Why oil sector needs big projects – Wabote

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Simbi Wabote

By Benprince Ezeh

AMIDST concerns that investments are drying up in the oil and gas sector in Nigeria, Simbi Wabote, executive secretary, Nigerian Content Development and Monitoring Board, NCDMB, is happy that the next big Final Investment Decision, FID, in oil and gas landscape is the NLNG Train 7.

Asked why investments in the oil and gas sector has been drying up over the years in Nigeria, Wabote told Realnews in an exclusive interview last week, that the situation is quite concerning because after EGINA Deepwater project in 2018, the next big, FID (financial Investment Decision) in our oil and gas landscape is the NLNG Train 7, which happened last year.

“This industry needs big projects to keep the economy vibrant and create opportunities for services companies, generate employment and grow local capacities.

“In my recent meeting with the managing director of Total Exploration & Production Company, I challenged international oil companies to emulate Total E & P, which despite concerns in the oil and gas industry had continued to invest in Nigeria.

“They need to show faith in Nigeria, in our Oil and Gas Industry and the economy because Nigeria is still attractive and rewarding for Oil and Gas Investments,” he said.

However, Realnews reports that the international oil companies in Nigeria has been hesitant about investing in the sector because of non-passage of the Petroleum Industry Bill, PIB.

In March, Senator Ovie Omo-Agege, deputy senate president, said on Wednesday that Nigeria has so far lost about $235 billion to the non-passage PIB by successive administrations in the country.

Omo-Agege who spoke at a one-day virtual national colloquium on the Petroleum Industry Bill organized by NewsGuru.com said the country was losing $15 billion annually as a result of the delay in passing the PIB.

According to him, Nigeria has lost significant amounts of potential investment to other African countries because the country now have one of the least competitive deepwater fiscal terms in Africa.

“As a result, Nigeria with more significant reserves has attracted very little investment, whereas Egypt, Angola and Ghana with about half of Nigeria’s reserves combined, have attracted more investment for new projects, because they offer more attractive deepwater fiscal terms to encourage investors.”

Some of the projects that have been put on hold and awaiting final investment sanction by investors in the country include the Shell-operated Bonga South West/Aparo field, Exxon’s Bosi, Owowo West, and Uge Orso fields, the Chevron-operated Nsiko field, and Eni’s Zabazaba field.

Together, these projects represent a reported USD 47.6 billion of investment and – at forecasted peak production rates – would add over 750,000 barrels of oil equivalent per day of production, an uplift of approximately 40% on Nigeria’s current rates of production, the deputy senate president said.

Realnews reports that the petroleum industry has been the backbone of the Nigerian economy and the highest contributor to the national wealth, accounting for about one third of the nation’s GDP, over 75 percent of government revenues and 95 percent of foreign exchange earnings for the country.

Realnews reports that the oil and gas sector has been operated under outdated petroleum legal, regulatory and institutional structures. The current oil and gas code that governs the petroleum sector was adopted in 1969.

– Apr. 14, 2021 @ 19:33 GMT

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