By Ikenna Omeje
Total Exploration and Production Nigeria Limited has said it will restart the Preowei field development project, which was suspended in 2020, this year, if conditions allow, including the passage of a business friendly Petroleum Industry Bill (PIB) into law.
Preowei field, which is a deepwater hydrocarbon pool located north of the Egina field in Oil Mining Lease (OML) 130, off Nigeria, is expected to produce 50,000 barrels of oil per day, at peak, when completed and it starts producing.
The Country Chair and Managing Director of Total E&P Nigeria Limited, Mike Sangster, stated this in a chat with THISDAY on issues in Nigeria oil and gas industry..
“In 2021, the focus will remain on managing our costs and delivering on our ongoing investments, such as the offshore Ikike Project – which is progressing well. We did suspend some projects in 2020, such as the Deepwater Preowei field development, we hope to restart this in 2021 if conditions allow, including a win-win PIB.
“In addition, we continue to look at ways of reducing our carbon footprint as Nigeria and the rest of the world continues to demand more reliable, affordable and cleaner energy”, Sangster said.
Speaking on the oil and gas industry performance in 2020, he said that the Russia/Saudi price war, followed by the impact of Covid-19 pandemic, affected demand leading to drop in oil and gas prices.
Sangster said: “Companies all over the world, and in Nigeria, had to reduce spend quickly to cope with much lower revenues. In addition, we had to put in place a large-scale quarantine system to protect our operational sites from the virus in order to be able to continue to produce and keep our people healthy.
“Opec+ stepped up with significant production cuts which helped prices to recover from the lows of second quarter of 2020, but Nigerian producers had to reduce production significantly as part of the OPEC+ effort.
“However, despite the difficult economic environment, oil and gas still represented a very large part of the Federal Government’s revenues, so it was vital that operations continued. The industry also stepped up, under the leadership of the NNPC, to commit N21 billion to the government’s efforts to combat COVID-19.”
Discussing how the deepwater royalties stipulated in the amended Deep Offshore and Inland Basin Production Sharing Contract Act (DOIBPSCA) 2019 and related provisions in the Finance Act 2020, has led to significant drop in value of oil and gas assets and a slowdown in investment in the Nigeria oil and gas industry, he said: “New Deep-Water royalties implemented by the Federal Government in November 2019 and the New Finance Act, which was signed into law in February 2020, led to significant value erosion of oil and gas assets and a slowdown in investment.
“In addition, the uncertainty coming from the Petroleum Industry Bill (PIB), which does not appear to improve Nigeria’s attractiveness as an investment destination, will continue to stifle investment in the country.”
