TAOFIK ADEGBITE: We are hopeful that the National Assembly will pass the PIB in the first or second quarter of 2021. With the bill now gaining traction, fiscal policy should become more encouraging for private investment that was being held back. We need to find the right balance between the government increasing its revenue and a tax environment that is attractive for private investment in the industry. Once this has been achieved, Nigeria will be well positioned to attract investment flows, especially in offshore and deepwater, which are areas where local service companies have the competitive advantages and modern capabilities to respond to the sector’s needs. This comes at a great time, as we know that the coming years are going to see a growing number of refineries across Africa.
What has been the impact of the Nigerian Oil and Gas Content Development (Local Content) Act on the upstream sector?
ADEGBITE: First, it is important to clarify that local content requirements do not mean that foreign companies should not operate in Nigeria. The goal is the co-creation of value, in order to avoid foreign companies coming to Nigeria without leaving a positive footprint in terms of multiplier effects and job creation. In that sense, the Local Content Act has worked well and been positive for Nigeria’s oil and gas sector. It has contributed to the creation of an array of service companies that are 100% indigenous and have modern equipment and vessels, as well as high-tech capabilities and local human resources that have been trained to operate in the sector.
We are beginning to see foreign companies forge enduring partnerships in Nigeria, which is a positive step forwards for the country. Thanks to this, Nigerian service companies have been able to increase their presence as regional players, supporting the offshore industry in other African countries such as Ghana, Gabon and Guinea, among others. We hope that by doing this, we will be able to replicate our success story by bringing expertise, and sharing best practices and capabilities with other African countries, thereby contributing to the development of their oil and gas offshore services.
How has Covid-19 impacted the oil and gas sector in Nigeria?
ADEGBITE: On a macro level, lower demand for hydrocarbons for fuelling cars and planes created a collapse in energy prices. In Nigeria this led to the cancellation of contracts for service companies, the renegotiation of rates and the loss of jobs. Our company was the first in the country to witness a Covid-19 infection, and although this was an unpleasant situation, it made us react and develop strong safety and health procedures to tackle the problem. Our medical team was trained in disease control and infection, thanks to Lagos State Infectious Disease Control, and we were able to set up procedures that were later shared and used by other companies in the sector to mitigate the spread of infections in offshore locations.
The Covid-19 pandemic has been very challenging, with revenue down sharply and jobs suspended, but we have managed to keep afloat and continue operations – proving the resilience of the Nigerian oil and gas industry as a whole. The pandemic has not ended, and nor have its consequences, but I trust that the sector will come out stronger. We are definitely more prepared than before the pandemic to deal with this type of unexpected situation.