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Oil investment: Shell squeezing Nigeria, wants us to set aside our laws – NCDMB boss
Shell has, reportedly, withdrawn from the Memorandum of Understanding (MoU) Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian National Petroleum Company Limited (NNPC) signed with the international oil companies (IOCs), introducing a hiccup in Nigeria to reduce upstream projects’ contracting cycle and enable quick development of major oil and gas assets have hit a brick wall.
THISDAY reports that Shell might have pulled out of the deal to force the Nigerian government to suspend the country’s laws and grant it more waivers, after some waivers were granted it as an incentive to quicken development of some of its offshore projects that had been lying fallow for decades.
Simbi Wabote, Executive Secretary of NCDMB, who hinted at Shell’s withdrawal from the September 2023 tripartite pact, during his intervention at the just-ended 41st Annual International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE), held in Lagos, said the IOCs, especially Shell, were no longer interested in investing in Nigeria.
The assertion came as NNPC lamented the return of portfolio managers into the Nigerian oil and gas industry due to the advent of the Nigerian Local Content Act.
As part of the steps to address the waning investment in the upstream oil sector, continued production decline, and infrastructure deficit, NNPC and NCDMB had in September signed the landmark MoU with the IOCs to reduce the contracting cycle by 81.6 per cent.
The move was expected to cut down the current contracting cycle to an optimal level of not more than 180 working days from the current 327 days.
NNPC, in a statement at the time, said the deal was expected to improve the ease of doing business, reduce cost and drive efficiency, which would eventually translate to production growth, increased revenues, and, ultimately, improved profitability.
The statement said: “The MoU is also expected to contribute significantly to the double-digit economic growth rate agenda of the federal government and generate tremendous value for all the stakeholders, which include investors, companies, host communities and the nation at large.
“Key benefits of the framework in the MoU include a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days, respectively, compared with the current best effort performance of 327, 333, and 185 working days, respectively.”
But contributing during a panel session at the NAPE conference, Wabote stated that the reliance on the IOCs would not help Nigeria make progress in the development of its assets, stressing that Shell no longer wants to invest in the country.
Referring to Shell’s attitude in the September MoU between the IOCs, and NNPC and NCDMB, Wabote argued that the company had continued to demand more waivers after some had been granted it, adding the company wanted Nigeria to set aside every of its laws and allow it to develop the prolonged prolific Bonga Southwest project and some of its shallow offshore projects on its terms.
Wabote stated: “I don’t think Shell wants to invest in this country again. I’m sorry to say it, because I give you an example. Bonga Southwest started before I was even recruited in Shell and that is 26 years before I left Shell.
“Today, Shell wants Nigeria to set aside every law and do Bonga Southwest on their terms. Same thing with some of the shallow offshore projects. They want you to set all your laws aside and they want to create an emergency situation to tell you it is now very critical.
“But we started HI development almost 20 years ago, now it is very critical for Shell. HA development is now becoming critical for Shell. That’s how they leave their projects, such that it becomes critical, they write all the justifications, set aside your PIA, set aside your Local Content Act for them to do those projects. I personally don’t think they want to invest in those projects, they will prove me wrong, but time will tell.
“We in local content sat down with all the IOCs (myself and Mele Kyari) and we said, what are the issues to enable us increase production. They listed those issues. We agreed on waivers that we would give. Later, I wrote a letter and submitted back to Shell to say, three months ago, we agreed to all the waivers you requested, where is the progress? The next response was that they were looking for further waivers.”
The NCDMB boss encouraged the local exploration and production companies that are now taking over assets divested by the IOCs to apply strict corporate governance so that they could create a joint venture that would help the country to develop its assets. He said Nigeria needed to be deliberate and realise that some of the multinationals were not prepared to help the country move forward, adding, “Let’s take our destiny in our hands and progress accordingly.”
In her intervention at the panel, Executive Vice President (Upstream), NNPC, Oritsemeyiwa Eyesan, who listed the challenges confronting the country’s oil and gas industry, revealed that despite its gains, the Nigerian Content Act had encouraged the return of portfolio managers in the industry.
Eyesan said, “I must at this point just also introduce the challenges we have with local content. When the Local Content Act was passed, we were all excited and looking forward to the growth of local capacity.
