

He called on the need for government, regulators and stakeholders to remain focused on the goals of the Nigerian Content Law. Progress has been achieved, but more work needs to be done. “We should build strong and experienced Nigerian companies to help drive down the cost of services deliveries. Nigerian Companies should be supported so they can scale up to big projects. Scale up economics on Big projects through local content collaboration and consortia (Korean model)”, he added.

Collaboration between government/policy makers and private sectors, he noted, would further entrench the gains of the Act. Funding is a major impediment to the growth of Nigerian Content. The Nigeria Content Fund (NCD) Fund must be applied as intended to support Nigerian service providers and to help them scale up to bigger projects. Policy makers should remove the blockage that prevents access to the funds by PETAN companies and others. Finance long term capacity with the NCF”, he said.

Okoroafor also stressed need for NNPC, International Oil Companies and National Oil Companies to partner with PETAN to create a system of managing talent for the future. “Experience alone will not only lead us to 2020, rather a blend of experience plus new talent. There is need to aggressively grow our reserves with a smart funding model for exploration and development activities. Nothing has been added to our reserves in the last ten years”, he added.

He stated: “PETAN remain committed to the development and growth of the Nigerian Oil and Gas industry, and by extension the Nigerian economy. Just as Americans developed America to its economic greatness today, it is Nigerians that will develop Nigeria and that is what PETAN stands for.

“Whenever there is turbulence of militancy in the Niger Delta, the multinationals and foreign investors may run away. It is we Nigerians, especially PETAN members, who risk our lives to sustain production and the Nigerian economy. In the current challenging energy price environment, we are willing to make necessary sacrifices to sustain the industry towards a viable, stable, prosperous future for all”,