The TotalEnergies Nigeria says the deep water segment of oil and gas industry in Nigeria has been stuck for 10 years since the Egina Final Investment Decision (FID).
Mr Matthieu Bouyer, Country Chairman/Managing Director of TotalEnergies Nigeria, made this known at the 23rd Nigeria Oil and Gas (NOG) conference, on Wednesday, July 3, 2024, in Abuja.
The conference is themed, “Showcasing Opportunities, Driving Investment, Meeting Energy Demand’’.
The Egina oilfield is one of the TotalEnergies most ambitious ultradeep offshore project, located at about 130km offshore Nigeria at water depth of more than 1,500m.
Bouyer, in a session titled: “Defining the Outlook for Deep-Water Exploration and Production in Nigeria”, blamed the gap on high operating costs and lack of contractors and competition in Nigeria.
He listed increased in levies, changes in fiscal terms, lack of contractors, competition in regional markets and comparatively high operating cost reasoned behind the development.
According to Bouyer, many contractors had left the country and that has increased the lack of competition in the sector.
To move the deep water sector forward and increase competition in the sector, he said there was need for the Federal Government to understand why they left and put some measures in place to bring them back.
“Even with the fiscal incentives, if the costs are too high, investment will not be possible, therefore, there is need for competition to drive the costs down.
“As Capex are capped, arbitration is made. So, it’s important to be competitive and agile to accommodate requirements,’’ Bouyer said.
He underscored the need for stringent measures to be taken, adding that such measures would enable investments in the deep water space.