Indigenous firms’ annual investments may reach $1.5b by 2014

A ship loads crude oil at Bonga off-shore oil field outside LagosThe indigenous operators in the nation’s petroleum sector may be bracing up for a big challenge in the next few months, if the legislative framework is institutionalised as expected.

However, the operators who were apparently aggrieved with the delay in the passage of the Petroleum Industry Bill (PIB) alleged that some factions of the legislators might have hidden agenda on the proposed oil industry reforms.

Some of the stakeholders, who did not want their names in the print expressed fears that the industry might later crumble, if urgent actions were not taken to curtail the political intrigues trailing the progressive reforms.

“It is a shame that they cannot pass the bill over the years. Other African nations have initiated related bills and are now at the implementation stage, but if we call ourselves the giant of Africa and we cannot do as much as some of these countries have done, I believe it’s a shame,” a top official of an indigenous firm said.

The source confided in The Guardian that the indigenous firms were fully ready to take up investments both in the downstream and upstream sectors of the industry, but some factors relating to poor legislative strategies have become a major hindrance.

The source said that indigenous oil and gas development had increasingly been prominent since the introduction of the marginal field programme, and some of the companies had recorded tremendous improvement in terms of production outputs.

According to him, with the right fiscal and legislative provisions and support from the International Oil Companies (IOCs), production from Nigerian independents could top 250,000 barrels per day (bpd) by 2015/2016.

Besides, he noted that annual spend by indigenous players could top $1.5Billion by 2014/2015 and possibly some of the indigenous companies joining the current big five IOCs in the near future.

The Guardian learnt there are some major projects that are expected to buoy the local output (gas) in the next few years. These includes Utorogu/Ughelli Gas Plant Node 50 million standard cubic feet per day (mmscfpd), NPDC Oredo Plant and Pan Ocean Ovade Plant (100mmscfpd), Projects expected by 2014includes, Sapele/Oben Plant 150mmscfpd, Seven Energy Umutu Field with 70mmscfpd, Chevron Gas Plant Compressor by-pass (200mmscfpd), Forcados/Southern Swamp 100mmscfpd by 2015, Assa North/ Ohaji South 1bscfpd expected by 2016, Okan (300mmscfpd) by 2015 among others.

Another operator, who lamented the poor financing mechanism for the indigenous firms, called on all local operators to synergise on better financing options that would aid their operations.

He cited the lack of access to right financing options as one of the key reasons why indigenous firms are shrinking in the industry.

The oil industry chief also noted that the industry still lacked critical infrastructure for processing and production of oil, gas resources, hence the need for solid partnership that would enhance building of infrastructure that would aid production.

 

Information from Guardian was used in this report.

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