The federal government has challenged Indigenous Petroleum Producers Group (IPPG) to take advantage of the ongoing divestments by International Oil Companies (IOCs) to significantly increase their investments in oil and gas assets in Nigeria.
Speaking as chairman and special guests, at the Nigerian Association of Petroleum Explorationists (NAPE) divestment workshop Thursday, in Lagos, Minister of State Petroleum Resources Chief Timipre Sylva said IPPG should see the divestments by IOC in oil and gas assets in Nigeria as opportunity to step in to fill the gaps in the sector.
The workshop has as its theme The Big Sale: Opportunities in the Nigerian Oil & Gas Industry from asset divestments.
According to him “The Indigenous Petroleum Producers Group (IPPG) and other potential investors, should therefore perceive the IOCs’ divestments in some of the upstream assets as opportunities, rather than a threats, to become more involved in the development of the Nigerian upstream petroleum sector”.
He urged IPPG members to strive to move their present contribution “in production and reserves to at least 50%, from about 30% for crude oil and 20% for gas production, as well as 40% and 32% for oil and gas reserves, respectively”.
Sylva said the passage and signing into law of the Petroleum Industry Act in 2021 (PIA) has cleared the path of every possible obstacle that would have hitherto hindered investment in the oil and gas sector.
Sylva traced divestment in Nigeria’s upstream oil and gas sector by IOCs to 2006 adding that it increased in 2010 mainly due to the hostile environment arising from the menace of crude oil theft.
“This, without doubt, made some IOCs to re-balance their portfolios to take advantage of the incentives for offshore oil and gas development under the Deep Offshore and Inland Basin Production Sharing Contract Act and PIA, and to avoid host community issues related with onshore and shallow water leases and licenses,” he said.