Nigeria in stiff competition for investments — Shell

Shell has disclosed that Nigeria is in stiff competition for investments as far as the oil and gas industry is concerned.

Shell also pledged to support the recent reforms in Nigeria’s oil and gas industry, describing them as a good way to reposition the sector for growth and profitability.

The Senior Vice President Nigeria at Shell, Marno de Jong, said attracting investors’ attention will require a continued rethink of strategies and policies.

“We welcome the reforms by the Nigerian Upstream Petroleum Regulatory Commission, which have already improved crude oil production to about 1.75 million barrels per day as reported by the agency,” said Marno at the Nigeria International Energy Summit in Abuja.

He explained that sustained reforms will boost production and generate better returns in the entire value chain of the industry.

“Shell is determined to support the reforms as part of our general commitment to the development of Nigeria, dating back to over 60 years of operations in the country,” the vice president noted.

Reforms in the oil and gas industry have picked up following the enactment of the Petroleum Industry Act in 2021, with the NUPRC looking to improve oil and gas production and reserves, achieve cost efficiency, and ensure stability in host communities through many initiatives.

Marno said, “Apart from boosting production, the reforms are also attracting investments such as the FID we took last year on the $5bn Bonga North deep-water project.

“Nigeria is in stiff competition for capital and confidence, and attracting the attention of investors will require a continued rethink of strategies and policies. This will enable the country to leverage enablers like technology, cost efficiency, and manpower to ensure business growth and sustainability through the operations of international oil companies and independent producers.”

Similarly, Shell called for the development of infrastructure to promote the growth of domestic gas and monetisation of the resource.

The Managing Director, Shell Nigeria Gas, Ralph Gbobo, disclosed that the infrastructure will support the delivery of gas from producers to consumers in an efficient way that is also transparent and cost-effective.

Ralph described infrastructure as the bedrock of a thriving gas industry, citing the Escravos-Lagos Pipeline System, which feeds the domestic gas market, as an example.

He said, “If we can fully implement our regulations, a key one being the Network Code, and maintain a stable network where investors can get their returns, I can guarantee that we will see more players come into this space.

“Our experience at SNG shows that the task of expanding the Nigerian domestic gas market is a collective responsibility and not to be done by just a few players. It requires inputs from the regulatory, upstream, midstream, and downstream sectors.

“The key to unlocking all these inputs is driving and implementing the right policies. The implementation of clear policies and incentives allows for more investors to come into the domestic gas market, be it in terms of gas production or infrastructural development. Investors must be assured of a stable regulatory and fiscal market where their investments are guaranteed.”

He added that Shell companies in Nigeria have invested across the entire gas value chain, having understood the potential of the commodity to accelerate industrial and economic growth in Nigeria.

He explained that the SNG, established in 1988, has led the way in the provision of gas infrastructure in Nigeria, building gas distribution systems in Rivers, Abia, and Ogun states through which it delivers gas to over 140 domestic, industrial, and commercial customers.

Last year, the company signed an agreement with the Oyo State Government to build a gas distribution infrastructure to deliver gas to businesses in the state and beyond.