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United States oil and gas exploration and production (E &P) company, ConocoPhillips and Brass Liquefied Natural Gas (LNG) Limited have commenced negotiations on the terms of a licence agreement for the continued use of ConocoPhillips' technology in the Brass LNG project, NOG intelligence can exclusively reveal.

NOGintelligence gathered that the negotiation was aimed at ensuring that the planned exit of the Houston-based ConocoPhillips from the Brass LNG project does not delay the construction of the plant.

A source close to the two companies told NOGintelligence that ConocoPhillips would also enter into other transitional arrangements with Brass LNG Limited for the continued provision of expertise to ensure a smooth transition.

The negotiation followed concern by the other shareholders of Brass LNG Limited that the exit of ConocoPhillips would impact on the multi-billion dollar project as the firm accounts for about 80 per cent of the technology adopted in building the LNG plant.

NOGintelligence learnt that apart from having a 17 per cent stake in Brass LNG, which represents about $3.7billion of the project expenditure, ConocoPhillips is also the owner of the Optimised Cascade Process, which is the technology adopted for the construction of the plant.

This development, it was learnt, has fuelled concern among the other shareholders that the planned exit of ConocoPhillips could delay the execution of the project. A Final Investment Decision (FID) on the project is scheduled for this year.

Planned as a world-class, greenfield LNG facility located in Brass Island in Bayelsa State, the project is designed to produce 10million metric tonnes of LNG per year.  

The Nigerian National Petroleum Corporation (NNPC) holds 49 per cent equity in the project, while ConocoPhillips; French oil giant, Total and Italian company ENI hold a 17 per cent stake each. However, NOGintelligence gathered that NNPC plans to divest 17 per cent of its stake in the ENI-run project after the FID. Of the 17 per cent to be divested, Bayelsa and Rivers State Governments are proposed to take five per cent each, while the remainder will go to NNPC's strategic investors. The three potential strategic investors, it was learnt, include Japan LNG, Itochu Corporation and a joint venture between Sahara Energy and Sempra Energy.

ConocoPhillips put its stake in Brass LNG along with its other Nigerian assets up for sale in May last year. After a lengthy bidding process, Oando soon emerged as a front-runner and eventually won after bidding a reported $1.79 billion, plus customary adjustments. It is currently going through a rights issue to raise funds to finance the acquisition. 

The shareholders signed the Heads of Agreement (HOA) for the Brass LNG project in October 2003.     

Nigeria Liquefied Natural Gas Company (NLNG) is to raise $1.6 billion for the purchase of 6 LNG carriers. NOGintelligence gathers that GTBank is also part of the consortium advising on the fund raising.  

The purchase of the ships will enable NLNG to upgrade its dedicated fleet. The Nigeria National Petroleum Corporation owns a 49 per cent stake in the venture. Co-owners are Shell (25.6 per cent), Total (15 per cent) and ENI (10.4 per cent). The company is looking for medium to long-term finance by the end of March 2013.

Esso Exploration Nigeria Limited (EEPNL) has awarded an important contract for the provision of sub sea production systems to Houston-based Cameron Systems. The leading provider of flow equipment products, systems and services to worldwide oil, gas and process industries, will provide the sub sea production systems including production trees, water injection trees, manifolds, production and topside controls and associated equipment to EEPNL's Erha North Phase 2 development.

Cameron's Chief Executive Officer said the development would enable the company to further enhance their in-country capabilities and add to their track record in Nigeria for executing projects, transferring skills to our Nigerian workforce and partnering with local suppliers.

The price of OPEC basket of twelve crudes stood at $111.27 a barrel on Thursday, compared with $113.28 the previous day, according to OPEC Secretariat calculations.

The Minister of Petroleum Resource Mrs Deziani Allison-Madueke presented the Petroleum Industry Bill (PIB) to the Senate on Tuesday. While doing so, the Minister was assured by the Deputy Senate President, Mr Ike Ekweremadu, that the PIB would be given a speedy passage into law. However, he implored her to ensure that Senate invitations to her were honoured as there were likely to be contentious issues on which the Senate might need some input from her. The Minister has been criticised in the past by Senate for allegedly refusing to appear before the National Assembly to respond to their questions on the Bill.  

