We want domestications of big Oil and Gas projects in 2017
The expectation in the Oil and Gas industry in 2017 is high with operators anticipating that this year would be better than 2016. In an interview with Bank –Anthony Okorafor, chairman of the Petroleum Technology Association of Nigeria ( PETAN ) by Olusola Bello, Energy Editor, the PETAN chairman gives an insight into his association’s expectations from the government this year
What is the expectation of PETAN in 2017
As we begin 2017, there is renewed hope and expectations for our great country Nigeria. We already started well with the award of crude oil lifting contracts to eighteen indigenous companies by the Nigerian National Petroleum Corporation(NNPC). This was promised by Maikanti Bar, the Group Managing Director of NNPC last year. Both the NNPC boss and the minister of State for Petroleum have done well.
Just like Donald Trump insisting on Domestication of jobs in America, we as a country must insist on Domestication of jobs in Nigeria by insisting that all big projects must be done in-country to create sustainable jobs for Nigerians. We must leverage on proven Nigerian Companies.
In order to stabilize our oil and Gas industry, get more of our people employed, reduce poverty in our Land while creating more sustainable Nigerian entrepreneurs, there is urgent need to address the following in 2017.
How can sustainable peace agreement be reached with Niger delta militants?
Restoring sustainable peace agreement in the Niger delta should be our most important agenda on the table now. This should be treated with all urgency. Restore confidence on security of people and assets in the entire Niger Delta. In present-day Nigeria, Oil accounts for 95% of foreign exchange earnings and 75% of government revenue for Nigeria. The implication of extended militancy in this low oil price environment for a Nigerian economy which runs mainly on a single commodity is dire. This environment creates high risks. If $50/bbl. becomes the new normal, countries like Nigeria with large populations, low reserves and an over dependence on oil could become severely stressed. These are interesting times because the mono-product that Nigeria’s finances hang on is being threatened by this militancy. 95% of Foreign Exchange Earnings are tied to oil and with shortened revenues in dollars’ terms, the Naira will be under continuous pressure. E & P Operators are all suffering since the export pipelines are all down for several months. This creates collateral damage for the country, the operators, service companies and all of us.
What do you see to the complaints about the Sanctity of the Agreement with IOC’s and NOC’s
We will like to see the sustainability and function ability of this signed agreement on JV cash calls exit with oil companies by minister. Let sanctity of agreements is our cornerstone in 2017. We should avoid policy summersaults, ensure long-term view of the fiscal policies are in-place. Also, all Gas agreements must be honored.
Oil & Gas Policy
Let the ministers oil and Gas Draft Policies move from draft to real policies.
Use of NCD Fund to grow service companies
Let proper processes be set up for NCF use to build capacities where gaps exist. Leverage the funds to drive the change needed in NORGIC ACT, Ensure the process creates value, reduces cost and allow Nigerian companies to grow and unleash their full potentials. Let us use the NCF for serious step change operations like supporting the creation of the champions in each service sector.
EPCI Contracts
Let us all learn from Donald Trump that is pushing for domestication of opportunities in his country.We will like to see Nigerian consortiums leading EPCI contracts like is done all over the world. Lots of EPCI projects are coming like Zabazabar, Bonga SW etc. EPCI contracts still being controlled by international companies.Let the Deepwater modules create champions in fabrication, surf and well-delivery.
Let IOC’s and NNPC partner with great shipyards to build a very big shipyard in Nigeria to cater for African market – Build FPSO’s, Ships, Drilling Rigs – Create more than 100,000 jobs, enduring skills and entrepreneurial opportunities, Keep most fabrications shops busy.
What is your view about the debate on PIB by the National Assembly?
The Senate under the leadership of Bukola Saraki should Pass the Petroleum Industry Bill which favors transparency in mining leases and licenses, taxes, royalties and respect for institutional procedures, maximize returns from gas, with large scale investment in infrastructure and also end gas flaring, build a multi-stakeholder security system to stop crude oil theft as this secures production volume and vandalization. First of all, we want an environment that will attract investments, create opportunities and employment, and grow the economy. As long as the fiscal policies in the PIB are clear, consistent, auditable and sustainable, it will create what we are talking about.
Can you enlighten us more on PETAN seal of competence
We shall Launch PETAN seal of Competence (PSC) in conjunction with DPR and NAPIMS. We are trying to create the standard. Once we give you our seal of competence, you can do that job anywhere. That is a real way we can assure a measure of competence and capability within the country.
Let’s talk about logging. There is a competency matrix for delivering logging services. There is a beginner, middle and advanced level. You must pass through that process to receive the seal of competence. In that way, we’ve institutionalised this capability and confidence matrix. It is not based on intuition or subjectivity. It is clear and everyone knows what is required.
We are doing this to basically remove the briefcase carrying companies. Once we remove them, we can say that this guy is delivering logging services, this guy is doing well head maintenance, this guy is in fabrication, and everybody will understand their competency levels.
As we come to the beginning of 2017 with the attendant hopes and aspirations in our industry, we hope that the critical stakeholders will do the needful to put our industry in a great pedestal in 2017. On this note, I wish you all in our industry a prosperous 2017
How can the country grow more reserve?
Ring-fence Exploration budget. Be more aggressive with exploration to grow our reserve. This is the only way we can grow our reserves that are falling at an alarming rate
Do you support the clamour for more indigenous operators in the industry ?
Yes, the government should set dates for marginal field rounds. Create more indigenous Exploration and Production E&P) operators and give more reserves to Indigenous E&P operators that has demonstrated competence in managing their assets.