The Nigeria National Petroleum corporation (NNPC) Says the NNPC is Set to revisit terms of Production sharing contracts of offshore oil and gas companies reports from the groups website indicates.
Ohi Alegbe the groups GM, group public affairs writes that NNPC is set to revisit the fiscal terms of the existing Production Sharing Contracts, PSC entered into by the Corporation with some International Oil and Gas Companies with a view to seeking favorable benefits to Nigeria based on prevailing realities in the industry.
Speaking on Tuesday at the France-Nigeria Business Forum organized to mark the State Visit of President Muhammadu Buhari to Paris, France, Dr. Ibe Kachikwu, Group Managing Director of the NNPC disclosed that in the weeks and months ahead, the Corporation will be re-negotiating the contracts to extract as much benefit as possible for Nigeria.
Dr. Kachikwu said that though the PSC agreements are firm contracts which should be adhered to, the NNPC is allowed to make use of the window which creates space for re-negotiation.
“We intend to begin the process of the re-negotiation of the PSCs to see what value chain and improvements we can have from these contracts. Some of the contracts were negotiated over 20 years ago and they have since been overtaken by new realities in the industry,’’ the GMD said.
He however noted that in carrying out a review of the existing PSCs, care must be taken not to create an anti-investment atmosphere as that may be counterproductive to the industry.
On the status of France-Nigeria relations in the oil and gas industry, Dr. Kachikwu noted that though the French have a firm presence in the Nigerian petroleum industry, there is still room for French companies to rev up their presence in the refining areas where Nigeria currently needs support.
“There is no country in Africa that has the kind of resource base Nigeria has; so France really needs to get more bullish if they want to compete in Nigeria with the very aggressive India, China, Germany … It’s a huge competition and I am looking forward to better days ahead,’’ he said.
On the ongoing reforms of the Nigeria oil and gas industry, the NNPC GMD stated that the global oil and gas community is showing unmatched excitement about the re-invigoration of the industry.
“ There is a lot of interest in our quest to seek joint ventures across the value chain; there are huge potentials across board and all we need to do is to galvanize the efforts to get the best out of it,’’ he said.
Dr. Kachikwu noted that President Buhari’s vision for the industry is absolutely on track. “It is being honed every day: there is focus, transparency and diversified income streams’’.
Unbundle PIB now:
In another development stakeholders in the oil and gas sectors wants the unbundling of PIB for effective operation of oil sector writes business day, in addition, the relevant section of the extant Petroleum Act should be amended to meet the current realities globally and position Nigeria to be globally competitive as an oil and gas country.
According to them, the industry can effectively be operated without necessarily waiting for the passage of the bill, which has been stalled in the National Assembly. The non-passage has stalled investment in the oil and gas industry for more than six years now.
The stakeholders also proposed that the government should take a bold step to reduce the contracting cycles for services and projects to three months and nine months, respectively, within the sector.
The contracting circle is the longest compared with other countries like Angola. In Nigeria, it takes about 36 months to complete with it attendants consequences on cost of projects and investments, while it takes just about eight months in Angola.
The stakeholders, under auspices of the Nigerian Association of Petroleum Exploration (NAPE), also frown at the situation in which lack of clear and coherent policies on gas-to-power had significantly hindered the integration of and long-term investments required to ensure the supply of gas-to-power plants.
Chikwendu Edoziem, president of NAPE, who made these known while unfolding the events planned for the upcoming annual international conference and exhibition, scheduled for November, also recommend that government should accelerate the funding of and completion of new gas projects in the western axis of the Niger Delta to immediately add about 2000mm standard cubic feet scf/day of gas production for the purpose of enhancing power generation in the country.