Sylva seeks end to oil sector challenges as investments decline
Unless Africa focuses on developing sustainable technical and managerial skills in innovation, operations, and management of oil and gas resources, the continent may not achieve projected economic development, Minister of State for Petroleum Resources, Timipre Sylva told the industry stakeholders yesterday in Abuja.
Speaking at a session of the ongoing Nigerian Petroleum Summit, which focuses on “Widening the Integration Circle: Technology, Knowledge, Sustainability, Partnership,” Sylva insisted that there was need to introduce and harness new technologies and ideas that would attract and enhance inflow of foreign investments while improving success rates of indigenous business engagements.
Indigenous and international oil companies had called for urgent attention by the Federal Government in addressing lingering industry challenges, especially poor regulatory framework and harsh business environment, which may further bedevil investment climate and deter investors from the country.
Stressing that Nigeria cannot isolate herself from the current wave of the global energy transition, Group Managing Director, Aiteo Eastern E&P Company Limited, Victor Okoronkwo said creating a stable operating environment as well as establishing robust regulatory and fiscal frameworks remained critical to leapfrogging the sector to align with global realities.
Okoronkwo said: “Key energy industry reforms will be critical in boosting investor confidence and attracting otherwise elusive investments into Nigeria.
“To put our current reality into perspective, in 2018 while the Foreign Direct Investment to Africa rose 11 per cent to $46 billion, the FDI to Nigeria shrunk 43 per cent to $2 billion whilst Ghana received $3 billion. This is in contrast to the vast hydrocarbon resource base Nigeria is blessed, ”he said.
According to him, while energy transition has largely been driven by three key factors, while environmental, technological advancements and national policy realignments, climate change challenges would continue to shape global policy discussions with respect to actualizing less carbon-intensive scenarios.
Okoronkwo however noted that, given the diverse applications of hydrocarbon and hydrocarbon derivatives in support of human civilization and industrialization, fossils would continue to play a dominant role in the global energy mix in the foreseeable future.
He added that there remains a window of opportunity for Nigeria to realize its hydrocarbon objectives of 3MMbbl/d production and 40 billion barrels of reserves by 2025.
Geo political realities such as the bombing of the Saudi oil facilities and the current coronavirus outbreak would poses challenges to the industry.
Disclosing that over 90 per cent of petroleum products consumed in Africa are imported, Group Managing Director of Nigerian National Petroleum Corporation, Mele Kyari said Nigeria must do everything possible to fix existing refineries and support similar private sector investment.
Also, Managing Director of Nigeria LNG, Tony Attah, represented by his General Manager Production, Adeleye Falade, said following the robust Nigerian Content plan endorsed by the Nigerian Content Development Monitoring Board (NCDMB), 55 per cent of the engineering activities for its train seven would be carried out in-country and 55 per cent of all procurement for execution of the project would be undertaken by Nigerian vendors.
“100 per cent of the installations and construction will happen in Nigeria and the entire project will attract huge Foreign Direct Investment to the Nigerian economy,” he said.
Adding that the move would create up to 12,000 direct jobs at the construction phase as well as the associated skills, Attah said Nigeria’s growing response to the demand for cleaner energy sources to power the world has accentuated the critical role that nation’s premium crude oil and natural gas resources play.
Managing Director, Total E&P, Mike Sangster, noted that his company remains keen to continue to invest in Nigeria and to contribute constructively to the ongoing debate about the Petroleum Industry Bill.
He said the group would support efforts being made by the authorities to define a long term framework for the oil and gas industry that provides clarity and certainty, provides competitive terms and a win/win solution for the country and investors.
“We support the desire of the Honourable Minister to modernise Petroleum Legislation, and welcome the opportunity to engage with the authorities. A progressive PIB could be the catalyst needed for a new wave of investment in Nigeria instead of other countries and hence contribute to the sustainability of the Oil & Gas Industry.”
I conclude by thanking the organisers of NIPS for their dedication to excellence and urge all participants to consider being here today a part of our contributions to national development and so participate fully in as many activities as possible.