By Udeme Akpan, Energy Editor & Obas Esiedesa

For Nigeria to attract needed investments into the oil and gas industry it must prioritize sanctity of contracts and check insecurity that has caused disruption in the transportation of crude oil to terminals, International Oil Companies, IOCs, have said.

The leaders of the companies in Nigeria who spoke at a penal session at the ongoing Nigeria Oil and Gas Conference in Abuja yesterday said though the enactment of the Petroleum Industry Act, PIA 2021, was a good start, it would not by itself attract investments into the sector.

The Managing Director, Shell Petroleum Development Company, SPDC, and Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor noted that while the PIA has provided clarity and stability on investment decisions, it needs regulations to make that happen.

“It is an absolutely welcomed Act. Is it perfect? No it is not. There will need to be regulations that will support the clauses in the Act to make it a lot more implementable and we would work with the regulator to make sure these regulations are fit for purpose and they actually support PIA as planned”, he stated.

Mr. Okunbor also stated that the “PIA is a necessary introduction but it is not everything. It has just been passed and the full impact will take sometime to be realized. When investors make decisions, there are a number of issues they take into consideration.

“Stability of fiscals and stability of investment regimes are very important elements like sanctity of contracts and issues of security of investments. So are issues about basic security. We heard a lot of the shared impact of the security situation in the Niger Delta and what it has done to both oil and gas production.

“Investors will take these kinds of issues into consideration, so while the PIA is welcome to at least fix that element that has to do with lack of certainty in the investment climate there are still other issues we have to put together to make our country a lot more attractive for investments”, he added.

Speaking in the same vein, the Chairman and Managing Director, Chevron Nigeria and Chairman, Oil Production Trade Section, Richard Kennedy and Managing Director & Chief Executive, Mr. Mike Sangster noted that while the PIA has improved fiscals more was needed.

On his part, Mr. Sangster pointed out that oil theft in the Niger Delta region was far beyond issues with host communities, adding that it was much more bigger than that and has grown into organized crime.

“The volume of crude being stolen is far more than the capacity of host communities. We have not produced our onshore field OML 58 since 24 of February because of pipeline vandalism”, he added.

He explained that while the Host Community Trust Fund would help in creating a stable playing field for the companies and the host communities it would not solve the crude oil theft.

“Security issues are a very concerning one and make investment decisions very difficult. The figures that are out there about the volume stolen are very concerning and they represent a huge revenue loss to the country. The issues have to be addressed and eradicated permanently”, he stated.  

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