By KUNLE KALEJAYE
Marginal field operator, Niger Delta Exploration and Production has decried the multiple taxes levelled against indigenous operators by the Federal, State and Local Governments, saying that the poses serious threatened their operations.
A Marginal Field is a well that is close to its end of commercial life. The production rate of the field is usually low.
The Managing Director, Niger Delta Exploration and Production Mr. Layi Fatona, said these multiple taxes have not only rendered marginal filed business unattractive to prospective investors, but also a major challenge confronting marginal field operators in the country.
He told news men in Lagos that there should also be timely agreements between lease holders and government agencies in all marginal filed operation, while also calling for duty waivers and tax holidays to enhance their competition.
“Government should assist indigenous marginal field operators through import duty waivers and tax breaks, and also improved local bank involvement by reducing rates,” said
In spite of the plethora of challenges, Fatona argued that marginal field operators have continued to contribute to the growth of the Nigerian economy, whilst expanding the oil and gas operational frontiers.
He said that indigenous operators contributed about 10 per cent of the nation’s total oil production, with only eight out of the 24 marginal fields brought on stream in the last 10 years of their operations.
He cited, “Poor Technical competence, fluctuating assistance from foreign equity partners and low funding capacity of indigenous players pose serious concern,” as part of the challenges, and urged the Federal Government to promote greater indigenous participation in the petroleum industry through more favourable policies.
He equally noted that Indigenous companies are confronted with legislative, financial, logistical and technical challenges on their first oil or gas production.
Nigeria has proven oil reserves of 37.3 billion barrels, four billion barrels of condensates, 187 trillion cubic feet, TCF, of proven gas reserves, with current average daily production of 2.5 million barrel per day, which he said can be improved if marginal field operations were enhanced.
According to him, “From 1987-2007, over 53 indigenous companies were awarded licenses to operate leases in the Niger Delta and Anambra Basin, when production from Nigerian indigenous companies stood at about 259,665 bopd.”