Shell, Total Energies Advocate Incentives to Boost Investments in Nigeria’s Gas Sector, Seek Review of Petroleum Act

By Derrick Bangura

Shell and Total Energies, two multinational oil and gas companies, have emphasized the need for the Nigerian government to provide some incentives to entice more investors into the country’s gas sector.

The multinational oil corporations (IOCs) particularly requested that the Petroleum Industry Act (PIA) be amended to give more transparency and better fiscal conditions for Deepwater gas investments, arguing that greater clarity on gas marketing terms would help to entice additional investors into the gas field.
The Managing Director, Shell Nigeria Exploration and Production Company (SNEPCO), Mrs. Elohor Alboni and the Deputy Managing Director, Total Energies Deepwater, Mr. Victor Bandele, jointly opined that such incentives were needed now that the country is moving aggressively towards gas, having chosen gas as Nigeria’s transition fuel.

They spoke at a panel at the ongoing sixth edition of the Sub-Saharan African Petroleum Exhibition and Conference (SAIPEC 2022) with the theme: “Fostering Collaboration to Create Cross Border Partnerships across the Oil, Gas, and Energy Spectrum”.

The topic of the panel session was: “IOCs: Dynamics of Sub-Saharan Africa’s Energy, Oil, Gas Industry, as We Strive to Low Carbon Future.”

Responding to a question on how the PIA would impact investment in low carbon economy in Nigeria, Bandele said, “So, there is a drive for gas. We are still asking for the terms of the gas, the terms for the marketing part of the gas, to be such that it would be extremely attractive for the investors.

“But when you look at the Act itself, it has brought a lot of clarity to the fiscal terms. So, all the investors can now come in and look at the terms and decide whether it is comfortable, that they feel good about it, and want to invest in this country.

“I think that the area that is silent in the Act that I want to really point out is the one around, if one has a solution, that you can actually approach government with the solution and get incentives from the government.

“So, this is something that is not so obvious. But I think they tried to as much as possible bring that out. I think in the coming years or coming months, we would see clarity on how we can move forward on new projects that will be attractive to the investor, and that will be very good for the country itself.”

He, however, stated that the PIA brought clarity as to where the government wants to drive the industry to, adding that most of the government’s aspirations and initiatives being pushed on gas were all expressed in the legislation.
Alboni, who was represented before the panel by Mr. Bashir Bello, General Manager, Business Development and Government Relations, Shell Companies in Nigeria, said issues surrounding Deepwater gas provisions in the PIA need to be revised in order to bring in better fiscal terms.

She explained that the PIA review for better fiscal terms for gas investment would help investors to assist the government’s efforts to achieve a low-carbon economy and increase gas production.