NNPC, IOCs warn of rising cost of oil and gas projects in Nigeria

NNPC, IOCs warn of rising cost of oil and gas projects in Nigeria

The Nigerian National Petroleum Corporation (NNPC) and the International Oil Companies (IOCs) have decried the high cost of projects in Nigeria’s oil and gas sector, saying the development will “kill” the industry unless the players become efficient about costs of projects.
Speaking separately at a special section of the Nigerian Oil and Gas (NOG) conference in Abuja yesterday, top executives of NNPC, Shell, ExxonMobil, Chevron and Addax Petroleum, said besides oil theft and pipeline vandalism, the next major challenge facing the country’s oil and gas industry was the issue of high cost of projects, which they blamed on long contracting cycle and bureaucracy.
Country Chair of Shell Companies and Managing Director of Shell Petroleum Development Company (SPDC), Mr. Mutiu Sunmonu, said Nigeria’s oil and gas industry was a mixture of threats and opportunities.
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He said the hurdles in pushing projects through in Nigeria was overwhelming and blamed the situation on excessive bureaucracy on the part of operators, contractors and the government.
Sunmonu said Nigeria’s policy makers had clear aspirations, clear goals and good framework but lacked practicality.
“I think where we missed the gap is at the working level. Bureaucracy is a major hurdle both for the operators, contractors and government. When you have to go through this hurdle, every investor will have to think about the alternative,” he said.
Sunmonu said all key players in Nigeria’s oil and gas industry lacked sufficient sense of practicality,
According to him, investors, contractors and regulators need to have a much more practical approach to the way they do business in Nigeria.
“There is absolutely no point where every party in the value chain is sticking to his guns. The business will be the loser; investors will lose and our country will lose,” he added.
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