Reform before we invest – U.S. firms tell Nigeria oil and gas sector

Nigeria could attract more U.S. investment if the oil and gas sector becomes less opaque and a fuel-price peg is removed, according to a U.S. official.

“Nigeria needs to think strategically about what is going to make it a more attractive destination,” Brent Omdahl, commercial counselor at the U.S. Department of Commerce, said in an interview in Lagos. “Our investors are willing to compete on fair terms for new investments if there’s a transparent process to try to win new oil opportunities. What is difficult or a disincentive to investors is when deals are done and then the contracts are not honored.”

Controls on energy prices are also constraining investment, according to Omdahl, who is leaving Nigeria this month. The country’s national petroleum company imports most gasoline under a swap program and has capped the pump price at 145 naira ($0.40) per liter – one of the lowest prices worldwide. Yet that system cost the government almost $2 billion in subsidies last year, according to the International Monetary Fund, which has called for the cap to be lifted.

The controls “perpetuate a system where only certain people benefit,” Omdahl said. “Why not open it up and let everybody benefit from it. That is money that can be used in making investments in refineries and all of a sudden you are paying less for imported fuel and your price goes down.”

Source / More : worldoil.com

oilandgas

Oil and Gas News Undiluted !!! “Oil is well”

Please email us your industry related news for publication info@OilAndGasPress.com
Follow us: @OilAndGasPress on Twitter | OilAndGasPress on Facebook

Disclaimer
Most News articles reported on OilAndGasPress are a reflection of what is published in the media. OilAndGasPress is not in a position to verify the accuracy of daily news articles. OilAndGasPress welcomes all viewpoints. Should you wish to provide a different perspective on the above article, please email us info@OilAndGasPress.com

#FOLLOW US ON INSTAGRAM