The reliance in oil and gas investment has been identified as the quickest way of achieving economic recovery in Nigeria.
Mr Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), said at the ongoing 2024 Offshore Technology Conference (OTC) in Houston, Texas, on Monday.
He said Nigeria’s country’s huge oil and gas deposit would mean nothing if they remained on the ground and were not tapped.
The minister said that oil would remain relevant for a long time and that the Federal Government was creating an enabling environment that will attract the best of investment.
He reiterated that when the government of President Bola Tinubu came on board, he took some strategic initiative in the sector, which is today changing the narrative, and disagreed that oil could remain irrelevant.
He urged investors to take the opportunity of the oil bid round to make investment.
“Historically, no source of energy goes away. So, do not be deceived that fossil fuel will go away.
“Talks at the recent global conferences have further proved that fossil fuel will continue to remain, the quicker we extract our oil, the better for us as a country,” Lokpobiri said.
‘’We are here at OTC to show the rest of the world that Nigeria is different and our government is different, in creating the best regulatory framework, allowing competitiveness, and removing all the investment barriers.
‘’Today, we are restoring investment confidence in the sector.
“Investors can bring in their funds without worries. We are showing the world that Nigeria is ready for business,” he added.
Lokpobiri, however, announced the abolition of signature bonus payment to the government by new investors in the oil and gas sector.
Signature bonus is a single, non-recoverable lump sum payment by the license holder to the government upon the granting of a petroleum exploration licence.
According to the minister, over the years, the payment of signature bonuses remains a huge bottleneck for investors.
“Stakeholders had explained that globally, payable signature bonus by awardees of an oil bloc or marginal field rank highest in Nigeria.”
He added that on many occasions, the huge amount involved in payment of signature bonus was a setback for investors.
He said that to ensure investors had a soft landing, such payments would now be tied to immediate exploration and production activities by the new entrants.
‘’Rather than pay such monies into the coffers of the federal government, the investor must now be able to prove to us that they have the funds required to move into exploration.
“What we have resolved going forward and with 2024 oil bid round is to see that fields won in a bid round must be put into immediate use as against what obtained in past where fields are left idle after assets are won.”
He said the new strategy would ensure the creation of jobs and boost activities in the upstream oil sector.
