‘Why investment in Nigeria’s oil, gas is elusive’

Says partnership key to addressing refineries, downstream infrastructure
With over N3 trillion yearly losses due to the non-passage of the Petroleum Industry Bills (PIBs), the Nigerian National Petroleum Corporation (NNPC), yesterday, in Abuja, blamed the dearth of investment in the sector on the prevailing situation.

Reaffirming that investors will not invest their money if they were not sure of how they are going to get their investment back, Group Managing Director of the NNPC, Mele Kyari, like other stakeholders, insisted that the legislation remained critical to the nation.

With an intention to accelerate Foreign Direct Investment (FDI), Kyari expressed the determination of the Federal Government to work with the National Assembly and all other stakeholders to pass the long-awaited petroleum legislation considered to be capable of providing a win-win scenario for all players in the oil and gas Industry.

The legislation, which has been elusive for over two decades aims at addressing key challenges in the nation’s oil and gas sector, especially governance, transparency, accountability, fiscal terms, host community issues and others.

In his presentation at the 25th anniversary edition of the Nigerian Economic Summit Group (NESG), with the theme: ‘Rethinking the Future of Extractives’ Kyari said: “Getting the petroleum legislation passed is the right thing to do because investors will not invest their money if they are not sure of how they are going to get their investment back, and what benefits they can get from their investment, and how stable the investment climate is. We must resolve the petroleum legislation and i’m aware that this administration is working assiduously to get the law passed within the shortest frame of time”.

With the country’s inability to take Final Investment Decisions (FIDs) on some critical projects, Kyari equally stressed the need for partnership to address the infrastructure gap, especially in the downstream sector.

For Nigeria to make the most of its petroleum resources, passage of the petroleum legislation was imperative, as the bill has the prospect to guarantee a robust fiscal regime, protect the environment, ensure development of host communities, ensure proper alignment with other sectors and encourage investors to expand their investments in Nigeria, Kyari said.

According to him, the petroleum law, when passed, would create a robust fiscal regime that will make the nation’s oil and gas industry competitive, adding that International Oil Companies (IOCs) in the country would be spurred to invest more in the petroleum sector.

Meanwhile, NNPC said in a statement that it will collaborate with the African Export-Import bank (Afreximbank) or any financial institution willing to finance its critical projects, especially refineries rehabilitation, downstream infrastructure, including pipelines.

Kyari, who hosted the Executive Vice President of Afreximbank, Amr Kamel, and other top officials of the bank said: “we have a number of financing needs, it depends on how much you are bringing to the table. We need support particularly in refineries rehabilitation, depot optimization and pipelines financing.”

Speaking earlier, Kamel said apart from financing of refineries rehabilitation and other downstream projects, he also expressed interest in participating in some other projects such as the Ajaokuta-Kaduna-Kano (AKK) pipeline system.