Create enabling environment for investment to strive, expert urges new NNPC GMD
Qn oil and gas expert, Mr Chikezie Nwosu has advised the new Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari to ensure a more conducive business environment to boost investment in the country.
Nwosu, former the Chairman, Society of Petroleum Engineers (SPE) Nigeria Council said in an interview with TBI team in Lagos on Wednesday that Kyari set standard for the industry.
He said ensuring a conducive environment for investors would drive the socio-economy growth and investments in the oil and gas sector.
According to him, the most critical things the GMD can do is to attract investments in the Nigerian oil and gas industry by creating an environment that builds confidence, stability and profitability for investors.
Nwosu said that there was need for the Kyari-led administration to focus critically on some policy areas.
This, he noted were the Petroleum Industry Bill (PIB) in its four component form and the seven ‘Big Wins’.
The expert said the seven ‘Big Win’ icludes the establish the National oil and gas policies, regulatory framework, corporate governance, downstream, Nigerian content, transparency of NNPC’s operations and among others.
He said, “Basically, ‘same old, same old’, which has now become so urgent that real action in 2019 must happen.
“PIB is the single most important area that needs to be accelerated while others will follow.
“Also, unlocking the refining potential, gas utilization such as GBI, G2P, Regional gas delivery etc.
“Host community development, opening other hydrocarbon basins like the Benue Trough, Chad basin and expanding investment opportunities in the Anambra basin.”
The expert said that refining technology was not rocket science adding that an effective and focused strategy with proper execution could deliver the domestic and export refining needs by 2030.
“Take a cue from a company like Waltersmith and how efficiently it is delivering on the Ibigwe modular refinery.
“We can replicate this across the country, including modernizing or completely rebuilding the existing refineries.”
Nwosu advised Kyari to find a business model that guarantees end user payment of domestic gas use, reflective of the volatility in exchange rates between the currency of investment (typically the USD) and the currency of payment (the Naira).
He said that the first step is to make assets that have predominantly dry gas (no reliance on a condensate stream) profitable – before stability in the domestic gas market is achieved
He urged government to incentivizing tools like tax holidays, some manner of ‘subsidies’ (which can come in the form of reduced or deferred royalty payments, production allowances etc.) and most importantly, securitization of payments, will be great enablers.
He said that Kyari had already noted that we must vigorously pursue frontier basins – new technology can unlock erstwhile commercially challenging hydrocarbon resources.
“We need to remember that at some time shale oil and gas were commercially unattractive, but fracking and other related technologies developed rapidly to address this. Same approach can be adopted for the frontier basins.
“Stakeholders and professional organisations need to be pulled into a government ‘Think Tank’ affiliated to the NESG and the National Economic Council.
“They have gotten the resources, technical and commercial knowhow, international perspective and connections to support government in revamping the economy leveraging on the vast oil and, especially gas, resources, Nwosu was quoted saying.
Nwosu commended President Muhammadu Buhari for appointing through bread industry personality to take over from Dr Makainti Baru who retired having served meritoriously.
He Kyari is a brilliant geologist who is an excellent fit for the GMD NNPC position, saying “the President could not have made a better choice.
