24 October 2016, Sweetcrude, Lagos — Ahead of Thursday’s launch of Nigerian National Petroleum Corporation, NNPC Seven Point Roadmap agenda for the country’s petroleum industry by President Muhammadu Buhari, there are high expectations among investors and industry players as they anticipate milestone incentives.
One of the incentive operators are anticipating in the Seven Point Roadmap document is to define NNPC role in the industry.
If NNPC ends up being a regulator, some operators argued that foreign investors are willing to buy NNPC stake in Joint Venture operators.
Others anticipate better dialogue and engagement of host communities and militants in order to boots oil production and earn more revenue for the country.
Moreover, Chief Executive officer of Financial Derivative Company, Bismarck Rewane said there has been a lot of talking about the launch of the roadmap noting that now is time for action, hoping that by Thursday there will be historic for the country and the petroleum industry.
The milestones according to Bismarck Rewane should include incentivising the majors, taking care of the host communities, constructive engagement with the militant to ensure oil production are up.
“Production now is 1.5 million barrels which is almost 600,000 barrels per day less than what is expected and what is budget for. Nigerians needs the oil, revenue and the price. The price is high at $51 to $52 per barrel.
“At $51 to $52 per barrel of crude oil, Nigeria certainly needs to do something to get our product back up. We need to have a clear road map and define the role of NNPC, whether as an operator or a regulator and then we can decide what we want to do with their asset.
“Saudi Arabia just raised $17.5 billion and they are expected to raise two trillion dollar in the next two to three years to make sure that their oil companies are mainly utilised,” he said.
He added that the NNPC document should contain clear roadmap when NNPC will be backing out from those activities that are stifling and constraining the oil majors.
He explained that NNPC should only regulate and create forces that will make the market to operate naturally noting that with a buyer’s market in place, government has no role to play rather than to decide whether to sell it stake in JV operation with a repurchase option and concentrate on petroleum profit tax, royalties and other taxes.
In the roadmap document, Bismarck said it should contain investment incentives for the major due to financial strength stressing that Nigeria needs them to invest in the industry to boost oil production.