The Minister dismissed suggestions that there is too much control vested in the Minister under the PIB. She said the current Petroleum gives the Minister much more power than in the PIB.

Mr Alirio Parra, Board Member, CWC Group Limited and chair of the first conference session from the 13th year of the annual Nigeria Oil and Gas Exhibition and Conference, spoke on Nigeria's oil and gas strategy for the next five years, looking at how the global economic crisis and uncertain oil prices are impacting Nigeria and how Nigeria can continue to attract investment amidst competition from other Sub-Saharan African countries. After summarising the positive issues - government at a surplus, sovereign wealth fund created, prices increase over the last 4 years - he then went on to look at the challenges facing Nigeria is facing. He said that the changes in the global energy environment would be reflected on Nigeria. He particularly wanted to stress the following:

1. Unconventional renewable resources will for the first time surpass conventional resources and this increasing diversity of energy supplies will mean that options have widened out for consumers of oil and gas supplies.
2. As a result, there are also wider opportunities and choices facing investors.
3. World oil and gas production has moved westwards - for example the United States of America has already become the largest producer of gas and possibly shale oil in the future.
4. The shift in consumption continues to move eastwards and the implications are that as US shale increases, imports of light sweet crude from US will decrease and the global energy trade will increase towards the east.

Mr Parra concluded with what he expects the Nigerian oil and gas to look like in the next five years.  

From inexperienced operators to sophisticated developers: Mr Parra said the rise of indigenous companies was crucial and they would have an increasingly high role to play in the future of upstream oil and gas in Nigeria.  

From paper tray to masterplan: Mr Parra praised the gas master plan which he said would bring gas to the domestic market by 2015 when it comes to fruition.

From abandoned swamp to the most advanced processing plan: Mr Parra praised the gas to liquids (GTL plant), which, when fully operational, will be the most technologically advanced plant in Africa.

Finally he praised the Nigerian content plan, which with increased investment has highlighted the entrepreneurial skills of Nigerians.  All of this, he said, was due to the entrepreneurial skills of Nigerians.

The Minister of Petroleum Resources, Mrs Alison-Diezani speaking at the conference, said that Nigeria is transiting towards the next chapter and that since Goodluck Johnathan's assumption of office the industry has experienced new levels of investment. She said whether in the upstream, midstream or downstream, the government was poised to boost efficiency and productivity so that the country can get the best out of her abundant resources, just like other producing countries.

The Minister outlined some of the industry's notable achievements in the last few years, upstream including:

• Oil production at 2.4 million barrels per day
• Gas production at 6.3 - 7.8 billion tcfs per day
• Flaring of associated gas at under 11 per cent
• Initiative to gear NNPC* to a medium size oil company has been done in a aggressive manner over the last two years.
• The completion of the signing over of NNPC's equity in oil blocks to NPDC.
• Key gas infrastructure developments including 13-inch pipelines, expansion of Escravos, doubling of gas supply, and funding of the gas initiative now being done through Eurobonds.

She also outlined some downstream improvements, including:

• Gas utilisation up from 16 per cent to 88 per cent
• Increase in contribution of refineries from 12 million litres to 21 million litres daily
• Rehabilitation of refineries - turnaround maintenance (TAM) already commenced with Port Harcourt, others to follow thereafter
• Establishment of more NNPC stations
   

The Minister also stressed the many challenges the country is facing. Top of the list of challenges are the criminal syndicates who are daily vandalising pipelines and interrupting product supply as a result. She said the crude obtained illegally from the pipelines are being sold abroad and are ending up in far-flung parts of the world.

The Minister also mentioned the environmental challenges. Reacting to the recommendations of the United Nations Environment Programme (UNEP) report on the clean-up of the Niger Delta, she said that the government has set up an agency, the Hydro-Carbon Pollution Restoration Project (HYPREP), which is charged with carrying out the recommendations in the UNEP report.

