The Federal Government has challenged Indigenous Petroleum Producers Group (IPPG) to take advantage of ongoing divestments by International Oil Companies (IOCs) to significantly increase their investments in oil and gas assets in Nigeria.
Chief Timipre Sylva, Minister of State Petroleum Resources made this known on Thursday at the Nigerian Association of Petroleum Explorationists (NAPE) divestment workshop in Lagos.
Sylva spoke as chairman and special guests at the event which has its theme as “The Big Sale: Opportunities In The Nigerian Oil and Gas Industry From Asset Divestments.
The Minister, in a statement by his Senior Adviser (Media and Communications), Mr Horatius Egua advised the IPPG to 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 IPPG and other potential investors, should perceive the IOCs’ divestments in some of the upstream assets as opportunities, rather than a threats, to become more involoved in Nigerian upstream petroleum sector development.
He urged IPPG members to move their present contribution in production and reserves to at least 50 per cent from about 30 per cent for crude oil and 20 per cent for gas production.
“As well as 40 per cent and 32 per cent for oil and gas reserves, respectively, ” he added.
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, in fulfilment of its mandate to promote an enabling environment for Investment in Nigerian Petroleum Industry as enshrined in Section three (e) of the PIA, is setting up a one-stop Oil and Gas Investment centre.
“This will create an enabling business environment for would-be investors,” he said.
He assured potential investors that divestments would be adequately managed to ensure that Nigeria remained a prime destination for competitive oil and gas business.
He said despite worldwide clamour for transition to renewable energy sources, anticipated economic growth and rising global population, especially in Asia and Africa, would significantly push energy demand upward to a level that renewable energy sources only could not 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 (PIA)in 2021 has cleared the path of every possible obstacles that would have hitherto hindered investment in the oil and gas sector.
He added that the PIA was a supply-side enabler, crafted to provoke and trigger commercial interests and investments in the Nigerian Petroleum Industry.
According to him, the Act also has generous incentives to enable development, distribution, penetration, and utilisation of oil and gas.
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.
