The Managing Director, TotalEnergies Nigeria, Matthieu Bouyer, says investment in the deep-water segment of the nation’s oil and gas industry has been stagnant for about 10 years now since the Egina Final Investment Decision (FID).
This, he said, was due largely to the increased levies, exit of contractors, and high production costs in the country.
Bouyer revealed this at the 23rd Nigeria Oil and Gas (NOG) Conference held in Abuja, during a session tittled “Defining The Outlook For Deep-Water Exploration and Production in Nigeria”.
Bouyer, who identified increased levies, changes in fiscal term and competition in regional markets as key reasons for the sector’s challenges, noted further that many contractors had exited Nigeria, a situation which he said had exacerbated the lack of competition in the industry.
To advance the deep-water sector and boost competition, Bouyer stressed the need for the Federal Government to understand the reasons behind the contractors’ departure and implement measures to encourage their return.
He said, “Even with the fiscal incentives, if the costs are too high, investment will not be possible. Therefore, there is a need for competition to drive the costs down.
“As Capex is capped, arbitration is made. So it’s important to be competitive and agile to accommodate requirements’”.
The TotalEnergies Country Chairman further emphasised the necessity for stringent measures, insisting that such actions would facilitate investments in the deep-water sector.
It would be noted that the Egina oilfield is one of TotalEnergies’ most ambitious ultradeep offshore projects, situated approximately 130 km off the coast of Nigeria at a water depth of over 1,500 meters.
With the development of the $16 billion field in 2013 and production in 2019, it is projected to produce around 200 thousand barrels of oil daily at peak production.