The other big challenge is the Petroleum Industry Bill (PIB), which the Minister said was on course and is currently going through the legislative process at the National Assembly. She said that over 80 regulations would be developed as a result of the PIB becoming law. The Chairman of Oando Plc, Mr Wale Tinubu, speaking just after the Minister, was however, a little more sceptical about the chances of the PIB being passed this year, at all.

Regarding the next five years, the Minister said the government would continue the transformation of critical areas of the industry. Among those, she mentioned:

• The gas revolution agenda
• The crude oil blood money initiative which is intended to deter crude oil theft
• Increasing Nigerian content in the industry with a particularly focus on job creation
• Supporting the HYPREP clean-up of environmental degradation
• Ensuring the passing of the PIB into law

She said that despite the increasing dependence the US on shale oil, Nigeria had nothing to fret about in the face of dwindling imports from its largest importer of crude. She said that other markets would be explored.

She finished by stressing that the next five years would create an opportunity that will allow for great achievements in the industry. She called it a period in which challenge will be tempered by opportunity for the government.

The Minister of Petroleum Resources spoke during her speech at the conference of the government's determination to stop crude oil theft by finding a way to stop the laundering of the proceeds of the theft.

The Minister said: "The government is determined to address these problems once and for all. As a matter of fact it is trying to reach out to some of its counterparts where some of these products are being refined. It is the thinking of the government that some fiscal entities throughout the world are responsible for laundering of the funds realized from this illicit act. One thing that is sure is that the products of bunkering are not sold in ECOWAS countries. The proceeds are also not kept in these countries but in far flung international financial institutions. So it is important we find a way of curbing this trend."

It is generally thought that although the illegal oil exports may be ending up further afield, the proceeds are being laundered in the world's leading financial centres. Oil theft campaigner, Ambassador Dele Cole has said in the past that the illegal oil is ending up in refineries in Ukraine, Bulgaria, Serbia and Singapore.

Calling the proceeds of crude oil theft "blood money" the Minister said the government was calling for the assistance of foreign governments over tracking the proceeds of the oil theft. For example, she said, the President met last week with the British Prime Minister, David Cameron for discussions on how to address the menace both from the internal and external perspective.

Apart from seeking foreign assistance in the fight against crude oil theft, the Minister said that the finger printing of Nigeria's oil, something that had been talked about as far back as 2008, is to be introduced.

The idea of "oil finger-printing" is nothing new and is a certification process that follows the successful "conflict diamonds" campaign. The technology makes it possible to identify the origin of any cargo of oil using analytical chemistry techniques. The identity of the cargo will be used to determine its legitimacy or otherwise. It is the application of oil finger printing to oil theft that is a more modern idea.  

The technology was developed to trace oil reservoirs and determine specific sources of crude where various sources were likely to co-mingle. The successful use of the technology in the fight against Nigerian crude oil theft will choke off the market thereby interrupting the supply chain. This government, finally, it seems, has the appetite to introduce this technology into the Nigerian oil industry as it braces itself to take a final stand against crude oil theft in Nigeria.

The Minister said the Service Chiefs are included in the battle against crude theft and bunkering, as they are being co-opted to find a lasting solution to the disturbing trend.

"We are doing everything including inviting the Service Chiefs to help us out. In fact, the Chief of Naval staff is already putting up programmes and fashioning out plans towards addressing this problem," she said.  

It appears that the plea for foreign assistance by foreign goverments does not include military assistance, something that, during President Yar'Adua's regime, the government was willing to consider. Gordon Brown had in 2008 offered military assistance for the policing of the Gulf of Guinea, which had, at that time, become one of the most dangerous waterways in the world.  

For many commentators, effective policing of the creeks is one of the most effective ways that the government can fight the theft by ensuring that stolen oil never gets to leave the creeks, effectively stifling any chance of exporting stolen oil. The estimates are that 90 per cent of the stolen oil is exported. Inability to export the oil and earn valuable foreign exchange will prove a strong deterrent, many believe.

