June 8, 2009

Nigeria ’s oil industry defective, says Total boss

By  Oscarline Onwuemenyi

ABUJA -THE Chief Executive Officer of Total Worldwide, Mr. Christopher De Margerie, has urged the Nigerian authorities to fast-tract the reforms in the petroleum sector, even as he called for caution in its execution.
He observed that the operation of the Nigerian oil and gas industry was defective, with government owing international oil companies operating in Nigeria arrears of payments and taking so much time to approve projects.

According to him, Total was worried by some things like approval, investment decisions and payments, adding that the company supported the reforms in principle but was yet to know the details and their implications.

De Margerie was speaking on Friday when he met with officials of the Nigerian petroleum industry, which included the Minister of State for Petroleum, Mr. Odein Ajumogobia and Group Managing Director, Nigerian National Petroleum Corporation, Dr. Mohammed Barkindo, in Abuja .
He, however, observed that the crash in crude oil price in the international market presents Nigeria with a great opportunity to carry out the planned reforms in the oil and gas industry.

The Total boss explained that carrying out the reforms in this period of price lull, would position Nigeria to reap the benefits when the price of crude oil rebounds.

He said, “It is true that today there is low price for oil and gas and some people might tell you that it is not the right time.
“When prices are high, why change. When they are low, do not change and when they are in the middle, do nothing. Frankly this is an opportunity now, especially because prices are low.

Let us be ready to get structures that are more adaptive to the new world.”According to him, “We can certainly do better. Let us find out ways to improve things. We will be more than supportive of the reforms. We know you need to change; you cannot always do the same things.

“We have disagreements, but we want to solve them to be more efficient, more productive and become better partners that we are today. We can better work as friends. Some people think differently, but I believe it is easier to do it with friends, even when there are disagreements.

He added that the opportunities for developing our partnership could be better done with new structures. “In principle, we want to consolidate partnerships and make them win_win. We know what we have, but we do not know what is coming. Total is always for the good,” he said.

De Margerie acknowledged that the big drop in oil prices had forced many companies to look carefully at their investments, adding that even Total was suffering.

Nevertheless, he said his company was “extremely willing to develop the company and especially to not have those stop and go which is invest when the price of oil is high and you stop. That is the only way to lose money for Nigeria , NNPC and Total. Our clear message is not to stop.

“Sometimes, we need to delay to help our contractors to understand they need to be a little more decent on the prices of their services. And especially Nigeria which we consider one of the best opportunities for growth for Total, especially for the quality of relationship we are enjoying.”

Earlier in his welcome speech, GMD of NNPC, Dr. Mohammed Barkindo told the visiting Total President that the journey of the oil industry reforms had started with the submission of the bill to the National Assembly.

He further explained that the subsequent phases were also on course with the reconstitution of the NNPC management and bringing the management in line with the aspiration of government for NNPC to become a fully commercialised, capitalised entity that will operate along the entire supply chain and strengthen its partnership between NNPC and the international oil companies by incorporating the Joint Ventures governed by the Joint Operating Agreement.