Total expresses concern over continuous drop in investment in Nigeria’s oil industry

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By Mordi chukwunonso Esther 

Total Nigeria Plc has expressed concerns over the continuous drop in investment in the Nigerian oil and gas industry despite the country’s huge hydrocarbon deposits.

The managing Director of Total Nigeria, Mr. Mike Sangster, Speaking at a management session during the recently held 38th edition of the international conference and exhibition of the Nigeria Association of Petroleum Explorationists (NAPE) monitored by punch correspondent, said that Nigeria had only benefitted from less than five per cent of all investments in oil and gas in Africa between 2015-2019 despite having the largest reserves in the continent.

Represented at the session with the theme: “Future of Oil and Gas Industry in Low Oil Price Environment: Survival Strategies,” by the Deputy Managing Director, Deepwater, Total Nigeria, Mr. Victor Bandele, Sangster pointed out that the five per cent represented only $3billion investment in the country.

He attributed the decline in investment in the nation’s petroleum sector to issues around uncompetitive fiscal terms, increasing cost of operations, unsettled deep water disputes, and upcoming deep-water lease expiry.

Sangster said: “A win-win PIB: Total is keen to continue to invest in Nigeria and willing to contribute constructively to the ongoing debate on the Petroleum Industry Bill. Permit me to contextualise Nigeria’s situation: Nigeria has only benefitted from less than five per cent of all investments in oil and gas in Africa from 2015 to 2019 despite having the largest reserves.

“That is to say that, the $3 billion invested in Nigerian projects which took Final Investment Decision (FID) between 2015 and 2019 represents only five per cent of all oil and gas funds invested in Africa.

No major investment decision was taken in Deepwater Nigeria from 2015 – 2019, despite a number of available potentially viable projects.

“Uncompetitive fiscal terms, increasing cost, unsettled deep water disputes, and upcoming deep-water lease expiry all contribute to increase the risk for investors and prevent new investments”.

He assured that his company would support the efforts being made by the Nigerian authorities to define a long- term framework for the oil and gas industry that provides clarity and certainty as well as attractive terms which translate to a win-win solution for the country and investors.

According to him, that would further attract more capital investment in an ever more competitive world, adding that a progressive, win-win PIB would no doubt be the catalyst needed for a new wave of hydrocarbon exploration and development investment in Nigeria.

On diversification and pursuit of new energies, Sangster stated that even before the period of heightened concerns about the COVID-19 which has brought about a reduction in global demand, firms and countries eager to reduce their carbon footprints had been out with strategies and an evolving energy mix in the shift towards cleaner energy.

He noted that the challenge for companies like Total was to strike the right balance between enabling the energy transition by investing in new energies such as solar and wind power while continuing to provide oil and gas to meet the needs of our customers and society.

“Consequently, in order to respond to the current global crisis, we need to manage through the uncertainties and seize the identified opportunities. The overarching message here is: Let’s develop Nigeria’s abundant resources now, before it is too late.

“Total is part of the solution to climate change with a commitment to delivering reliable, affordable and clean energy to the population. We have made important investments locally in this area and implemented several initiatives that are already impacting the Nigerian energy landscape positively,” the Total boss added.

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