The Minister said the government is not going to surrender to the antics of the criminal gangs as it is prepared to do all within its power to stop these cabals and their collaborators.

Addressing the issue of crude oil theft at the Conference, the Chairman of Shell Companies in Nigeria and Managing Director of Shell Petroleum Development Company (SPDC), Mr. Mutiu Sunmonu accused powerful Nigerians of being behind the local and international syndicates involved in crude oil theft. He urged the Federal Government to move against these cabals.

Speaking at the Conference, Sunmonu said that instead of going to European and other foreign countries to seek for help on how to tackle crude oil theft, President Goodluck Jonathan's administration should move against "principalities and powers in high places," who are the sponsors of crude oil theft.

Sunmonu acknowledged that it was commendable for the government to discuss with foreign countries suspected to hold the proceeds from the sale of stolen crude oil, but added that the problem could easily be solved if the sponsors were identified and dealt with.

He said like the drug business all over the world, criminals who sabotaged crude oil pipelines in the Niger Delta were only working for bigger entities.

"The truth is that the small criminals in the creeks of Niger Delta bursting pipelines and stealing crude oil are not working for themselves. Like the drug cartels around the world, they are being sponsored by big principalities and powers in high places, which the government should go against if the fight against crude oil theft is to be won," he said.

He disclosed that Shell and other International Oil Companies (IOCs) operating in Nigeria have had their pipelines sabotaged by crude oil thieves on several occasions.

Speaking at the same conference, the Group Executive Director, (GED) in charge of Exploration and Production, at the Nigerian National Petroleum Corporation, (NNPC) Mr. Abiye Membere, however, stated that the situation had improved by the end of last year. He said that the country's total crude loss to "bunkering" activities had dropped from 150,000 barrels per day to 80,000bpd towards the end of 2012. He attributed the drop to the government's security measures, which he said had yielded results.

Shell has stated that for its Joint Venture (JV) partnership with the Nigerian National Petroleum Corporation (NNPC) to succeed, the corporation must be able to fund its share of JV costs in order to attract the required external investment and partnership, as provided in the proposed Petroleum Industry Bill (PIB).

Chairman of Shell Companies in Nigeria and Managing Director of Shell Petroleum Development Company (SPDC) Mr. Mutiu Sunmonu, stated this during his presentation at a recent Nigeria Oil and Gas Conference in Abuja.

Sunmonu noted that partnerships were the keys to success in the oil and gas business.The Shell boss said that the industry needs to know it can trust the government not to impose random burdens and delays, not to vilify business, and to set clear and consistent policies that can inform long-term investments.

Sunmonu said that as much as he supports government's vision to boost production and grow reserves, it is only when all these are put in place that the government can achieve its target for the oil and gas sector.

Addressing the issue of the PIB, he said: "The PIB needs to address long-term industry issues; for example, funding issues for JVs, where funding requirements have hampered production growth. Nigeria needs a strong national oil company, but any national oil company has to partner positively and, again, has to compete with those elsewhere that are also seeking external investment," he said.

He also said that a balanced PIB was required to provide optimal revenue to the government whilst providing sufficient incentives for new investment to fuel growth. There is a need to balance risk and reward, he explained. 

"It is important to take local business challenges in Nigeria into consideration as well as the impact on existing investments made in good faith at current legal and fiscal terms.  The PIB should create a level playing field - one that is fair to all investors," he added.

Sunmonu further disclosed that the setback in the passage of the Petroleum Industry Bill (PIB) had hindered Shell's planned investment of about $30bn in two offshore deep-water projects in the country.

"If we look at our onshore today, it is nowhere near the capacity we have today, most of what we have today comes from our deep offshore operations but there is a lot more that we can get out of onshore but that is the place that has serious financing challenges. Deep water portends a huge opportunity. In Shell, we have two big projects we will like to do as soon as we are sure that the environment and the conditions are right, costing us about $30 billion and I am sure it is the same with the other IOCs (international oil companies) because each of us have projects in the pipeline but we are all waiting for the almighty PIB to be able to make these decisions. It is very clear in my mind that the potentials are there but turning those potentials to reality requires a lot of hard work, creative thinking and genuine value creation," he explained.

