Uncompetitive fiscal terms, increasing cost, unsettled deep water disputes, and upcoming deep-water lease expiry all contribute to increase the risk for investors and prevent new investments in Nigeria’s oil and gas industry, Mike Sangster, Managing Director of Total Exploration and Production Nigeria Limited, has said.
Sangster spoke recently at a management session of the virtual conference of the Nigerian Association of Petroleum Exploration, where he also said Nigeria has only benefitted from less than 5% of all investments in oil and gas in Africa between 2015- 20191 despite having the largest reserves.
He added: “That is to say that, the $3billion invested in Nigerian projects which took Final Investment Decision (FID) between 2015 and 2019 represents 5% of all oil and gas funds invested in Africa.
“No major investment decision was taken in Deepwater Nigeria between 2015 – 2019, despite a number of available potentially viable projects”
He expressed his company’s support for the efforts being made by the authorities to define a long-term framework for the oil and gas industry that provides clarity and certainty as well as attractive terms which translate to a win-win solution for the country and investors. He explained that the development will further attract more capital investment and catalyse needed for a new wave of hydrocarbon exploration and development investment in Nigeria.
He added that Total is part of the solution to climate change with a commitment to delivering reliable, affordable and clean energy to the population.
“We have made important investments locally in this area and implemented several initiatives that are already impacting the Nigerian energy landscape positively. Some of these include: Over 1.5 million people in Nigeria have been impacted from sale of 400,000 Total solar lamps since 2013 according to Global Lighting Off-grid Association estimates. Worldwide, 10 million people have been impacted.
“Out of our 577 service stations across the country, more than 77 have been solarised as at the end of January 2020. It’s an ongoing program and our target is to ensure that our stations become fully solarised. We have also deployed over 150 residential solar solutions across the country. Our investment in the NLNG from the beginning till now, is partly derived from our commitment to the production of cleaner and better energy”, he said.
He expressed that his company’s ambition is to become the responsible energy major and to get to net zero carbon emissions by 2050 by promoting the use of natural gas, biogas and hydrogen, investing in low cost oil and biofuels and low carbon electricity, mainly from renewables
He emphasised that Total continues to hold faith in Nigeria, adding that same spirit put paid to the company making the development of the 200,000 bpd EGINA field with 1st oil in 2018 at a time the ininvestment that led to the vestment climate was not the most appealing.
He said: “The Ikike development project is currently in progress with the drilling of development wells commencing in 2021”.
Nigeria, he added is crucial to the Total Group, accounting for around 10% of its equity production.
He added: ‘’Total has invested approximately 10 billion US dollars in the country from 2013 to date. We have also taken steps to drive down our green-house gas emissions; pursuing a zero-flare principle on all our new projects as is evident with EGINA, OML58 upgrade, OFON field and others. “Our faith in the country has also seen us maintain an annual CSR spend of over $40 million (USD). We maintain at least 19 MoUs with our host communities.
The MoUs facilitate a seamless delivery of sustainable development to our host communities.
“As we did in 2019, we just rounded off the commissioning of 14 legacy projects across the country and we are going to do more. This is aside from thousands of students’ scholarships and skills acquisition programmes that we maintain annually. The inaugurated projects include mammography centres, maternal and child referral centres, science lab theatres and women development centres, amongst others. We had to take up the challenge of virtually inaugurating the projects which became more relevant in the wake of the COVID-19 pandemic.