An article by Ejiofor Alike published 24 March 2015 by ThisDayLive.com
Shell Gives Conditions for More Investments in Nigeria
Shell Petroleum Development Company (SPDC) has given conditions for it to invest in Nigeria, saying that though it has divested assets, it is also ready to invest more than it has divested if the operating environment is right.
Speaking at a special panel session of the recently concluded Nigeria Oil and Gas (NOG) conference in Abuja, the new Managing Director of SPDC and Country Chair of Shell Companies in Nigeria, Mr. Osagie Osunbor said his company was committed to long-term presence in Nigeria.
Osunbor said even though his company had divested, it is ready to invest more than it divested if the conditions were right.
He however, stated that for his company to invest more, the issues of security, funding and fiscal stability have to be addressed.
“I think as a country what we have to be very mindful about is that we don’t completely focus on how we share the cake but focus on how we make the cake bigger. That for me is the key element of the whole fiscal stability side of the discussions. Elisabeth (Managing Director of Total Upstream Companies in Nigeria) made the point about the licenses and expiry of licenses. Many of these investments are in terms of billions, often money put forward by the private partners upfront. If the basic issue of the tenure of the licenses is not resolved, you can speak the whole day, nobody can commit the shareholders’ funds in these licenses,” he said.
Osunbor said the oil and gas industry has to be much more effective at making that point to the government about the need to provide this level of assurance for people to invest in the country.
He further stated that Nigeria’s operating environment is very uncertain, with multiple bodies implementing conflicting regulations.
“I am convinced that given the long term presence we all have in this country, at whatever level, whether in the United States, The Hague; in Paris and in China, everyone thinks of a long term presence in Nigeria and there is no better way to assure long term presence in this place as assuring that you have local capacity; if you don’t have local capacity, after a while, you withers,” Osunbor added.
He also noted that Nigerian independent companies can bring a lot on the table as they do things differently from the International Oil Companies (IOCs).
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Nigeria: Shell Lists Challenges Undermining Transformation Success (Vanguard)
By Clara Nwachukwu, Michael Eboh and Grace Udofia
Abuja — As robust as Federal Government’s current transformations in the energy sector may appear, the Shell Group has identified a number of challenges undermining the success of the reforms.
These are security, crude theft and pipeline vandalism, as well as funding, fiscal stability and predictability, lease predictability and a host of others.
Shell said that these factors are not only increasing the industry’s operating costs, but also stalling further investments for greater economic benefits.
The Vice President, Nigeria and Gabon, Shell Upstream International, Mr. Markus Droll, identified the challenges while speaking on, “The Journey Towards Transformation,” at the just concluded Nigeria Oil and Gas Conference, NOG 2015, last week in Abuja.
He said: “We still need better security for workers in the oil and gas industry. As I speak, a considerable part of our operations are under strict security limitations. We still need a more effective counter-strategy against oil theft and sabotage. While we have directed even more resources to try to counter this menace, it has become a bigger problem compared to a year ago. The methods employed are even more brazen than ever.
“We still need better funding for capital projects and to clear pending payments on expenditure. We are very concerned about what impact the much lower oil price will have on 2015 funding. We still need more predictability around leases; if we increase certainty around leases, then investment becomes easier to attract.
“And we still need fiscal stability and predictability. This remains key in ensuring investors of all sizes can commit confidently, government revenues can be forecast reliably, and a capable service industry is maintained with a steady work load. As it stands, investors in Nigeria face very tough fiscal conditions.”
Optimism about the future
Droll disclosed that Nigeria’s enormous oil and gas resources is one of the major reasons the Shell Group remains optimistic about the country’s economic future, saying that its optimism and continued investments in the country is being fuelled by current reforms in the petroleum industry as well as the re-prioritising of energy issue across the economic value chain.
Apart from the nation’s growing gas sector, he noted that with the way issues were now being handled, “Nigeria will continue to develop, diversify and grow its economy.”
Already, he said that current investments by Shell Companies in Nigeria are expected to generate up to $5million annually for the next 10 years under the SPDC Joint Venture.
As a result, he said the companies, through various investment projects are now being positioned to support the country more through to its next level of development not only as an oil and gas producer, but also as an emerging market.
The TRUTH will set you FREE.
From an article by Prabhat Sakya published 24 March 2015 by The Motley Fool under the headline:
