Mr Mele Kyari, Chief Executive Officer, Nigerian National Petroleum Company (NNPC) Limited, has explained that the Petroleum Industry Act (PIA) will attract more business Investment to Nigeria.
Kyari disclosed this at the ongoing World Petroleum Congress on Wednesday, in Houston, Texas.
Kyari spoke on the theme tagged ” Building Partnership”, which he described as a key aspect of the oil industry’s operating model.
The NNPC boss said: “Our industry has been struggling with the fiscal environment in Nigeria, such as issues surrounding investors investing money and getting it back with returns they deserve and without fiscal stability and sanctity of contracts.
“This is what our new law has done to bring all these in focus to ensure that fiscal environment is very competitive with world class practices that you can find in stability and security.
” We have a robust partnership today working for us; we are also looking forward to more partnership.
” Partnerships are now required for energy transition in a way and manner that will secure energy security,” he added.
Kyari said that Nigeria and indeed NNPC had a long history of contributing to global energy security and sustainable partnerships, which is premised on commitments and trust that have been built together with partners for well over fifty years.
He added that Nigeria had renewed its commitment to attracting investments in the oil and gas Industry by the recent passage of the Petroleum Industry Act 2021.
He said the Act provides the needed improvements in fiscal and governance frameworks, emphasizes transparency and accountability as well as provides a level playing field for all players.
“This is indeed a new dawn for investors as well as our National Oil Company (NNPC), that is transiting to a commercially oriented limited liability company,” he noted.
On challenges, Kyari said today, our industry is faced with a multitude of challenges, one of which is the requirement for a careful balancing of the aspirations of energy transition and energy security.
He said that lack of investment capital for oil and gas is already creating energy crises around the world.
“Who would have ever thought that the price of natural gas could sell as high as 60 dollars per million British Thermal Unit (MMBtu),” he asked.
On energy and economic security, NNPC boss said it was important to pinpoint the fact that the energy and economic security of many resource- rich countries where dependent on the development of their hydrocarbon resources.
He said this is an important source of generating revenue, providing employment and alleviating energy poverty in these countries, while ensuring that the world never lacked the energy it required to function effectively.
According him, “Compounding result of all these factors is the stifling of supply sources, thereby creating a shortage of sustainable energy supply to the world.
” We have seen how building sustainable partnerships is working in the Industry with one of the recent example being the alliance of Canada’s oil sands producers to achieve the net-zero emissions, forced by the pressure to meet energy transition goals.
“There is a need to ensure sustainable partnerships between the oil and gas industry, host governments, host communities towards ensuring compliance with Environmental, Social, and Governance (ESG) principles.
” Indeed, all players in the global oil and gas Industry need to collaborate to create such partnerships for the development of the technologies and funding required to achieve energy transition while ensuring energy security and adding value to the shareholders,” Kyari added.
He said that the NOC’s as resource owners, need investment to derive economic value from those resources while investors need stable markets and regulations to make healthy returns.
He added that today, regulation is creating a capex gap, especially to those of NOCs where we see about 50 per cent reduction in investments.
He said that as technology, innovation, stiff competition for capital and market volatility continue to generate huge waves, the strength in our partnerships, as we transit, will remain our key survival strategy today and in the future.
He said: “Building mutually beneficial partnerships will therefore continue to be our key leverage in navigating global market uncertainties especially as we transit into a carbon neutral energy company.
“We also believe that building partnerships that work for everyone is key to global prosperity and that should be the main focus of Global Oil and Gas Industry.
The 23rd World Petroleum Congress (WPC) which started on Dec. 6 with over 5,000 participants from over 70 countries attending in person in the energy capital of the world.