By Clara Nwachukwu

Given the volatility of the oil market amid global energy depression, the Petroleum Technology Association of Nigeria, PETAN, has identified contract sanctity and cost effectiveness as part of the measures to cope with current realities occasioned by low oil prices.

PETAN in a communiqué issued after the just-concluded annual Offshore Technology Conference, OTC 2016, held in Houston, Texas, USA, made available to Vanguard at the weekend, also said the move will enhance Nigeria’s image as being good for business.

The 16-point communiqué signed by PETAN Chairman, Mr. Bank-Anthony Okoroafor, also stressed the need to institute transparency and good corporate governance to boost the operating environment.

Critical issues: Critical issues raised in the communiqué include:  •The need to create a good image for the country and demonstrate that Nigeria is good for business through institutional transparency, well-articulated policy consistency, building of enabling infrastructure and improvement of operating environment security, in order to attract more foreign investors to take advantage of opportunities abounding in the Nigerian Oil and Gas industry.

• To restructure the Oil and Gas industry operations by simplifying access to assets, maintaining sanctity of contracts, instilling corporate governance in all our dealings and reducing overall project costs for cost effectiveness.
• To encourage creativity and opportunity for partnership among Nigerian companies in order to scale up to big projects in the face of current complex industry challenges.
• Government must reduce Contracting Cycle from 3-5 years to 6 months. Industry to partner with Government to sort out the above ground risks in the Nigerian Oil and Gas industry. Investment friendly and competitive operating model is needed as a matter of urgency now. PETAN would partner with NNPC to grant seal of competence and quality to oil industry service companies – to certify service companies and create Service Champions in each service category. This will help to grow capacities in country that can be used in any part of the world.
• NCDMB should take steps to help Nigerian companies survive the current industry downturn and oil price collapse so that they will be around when the industry cycle turns around.

Enabling environment

• Cabotage Law should support Nigerian Content more. It should provide the enabling environment for growth in Nigerian participation in maritime and ownership of vessels. A special goal is to have Nigerian owned vessels transport Nigerian crude, which is not happening presently.
• Government, regulators and stakeholders must remain focused on the goals of the Nigerian Content Law. Progress has been achieved, but more work needs to be done. Leveraging Nigerian Content in Oil and Gas has to go beyond oil.
• To build strong and experienced Nigerian companies to help drive down the cost of service deliveries. Nigerian companies should be supported so they can scale up to big projects. Scale up economics on big projects through local content collaboration and consortia (Korean model) Collaboration between government/policy makers and private sectors will further entrench the gains of the Act.
• Funding is a major impediment to the growth of Nigerian Content. The NCD Fund must be applied as intended to support Nigerian service providers and to help them scale up to bigger projects. Policy makers should remove the blockage that prevents access to the funds by PETAN companies and others. Finance long term capacity with the NCF (Banks are not funding the industry) Operate a new PETAN partnership service model (Contractor financing) NNPC/IOC/NOC’s to Partner with PETAN to create a system of managing talents for the future. Experience alone will not only lead us to 2020, rather a blend of experience plus new talents.
• To aggressively grow our reserves with a smart funding model for exploration and development activities. Nothing has been added to our reserves in the last 10 years. Adopt the NLNG and Seplat model in security of assets.