President of the Senate, Ahmad Lawan has pushed for a cost reduction in the production of crude oil by International Oil Companies (IOCs) operating in Nigeria.
According to Lawan, the new Petroleum Industry Bill (PIB) presently before the National Assembly would accommodate provisions to ensure same when the bill is eventually considered and passed by the end of the first quarter this year.
Lawan who made this known when a delegation of Oil Producers Trade Section (OPTS) visited his office on Thursday, said, “The cost of production in Nigeria is a major concern in the oil industry. When Saudi Arabia maybe spends $5 to produce a barrel, we spend about $30 to produce the barrel in some cases.
“The time has come for us to ensure that the cost of production is beaten down to a more meaningful and profitable production cost,” he said.
While expressing optimism that the present bill will ensure better deal with host communities because of the provision of a specific host community Fund, in addition to other existing interventions, he said, government and the IOCs must to do everything possible together, to ensure that the host communities benefit wherever they are supposed to benefit, to ensure the region is stabilized so that we can achieve cheaper production costs.
The Senate President while stressing the importance of the PIB towards the advancement of Nigeria’s economy, assured that the Upper Chamber would accommodate the interest of international investors operating in the country.
Lawan, however, bemoaned the low influx of business investors to Nigeria over the last 20 years, a development he attributed to the absence of a legal framework which the Bill seeks to address.
He said: “We are very conscious of ensuring a balance and equilibrium between our interest as a people and a country, that we should have all the benefits accruing from your operations. We need to help you by creating that kind of environment where you’re able to get the investments flow into Nigerian, instead of elsewhere.”
Speaking earlier, leader of the OPTS delegation, Mike Sangster (Total), said the purpose of the visit was to engage the National Assembly on ways to modify the PIB to ensure its success when passed and signed into law.
While extending the delegation’s support to the ongoing effort to provide a legal framework for the oil and gas industry in Nigeria, Sangster prevailed on the National Assembly to accommodate provisions in the PIB that would protect the existing investments of foreign investors.
“On behalf of the industry and my colleagues, I want to say that we duly support the government’s effort to drive through the PIB. We think it is really important that there’s an updated framework for the industry.
“In our view, we are looking for something that will contribute to Nigeria, which will bring investment to the country and growth to the economy, and obviously jobs to the Nigerian people. We are looking for something that will protect our existing investments, and also unlock opportunities so we can further grow our businesses and production,” Sangster said.
He added that there was need to jointly find ways to reduce the cost premium of operating in Nigeria, and stressed the importance for the country to transition towards a diversified gas based economy by removing some of the bottlenecks in the value chain and establishing a more free market gas pricing regime.