Marginal Fields: NAPE Tasks FG On Energy Funding, Data Availability To Support Independent Operators

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By Oluwatoyin Bayagbon

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Mrs Patricia Ochogbu, President NAPE

The Nigerian Association of Petroleum Explorationists (NAPE), have urged the federal government to provide needed support to independent operators as more opportunities open up in oil and gas exploration.  

Patricia Ochogbu, NAPE President who made the call at a media briefing on Wednesday in Lagos, said many of these indigenous companies are ready to take up the emerging opportunities in the nation’s oil and gas industry but are hampered by funding and other structural factors.

Explaining that the terms of regular bank loans are not sustainable for companies who need funding for their operations, Ochogbu said special “energy funds” or an “energy bank” should be set up by the government to help the beneficiaries thrive and contribute to the growth of the industry. 

“What I see here is opportunity for Nigerians. First E&P is a success story. Seplat is another example. So, there is enough space for everybody to operate,” she said. 

“You know that the IOCs business model may be different from the marginal field operators, they have different operating models, but the important thing is that we are Nigerians, and we are very ingenious. I have heard many success stories of the places that the IOCs thought that the volume (crude oil) is not up to their threshold and other people come in and they look at things with a different mindset and they try things out and it works out for them.

“Where government can come in is to make sure that there is funding. That is the advantage that an IOC has over a marginal field operator. I strongly advocate that the government puts something like an energy fund or an energy bank like the Bank of Industry so that funds will be made available to people who want to work. Not the kind of loans you get in the bank now at over 20% and you can not get it for more than 5 years.

“If you listen to First E&P’s story, they worked for almost 8 years before they sold their first oil. But if you go to the bank to get a loan, even a mortgage, you cannot get. If government is able to do that, that will help a lot.”

The NAPE president further said where the government may have challenges with funding, it should create an enabling environment for indigenous companies by streamlining taxes and also strengthen its data repository while making this data accessible to stakeholders. 

“A lot of people have ideas, a lot of people have what it takes to make something happen in the industry but if they do not have access to funds or if a big chunk of the funds will go into non-production type costs, then it becomes a problem,” Ochogbu said.

“What I can say to government is that they should create an enabling environment. One of the things that people do not talk so much about is the amount of taxes. The multi-level taxation that this industry faces. As you are looking for funding to do this, you are knowing that the federal government will take, the state government will  take, the council will take, even the community. So, government can help in that area and streamline the taxes and make the environment friendly.

“So, I will say that although government may not have money, they can create policies, they can look at taxes and just make things a bit easier for everyone.” 

The other area government can do something is to make sure that data is available. I think the DPR is a national data repository. If they can strengthen that area so that data is available. If data available can be freely shared at least for scientific discourse and scientific research, it will help the whole country. 

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Speaking on the association’s upcoming annual conference themed Petroleum Exploration and Production in a New World: What Next After the Global Crisis, Ochogbu said the event which is slated for November 14 to 18, 2021, will be in hybrid format featuring some virtual sessions and headline programmes, including a pre-conference workshop, a management session, and technical sessions- all primed to “add value” to all stakeholders who will attend.

The theme according to her, is fitting in light of the impact of the COVID-19 pandemic on the oil and gas industry which manifested in low oil prices, supply glut and remote work options. 

The NAPE President noted that owing to its vast hydrocarbon and mineral resources, Nigeria’s prospects remain bright in light of the energy transition discussions, and these opportunities will be fully highlighted at the conference.

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