He also urged oil and gas stakeholders to turn to technology development, adding that as oil and gas became more challenging to produce, the use of technology would also become more important.

"Our future strategy should look at how government and industry can work together to ensure maximum recovery of hydrocarbons through new technologies. Industry can and should share best practices in key technology areas. SPDC is proud to support the government in its efforts to provide more energy for Nigerians. We need to share best practices on technological advancements that will support government's aspirations of boosting the economy," he said.

The newly revised Petroleum Industry Bill (PIB) currently before the National Assembly has the potential of giving the direction where all oil and gas exploration and production activities in the country is to go in the not too distant future. This is against the backdrop that the Bill is to address issues that has held back investment and limited exploration and production efforts for long years according to the Group Executive Director, Exploration and Production, Nigerian National Petroleum Corporation (NNPC), Abiye Membere who spoke at the conference on the next steps for the industry.

Membere noted that among many other things, the Bill attempts to address the issue of licence administration with the introduction of a new model to encourage optimal production from oil fields.   

He said: "The new PIB tries to address the issue of operatorship of oil blocks. The current trend where you find an operator sits on a 2,500 sq km block and only explores and produces from less than 20 per cent cannot be said to be in the best interest of production. Sometimes what you find is that the operator has some dotted operational activities with reserves or discoveries that are too small if put at par with the big players. By this alone, it is most likely going to take the operator over 20 years to get to these discoveries. This I think is quite unhealthy. So, it is for this reason that the new lease administration model would be beneficial to take care of this problem. This new model called the 2km by 2km model reduces the grid thus making it possible to size the block to areas that are currently functional."

According to Membere, this will help to usher in a lot of new small players with low operating overheads which will have the cumulatively effect of turning out more production and creating a much bigger effect. He said it was like putting many small rivers together, which then become bigger than the ocean. With such new players, he noted it would be possible to increase both the reserves and production base. 

The Director of DPR, Austen Olorunnisola, spoke at the conference to address the potentials of the industry going forward. Due to the shortage of time, Mr Olorunnisola had to be concise in his presentation but managed to get his points across.

The key messages, from Olorunnisola, were the emerging trends and how the huge potential must be turned into reality. The main concerns in the industry he outlined were:

• Reserves strengths - these he said have been going in the wrong direction for the past 5 years.
• Reserves replacement - he said that production has been outweighing production in the past 5 years.
• High value production onshore is also declining.
• Gas flaring, though down 18% to 16%, is coming down too slowly.
• Deep offshore activity is slowing to a halt with only few exploration wells drilled and only 2 FID's in the last 2 years or so.
• Exploration breakthrough is yet to come in the Frontier Basin 

All of these issues, he said must be turned around for Nigeria to be able to translate its potentials to reality. In spite of these challenges, he said Nigeria was ready to transform and reposition its oil industry. He said that energising the industry and improving efficiencies would sustain investor confidence, which is crucial towards a turnaround. He said that it was important to ensure not only that all associated gas is achieved utilised but and also to ensure that oil and gas are used to develop other parts of the industry.  

Finally, he said that the peace and security issues in the industry would have to be improved upon.  

All of this, he said would ensure that even in the changing world energy market, Nigeria could be sure of translating its enormous potentials into reality and achieve its target of $50 billion in external reserves.

According to the Petroleum Technology Association of Nigeria (PETAN), the success of indigenous companies (Independents) particularly in the upstream sector is dependent on a collaborative engagement with all key stakeholders including the government and International Oil Companies (IOCs).

Speaking at the conference, the chairman of the association, Emeka Eneh told how indigenous companies are transforming the Nigerian oil and gas industry. He said the need for a collaborative engagement was paramount and that the association was ready to be part of the collaborative talks on behalf of its members, if that would move the industry forward and take care of the collective interest.

