The Minister of State Petroleum Resources, Chief Timipre Sylva, has challenged Indigenous Petroleum Producers Group (IPPG) to take advantage of the ongoing divestments by International Oil Companies (IOCs) to significantly increase their investments in oil and gas assets in the country.
Speaking as chairman and special guests, at the Nigerian Association of Petroleum Explorationists (NAPE) divestment workshop with theme
The Big Sale:Opportunities In The NIgerian Oil & Gas Industry From Asset Divestments, in Lagos, Chiwf Sylva said IPPG should see the divestments by IOC in oil and gas assets in Nigeria as opportunity to step in to fill the gaps in the sector.
According to him “The Indigenous Petroleum Producers Group (IPPG) and other potential investors, should therefore perceive the IOCs’ divestments in some of the upstream assets as opportunities, rather than a threats, to become more involoved in the development of the Nigerian upstream petroleum sector”.
He urged IPPG members to strive to move their present contribution “in production and reserves to at least 50%, from about 30% for crude oil and 20% for gas producton, as well as 40% and 32% for oil and gas reserves, respectively”.
Sylva, who spoke virtually stated that the Federal Government was desirous to create the enabling environment for IPPG and other interested parties to play big in the ongoing divestments in the sector.
“To facilitate this, the Ministry of Petroleum Resorces, in fulfilment of its mandate to “Promote an enabling environment for Investment in Nigerian Petroleum Industry” as enshrined in Section 3 (e) of the PIA, is setting up a one-stop Oil and Gas
Investment centre to create an enabling business environment for would-be investors,” he said.
He assured potential investors “that divestments will be adequately managed to ensure that Nigeria remains a prime destination for competitive oil and gas business. We will continue to listen to our stakeholders to ensure the right steer for our industry”.
The minister maintained that despite the worldwide clamor for transition to renewable energy sources, “it is certain that anticipated economic growth and rising global population, especially in Asia and Africa, will significantly push energy demand upward to a level that renewable energy sources only
cannot meet by 2050. As global energy consumption grows, it is apparent that Oil and Gas will remain significant components of future energy mix”.
“Therefore, there is ample opportunity for profitable investments into the Nigerian Petroleum Industry, with its enormous Oil and Gas reserves of over 37 billion barrels and about 209 trillion cubic feet (TCF) respectively,” he stated further.
Sylva said the passage and signing into law of the Petroleum Industry Act in 2021 (PIA) has cleared the path of every possible obstacles that would have hitherto hindered investment in the oil and gas sector adding that “the PIA is a supply-side enabler, crafted to provoke and trigger commercial interests and investments in the Nigerian Petroleum Industry”.
He stated further that “The Act also has generous incentives to enable development, distribution, penetration, and utilisation of oil and gas”.
The minister noted that the “discussion on the divestment in Nigeria’s oil and gas is highly crucial at this critical time in the Nigerian oil and gas industry”.
Sylva traced divestment in Nigeria’s upstream oil and gas sector by IOCs to 2006 adding that it increased in 2010 mainly due to the hostile environment arising from the menace of crude oil theft.
“This, without doubt, made some IOCs to re-balance their portfolios to take advantage of the incentives for offshore oil and gas development under the Deep Offshore and Inland Basin Production Sharing Contract Act and PIA, and to avoid host community issues related with onshore and shallow water leases and licenses,” he said.