Story highlights
- NNPCL’s CFO, Umar Isa Ajiya, advises Nigerian legislators to avoid scaring away foreign investors by frequently summoning CEOs.
- Ajiya emphasizes the need for respectful treatment of investors.
- He called for speedy justice, protection of trunk lines, and positive media portrayal as keys to attracting and retaining investments in Nigeria’s oil and gas industry.
The Nigerian National Petroleum Corporation (NNPC) Limited has advised Nigerian legislators to avoid sending investors away from Nigeria through “incessant invitations” of CEOs of international companies.
Umar Isa Ajiya, NNPC Limited’s Chief Financial Officer, disclosed this on Wednesday during a panel discussion at the Oil and Gas Energy Week in Abuja, attended by a Nairametrics analyst.
The session focused on “Accelerating Investment, Enabling Industry Growth, Meeting Demand”.
Ajiya said aside from other relevant principles, how foreign investors are treated determines if they will invest in Nigeria or remain in the country.
Relations with investors
Ajiya said right from the nation’s airports, investors need to be welcomed with respect, adding “It depends on how the immigration officer, customs man, driver, hoteliers treat him.”
He said the climate has changed recently and there is executive will to deliver even as the NNPC CEO, Mele Kyari has done a lot in the crude oil production sector.
“A lot is being done in terms of security because part of the problems that discourages oil sector investors is theft and vandalism.
“We will do our part with our partners but also there is a role for everybody in Nigeria, “ he said.
He stressed that lawmakers should reduce inviting CEOs of foreign investors for questioning.
The legislature comprises the Nigerian National Assembly and the NASS is constitutionally empowered to make laws and perform oversight functions through committees.
But Ajiya explained that lawmakers should note that incessant invitations of CEOs tend to scare foreign investors away.
He also called on the executive to protect the nation’s trunk lines while lamenting the fact that some investors are overwhelmed with cases in court that last for for many years.
He said the speedy dispensation of justice is very important in encouraging foreign and local investments.
Trunklines are pipes connecting oil wells with the treatment plants.
What he said
“Including the legislature, where there is a need to reduce the incessant invitations to the Chief Executives of these oil companies because that tends to send them away.
“When you come to the executives, there is a need to make sure that the trunk lines are no-go areas for anyone.
“Perhaps, national emergency for those trunk lines, that people do not go and puncture our trunk lines as that is the lifewire of this economy.
“And lastly, there is a need for every Nigerian who sees anyone vandalizing government properties or stealing oil products, to report.
“We have a whistle-blower policy and a program that tends to compensate people who report such development. “
He advised media organizations to refrain from negative publicity of “our institution’s agencies, companies”, saying the negative publicity gives foreign investors the wrong impression about the country.
Role of NNPC, FG
Ajiya admitted that the reality of Nigeria’s oil and gas industry today is that Nigeria has oil deposits in abundance “but yet we are energy deficient.”
He explained that the country is energy deficient because Nigeria has suffered years of lack of investment in the oil and gas sector, which has been compounded by insecurity and aging infrastructure.
He said for the country to quickly recover, it needs to address “investors appetite” through fiscal incentives, a stable regulatory environment where there is fair and equitable sharing of work.
He added that that was what the NNPC and federal government have tried to address.
“As a country, first of all, the Petroleum Industry Act (PIA) was passed, which had long been an issue that needed to be brought to the table to bring back stability for an investor to know the terms and conditions prevalent in this country.
“On top of that, recently, Mr President Bola Tinubu issued an executive order which is also aimed at speeding up execution; often at times, project gestation periods get longer than necessary so the investor moves elsewhere.
“Now this combination of PIA, Executive order are all forms of reforms that seek to really bring investors to invests in Nigeria.”
He added however that relevant stakeholders must sustain the competitiveness of Nigeria relative to other jurisdictions.
What you should know
Ajiya’s comments came after NNPCL CEO Mr. Mele Kyari declared war against the challenges affecting the country’s crude oil production and further called for collaboration between stakeholders in the oil and gas industry in the fight.
Kyari revealed this during his keynote address at the opening ceremony of the 23rd Nigeria Oil & Gas Conference and Exhibition (NOG Energy Week) in Abuja on Tuesday.
In 2024 so far, Nigeria has failed to meet its production target in the first five months of the year. Nigeria’s plan to produce 1.78 million barrels of crude oil per day was initially hindered by the Organization of Petroleum Exporting Countries and its allies (OPEC+), which set a production quota of 1.5 million barrels per day in December, 288,000 barrels below the budget target.
In January, OPEC figures revealed that Nigeria’s average crude oil production was 1.42 million barrels per day, falling short of both the OPEC quota and the budget target. This figure dropped to 1.32 million barrels per day in February and further declined to 1.23 million barrels per day, according to direct communication figures from OPEC.
In the first quarter of the year, Nigeria, similar to 2023, failed to meet the OPEC+ production quota and the 2024 budget production target, with average production barely reaching 1.4 million barrels per day.