He said that it is becoming increasingly obvious that Nigerian Independents are really prepared to be involved in oil exploration and production as most of these companies are managed by people with high entrepreneurial ability.
 

"There is something very reassuring about the ability of some of these Independents to play big. This is as a result of the fact that the statistics gathered  show that over 73 per cent of the Chief Executive officers of these companies have entrepreneurial backgrounds compared to those with technocratic background. This I believe is good development for the industry," he said. 

"For the industry to grow there is need to factor in a leap of faith. Doing so I believe would not only make local content and independents to grow but would also be of immense benefits to the IOCs and the country as a whole," he added.

PETAN, he said would help to create a safety blanket for those who want to invest in the industry and also create an incubator-like platform for those who want to grow their businesses.
 

On the issue of host communities' constant rift with operators, Eneh said there is need for social and moral obligations which stakeholders including operators and government are to respect with the communities. He explained that PETAN on its part is trying to provide a social blanket as a way of helping to try to solve some of these issues that affect the host communities where these resources are unearthed.

He said that PETAN also has an internship initiative with the Nigerian Content Development and Monitoring Board (NCDMB) for people from host communities to be trained on the process involved in the extraction of oil and gas in their domains.  

Three years after the enactment into law of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, otherwise known as the Nigerian Content Act, stakeholders at the conference offered strategies to boost its implementation. They unanimously described the Act as the game changer for the industry and said that more ground needed to be covered if the Act was to achieve its very essence of enhancing local content in real and concrete terms. Among those that spoke were the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Ernest Nwapa, the Special adviser to the President on Niger Delta, Kingsley Kuku through a representative and Bayelsa State Governor, Hon. Seriake Dickson

In his speech, Ernest Nwapa said that the local content initiative would only be appreciated more if seen from the perspective of value addition and not revenue provision.

He said: "When one looks at the E and P value chain, two thing comes to mind: the oil and gas. But the question is what value have we taken from the scheme and what legacy can we point to in exploration and production, in developing the facilities? How much of the action is taking around these activities? Have we really participated in the marine support, the pipelines used to transport products, the transportation of our crude abroad for sale? In all these activities what have we benefited apart from revenue generation? These are big fundamental questions. Again we must ask ourselves what must we do to get it right because if you look at the value that has been added it just doesn't match these activities. The commitment then should be on how to get value and not only about revenue that can be made."

With reference to training and human capacity development for instance, Nwapa said that local content should be seen to tilt more towards manufacturing activities than just getting employment and jobs from these companies.

"The truth that must be told is that even if we continue to train people they cannot all be absorbed into these companies due to limited opportunities. Unless we plan to sack those who are currently working in these companies, then it is certainly going to be difficult to get these people absorbed into the system. So effort must be made to engage more people in manufacturing activities than just seeking for employment in these oil and gas companies after their training," he said.

The Special adviser to the President on Niger Delta, Kingsley Kuku also spoke on the issue. He said that if the local content requirements under the Act are to be seen to be successful, great premium should be placed on reintegrating into the workforce those ex militants who have acquired various skills required in the oil and gas industry.

Kuku who was represented by the Technical Assistant/Head, Reintegration Department, office of the Special Adviser To President on Niger Delta, Lawrence Pebble said that he feared the country may be sitting on a keg of gun powder if there are not going to be jobs for the repentant militants after their training in various aspects and fields of the oil and gas industry.

"One thing we must realise is that a new phase of militancy which is the militancy of intellect and minds may arise if we don't consider as priority the need to get places to attach most of our students. In whatever skill acquisition aspects one can think about, whether in boat and ship building, welding and fabrication and underwater welding and water diving, the students who are ex-militants are striving to get skills that can make them contribute their quotas to the oil and gas industry," he continued.

Bayelsa State Governor, Hon. Seriake Dickson also spoke about local content. He said that the current level of participation by Niger Delta nationals in the local content project still falls short of what was required.

