The Federal Government says it is working on reforms and policies to attract and retain investments in the oil and gas industry in view of the increasing competition in attraction of capital into the sector as many African countries have become oil producers.
The Vice President, Prof. Yemi Osinbajo, stated this yesterday at the 55th Business Anniversary event of the Oil Producers Trade Section (OPTS), an arm of the Lagos Chamber of Commerce and Industry (LCCI) in Lagos.
Osinbajo highlighted government’s achievements in the oil and gas sector despite the challenges oil price crash posed in the last three years as well as the prevailing issues and what the government is doing.
He said: “OPTS has a rich heritage of promoting the best interest of the upstream oil and gas sector of the Nigerian economy. It has the largest private sector investment and participant our nation. We all owe you a debt of gratitude for the positive contributions you made through the years.
“The theme of today’s event “Nigeria: An investor-friendly destination” is in line with government’s plan of transiting to the next chapter of maximizing our resources for the development of our nation.”
The Vice President highlighting the performance of the oil and gas industry said more than ever, Nigeria needs closer collaboration with OPEC and non-OPEC in curbing oil production. All market sentiments have improved since OPEC and non-OPEC announced output cut.
He noted that besides oil price slump, Nigeria’s upstream oil and gas industry challenged by the menace of upstream assets vandalism, which reduce production from 2.2 million barrels per day at the beginning of 2016 to all time low of less than a million barrels per day. The situation made upstream players especially the indigenous firms suffer.
“However, government has embarked on sustainable engagement with stakeholders in the Niger Delta and production has ramped up to 1.8 million barrels per day including condensate. The incremental production being achieved with the peace in the Niger Delta will help the government achieve a pathway towards the implementation of incorporating the Incorporated Joint Ventures (IJVs). The IJV is a new sustainable funding model that will fully take over the funding of the Joint Venture operations with the multinationals as government exits cash calls, the counterpart funding for JV projects deemed unsustainable.”
He said government will continue to channel more energy in resolving the downstream issues once and for all, thanking the Nigerian National Petroleum Corporation for sustaining steady fuel supply nationwide.
He commended the achievement Local Content in increasing participation of Nigerians in the oil and gas industry, adding that local participation in the sector has increased by over 140 per cent in 2016 and expressed hope it would even increase further in 2017 and beyond.
On challenges, he said: “We, however, have challenges in the areas of security and environment, institutional capacity, funding of investments, high industry technical cost, obsolete legislation and fiscal regimes, downstream sector issues and infrastructure constraints. These factors underpin our approach and consideration in reforming and repositioning the oil and gas industry.
Other speakers include the President, LCCI, Dr Nike Akande, Chairman OPTS and Managing Director, NNPC Group Managing Director, Dr. Maikanti Baru, Shell Petroleum Development Company and Chairman, Shell Companies in Nigeria, Mr. Osagie Okunbor, Managing Director of Total Upstream Nigeria, Nicholas Terraz, Managing Director, Seplat Plc, Austin Avuru, among other.