“Indeed, there had been some gains in the past in this regard. But you will also agree with me that it has brought with it a lot of challenges, to the extent that we have more or less encouraged portfolio managers rather than build competences and capabilities that the local content law was supposed to achieve.”
Eyesan explained that the return of portfolio managers made projects’ financing more difficult, “because when you have middlemen, sometimes, you have several layers in these middlemen that it becomes almost impossible to complete projects profitably”.
She said another challenge facing the oil and gas industry in Nigeria, which was causing the exit of the IOCs and discouraging new entrants into the sector, was the difficult and lengthy contracting process. She described it as an operational challenge, which NNPC Limited was not insulated from.
Eyesan lamented as dismal a situation where a contracting process would linger for 24 months, instead of two to three months obtainable in other climes.
Citing political and regulatory risks as one other challenge in the industry, Eyesan said the Petroleum Industry Act (PIA) was supposed to be an enabler for investment, explaining that if well implemented, it would enable and attract investment into the industry.
She said financial risk was another major encumbrance in the sector, explaining that currency and exchange rates instability make it difficult to structure financing deals that would deliver on the expected return. She added that investors were leaving the shores of Nigeria partly because of the financial risk.
The NNPC EVP further said, “First of all, we all agreed that virtually all the IOCs are leaving onshore, not to say they are leaving Nigeria completely, and we’ve articulated some of the reasons why they are leaving. Security is a major one, because if I’m not assured that I would get my money at the end of the day, then there is no reason why I would continue.
“The other risk that confronts participants in the sector is operational risk. We talk about insecurity in the Niger Delta and in the entire country as a whole. Again, I want to invest, I’m not assured my investment will be realised. That definitely will not make it possible for me to come.
“Technology deployment as well: when we are not able to deploy cutting-edge technology because we cannot afford it, it becomes even more difficult for us.
“There are other in-country reasons: stability in our regulations, stability in the fiscal environment. Until you solve those problems, it will be difficult for you to start saying you want to attract foreign investment.”
Afenifere, the pan-Yoruba socio-cultural organisation, seems to find merit in the damning verdict of the US Commission on International Religious Freedom (USCIRF), accusing security agencies in Nigeria of complicity in the deluge of terrorist attacks in the country.
Jare Ajayi, National Secretary of the group, in agreeing with the position, posited on Wednesday: “This is because of the strong belief that the nature of terrorism bedeviling Nigeria would not be festering for this long without complicity from some powerful quarters.”
Though he acknowledged the determination of some patriotic operatives and government to stem the tide, he posited how difficult it was to believe that the activities of the terrorists would continue to thrive without active connivance.
Hear him: “With the vows by the President and top security officers, one has the feeling that the government is determined to end terrorism in Nigeria. When President Bola Tinubu appointed General Christopher Musa, (retd), as Minister of Defence, we had a lot of hope that within months, a total stop would be put to terrorism and banditry in the country.
“Unfortunately, there seems to be a spike, rather than reduction. The reason for this could be rooted in sabotage and complicity from within and from without. This tends to buttress the alarm raised by the US Commission.”
Stressing how the organisation been consistently calling the attention of authorities to areas that needed be looked into he maintained that these included politicians, who could be complicit in promoting the urgly situation.
Citing the recent comments by Godswill Akpabio, Senate President, who pointed in the same direction, Ajayi stated that no matter how unpalatable the position of the US body could be: “It is very important not to dismiss it but to use it a beacon with which to comb all areas.”
“Many people doubted us. Some dismissed us. Others predicted confusion, division, and even outright collapse. But you stood firm. You kept faith with the ADC. And today, because of your commitment, our party stands taller, stronger, and more united.”
With these words, David Mark, National Chairman of the African Democratic Congress (ADC) on Wednesday’s night showered praises on members for conducting what he considered a flawless presidential primary election to choose its candidate for the 2027 election.
Mark, Senate President from 2007 to 2015, his audience at the Congress Hall of Transcorp Hilton, Abuja, that by the outcome, the party had demonstrated that democracy and political competition could still thrive in Nigeria without crisis or division.
Regardless of the rejection of the result of the exercise by Rotimi Amaechi, former Minister of Transportation and Mohammed Hayatu-Deen, former Chairman of the Nigerian Economic Summit Group (NESG), who contested in the exercise, the former Chairman of the National Assembly, was still upbeat about its outcome.