He said, "Local content is one framework that I wish the people from this region (Niger Delta) can benefit from with respect to its various legal business opportunities. But have they been able to get full dividends from the Act? That I think may be difficult to say in the affirmative. So, we have to further expand the frontier of the local content law for more participation."

He said the Act should not only be administered in theory, as it is, but practically by continuously examining how it is working and the extent to which it has impacted on the well-being of the people in the communities. He said his administration within the short space of time has been able to improve the lot of the people through various programmes that have been put in place.

"While we expect that the Federal Government (FG) would come to the aid of our people through the full implementation of the local content law ... we have been building human capacity through our scholarships scheme and empowerment programmes because we think building human capacity is the most important developmental project any government can undertake'" he said.

He noted that his administration, in the bid to enhance local content in the state, has decided to set up a partnership office, which is going to be like a one-stop place for stakeholders to relate together on issues affecting the communities. He added that a community engagement board is also going to be established to look at the issues of engagement by the operators, the tenants of the communities.

"We are considering critically the issue of community engagements because it is becoming quite worrisome the trend where communities are always having issues with the operators. That explains why we are setting up a community engagement board to intervene in this matter. We believe if we are able to do this we would have been able to resolve part of these issues," he said.

He concluded that the law, which he said had the potential to be one of the most effective if well administered, is capable of creating one million jobs in the next five years, thereby helping to reduce poverty and unemployment in the country.

Nigerian banks have the capacity to support projects in the oil and gas industry provided certain related issues are adequately addressed. The Group Deputy Managing Director, Access Bank Group Hebert Wigwe, made this disclosure while speaking at the conference on how to revamp Nigeria's oil and gas industry through increased investment.

Wigwe said security issues and regulation are part of the reasons why the banks have not been forthcoming in financing some of the projects in the industry. He denied the accusation that the banks were more interested in their financial returns than in supporting the economy by playing big in the oil and gas sector.

"While I may not be able to hold brief for all the operating banks in Nigeria, I am sure a lot of these banks are willing and able to provide the necessary incentives for the growth of the oil and gas industry if only the operating conditions are favourable," he said.

While painting a gloomy picture of the industry, Wigwe said there is no denying the fact that increased investments are now required in the oil and gas sector in the face of the dwindling fortunes of the once lucrative oil and gas business.

"The situation right now is quite pathetic. We have it that out of 27.2 million barrels production annually accounting for about 2.2 million barrels per day, the country exports about 2.3 million barrels of crude oil per day leaving little or nothing for local refining because our refineries are not working optimally," he said.

"The industry is also said to be contributing 70 per cent GDP to the economy despite making a 95 per cent contribution to foreign exchange earnings. This is quite unacceptable particularly in a country where there are enormous opportunities for investments if only the right conditions are in place," he added.

He called on all stakeholders in the industry especially the policy makers to see to it that efforts are expedited towards removing some of these obstacles to investment financing by the banking industry.

He said it was disheartening that apart from the International Oil Companies (IOCs) that have made investment forays into the deep offshore, just a few of the indigenous oil companies have been able to make in-roads into this difficult play which accounts for 40 per cent of the country's total production. Indigenous participation in this capital-intensive terrain is due to their inability to access funds from the banks according to Wigwe. He said the result of this is reflected in the fact the country has not been able to add appreciably to the number of its number of wells for over ten years.

"We must understand one fact, that we have made no progress especially in the area of boosting our reserves by increasing our rig counts. It is instructive that Angola which started oil productions years after us now boasts of having over 150 wells while Nigeria has just 85 to show for its long years of petroleum exploration and production," he said, adding that this was an irony.

Mozambique Gas Summit | 11 - 13 March 2013 | Maputo - http://www.mozambique-gas-summit.com

Oil & Gas North Africa | 18 - 20 March 2013 | Rome - http://www.thecwcgroup.com

5th African Petroleum Congress and Exhibition (CAPE V) | 26 - 28 March 2013 | Libreville - http://www.cape-africa.com