The Federal Government has challenged the Indigenous Petroleum Producers Group (IPPG) to take advantage of the ongoing divestments by International Oil Companies (IOCs) to significantly increase their investments in oil and gas assets in the country.
The Minister of State, Petroleum Resources, Chief Timipre Sylva, speaking as chairman and special guest at the Nigerian Association of Petroleum Explorationists (NAPE) divestment workshop in Lagos, urged the group to see the exit by IOCs as an opportunity to step in to fill the vacuum in the sector.
The event was themed: “The Big Sale: Opportunities in the Nigerian Oil and Gas Industry from Asset Divestments.”
Sylva said: “The IPPG and other potential investors should therefore perceive the IOCs’ divestments in some of the upstream assets as opportunities, rather than a threats, to become more involved in the development of the Nigerian upstream petroleum sector.”
Sylva urged the IPPG members to strive 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.
The minister, who spoke virtually, stated that the federal government was desirous to create the enabling environment for indigenous producers and other interested parties to play big in the ongoing divestments in the sector.
“To facilitate this, the Ministry of Petroleum Resources, in fulfilment of its mandate to promote an enabling environment for investment in the Nigerian petroleum industry as enshrined in section 3 (e) of the Petroleum Industry Act (PIA), is setting up a one-stop oil and gas investment centre to 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 remains a prime destination for competitive oil and gas business.
“We will continue to listen to our stakeholders to ensure the right steer for our industry,” he added.
Sylva noted that despite the worldwide clamour for transition to renewable energy sources, it was certain that 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 cannot 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
He stressed that the passage and signing into law of the Petroleum Industry Act in 2021 (PIA) has cleared the path of every possible obstacle that would have hitherto hindered investment in the oil and gas sector.
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.