Atiku Abubakar, Vice President between 1999 and 2007, had emerged winner of the process that took place across Nigeria from Monday till Wednesday, when the result was eventually announced.
The declared result showed that the former VP who would be running for the nation’s number one job for a record seven times came tops with Atiku 1,846,370, to Amaechi’s 504,117 and Hayat-Deen’s 177,120. Total votes cast in the election: 2,546,457 in the 3,113,599 tally.
Mark, who officially presented the ADC flag to Atiku as the party’s presidential standard-bearer, was emphatic that the exercise was not merely about producing a presidential candidate but about proving that internal democracy could still function effectively in the country.
Hear him: “Today is not just about announcing a presidential candidate. Today is also about proving a point to Nigeria and to Nigerians. It is about proving that democracy can still work.
“Proving that political competition does not have to become political warfare. That a party can organise itself around principles instead of personalities. This event has shown that in a season of deep national anxiety, a bright future is still possible.”
Stressing that had doubted the party’s ability to conduct a peaceful and credible primary, with some predicting division and collapse within the ADC, he praised members of the Presidential Screening Committee and Presidential Primary Election Committee for what he described as their professionalism and commitment to fairness despite pressure surrounding the exercise.
“In the face of enormous pressure, logistical complexity, and intense national attention, they carried out their responsibilities with courage, discipline, and an unwavering commitment to fairness and transparency. The conduct of the primary has strengthened confidence in the party and its democratic process.
“Their work has strengthened the credibility of this exercise and reinforced the confidence of our members and the Nigerian people in the integrity of the African Democratic Congress.
“It is important to mention that we are the only political party to have three strong aspirants contest for the presidential ticket. This alone makes the ADC unique in its deep commitment to democracy and democratic practices.
“By subjecting themselves to this process, they did not merely contest an election. They strengthened democracy. And despite efforts in some quarters to create uncertainty and tension, they remained committed to this process and to the ideals of this party,” he added.
For Nnenna Nnannaya-Oti, the first female Vice-Chancellor of the Federal University of Technology, Owerri (FUTO), it was another day of glory, as Alex Otti, Governor of Abia laid out another red carpet for her in lieu of her starling performance in the 2023 governorship election in the state.
The university don, was the Returning Officer of the Independent National Electoral Commission (INEC), who was nationally recognised for standing her ground against forces that reportedly tried to skew the process, leading to the emergence of Otti as governor.
Since then, she had received several recognitions including from the governor and other bodies, including her own students at FUTO, who gave her a heroic welcome upon the conclusion of her INEC task – the first and only one to be so accorded in Nigeria.
Wednesday’s recognition came through the naming of the newly inaugurated Umuahia Central Bus Terminal, a multimodal transport facility in the state capital after her, by the governor, who said it was in recognition of her role in that exercise.
Otti, who stressed that the decision was informed by her act of courage, integrity and commitment to truth, said: “This terminal has been named after Professor Nnenna Nnannaya-Oti, the courageous INEC returning officer who demonstrated unflinching integrity in the discharge of her duties during a high-stakes election assignment here in Abia.”
The governor, while stating that the honour was not limited to don alone but symbolised all individuals who resisted electoral manipulation added: “In 2023, through her courageous disposition of standing firmly by the truth… she reminded us that ordinary people can achieve extraordinary results by simply saying no.
“So she’s just a representative of all of you—INEC staff who never bent, party officials who didn’t give in, security agencies… people who said no to intimidation.”
Stressing that the state had moved beyond basic infrastructure delivery to building an integrated transport system, he said: “The days of playing small is over. We shall no longer confine ourselves to the margins.”
He explained that the terminal was designed to accommodate over 340 buses and would improve accessibility, safety and efficiency in urban transport operations, adding that it would be supported by electric bus services, with 20 already in operation, while additional units are expected in phases.
“Services will keep improving as more buses are delivered… and you can tell with accuracy when a particular bus will arrive and depart,” he said.
He urged residents to protect the facility and support government efforts by maintaining order and paying taxes, warning against vandalism, waste disposal violations and other practices that could undermine the project, stressing that offenders would face sanctions.
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