Seplat cites operating terms, domgas pricing as investment baits
Sopuruchi Onwuka
Nigeria must offer attractive operating terms and reform the domestic gas market in order to attracts the required level of commercial investments in revving up activity and delivering prime economic aspirations in the petroleum industry.
Managing Director of Seplat Energy Plc, Mr Roger Brown, declared at the Nigerian Oil and Gas (NOG) Energy Week in Abuja that capacity of the Nigerian electricity supply industry to make effective and viable demand for gas holds immense potential in spurring investments in boosting internal supply.
In the upstream, he recommended fiscal and regulatory policies and programmes that would guarantee enhanced returns on invested capital as a way of offering reward signals to lure international and local investors into taking business decisions.
The Oracle Today reports that Nigeria’s petroleum industry is bedeviled with crippling investment apathy following simmering discontents over fiscal and operating terms especially in the gas exploration, production, processing and marketing.
The prevailing oilfield activity lull has resulted in stalled investments wild cat exploration and reserves building, field development and commodity production, midstream processing investments, and domestic market infrastructure development.
Mr Brown told delegates in Abuja that need for funding in the upstream and midstream segment of the energy sector in Nigeria would easily be overcome with a fiscal and regulatory guarantee for rewards to investors.
He made it clear that managers of international investible funds are constantly seeking reward signals from global operating environments, adding that relevant success stories from Nigeria would facilitate inflow of global capital.
He said attracting the necessary funding into the country would require regulatory reforms; fiscal terms restructuring; and congenial operating conditions.
: “Nigeria needs more success stories to attract more investments to the upstream sector. We need to solve the insecurity dilemma around the country’s pipeline infrastructure, enforce clarity and separation of powers among regulatory authorities, work closer with field operators to resolve host community issues, and amend fiscal terms of PSCs/PSAs to include more incentives for asset partners
“We also need to improve fiscal terms on gas contracts to support uptake at market reflective prices and improve efficiency and capacity of the Nigerian electricity value chain in order to aid higher uptake of domestic gas supply,” Mr Brown told the delegates.
On gas development investments in the country Mr Brown said financially strong company with robust balance sheet, low debt and credible access to international capital markets have an edge.
“Other factors are stock market listing and associated need for governance, with preference for dual-listed companies such as Seplat, where equity can be traded in liquid markets; international accountability and transparency in reporting, particularly as it relates to ESG reporting, with good commitment to sustainability; and good relationships in-country with government, regulators and local communities,” he stated.
According to him, Seplat Energy remains commitment creating and sustaining value in the Nigerian upstream sector, and have continued to do via strong investment work plan, host community development, partnerships with government and aggressive human capital development.
