Adewale Sanyaolu
Strong indications emerged at the weekend, that the ongoing amendment to the deep offshore and inland basin production sharing contract (DOIBPSC) Act of 1993, which may earn Nigeria about $1.5 billion revenue may turn out to be counterproductive for the country.
The review of the PSC could pose a further threat to about seven deepwater oilfield projects in the country waiting for its Final Investment Decision(FID).
Some of the projects include Shell’s Bonga South-West and Aparo(225,000bpd) and Bonga North(100,000bpd).Eni’s Zabazaba-Etan(120,000bpd),Chevron’sNsiko(100,000bpd) and Exxonmobil’s Bosi(140,000bpd) ,satellite field development phase 2(80,000bpd) and Uge (110,000bpd). Although various stakeholders have been calling for a review of the act, there are fears that it might scare away investors from the oil sector.
During the debate on the bill in the house, Isiaka Ibrahim from Ogun state expressed reservations over the review which he warned could have negative implications.
“It is far expensive to explore offshore today, unlike before where it was only Nigeria that has oil in abundant, we have other countries we are competing with.
I don’t know if we are taking into consideration if these companies will not leave Nigeria, if we can measure the long term effect of review.”
The National Assembly had, last week, sent the bill seeking to amend the DOIBPSC Act to President Muhammadu Buhari for assent.
More worrisome for the country is the reported move that Chevron is making plans to sell some of its Nigerian oil assets and focus on growing its shale production in the United States. The action according to reports is part of a decision reached to reshape the company’s portfolio.
Discussions are reportedly taking place directly between the company and potential buyers while Chevron is not planning to launch a tender process for the assets at this stage.
“Chevron joins rivals including Exxon Mobil and Royal Dutch Shell in drive-by foreign oil companies to reduce their footprint in Africa’s largest oil producer which has been mired in political and security instability in recent years,” the report read.