‘FG must align its policies to address policy conflicts’

Marginal field operators in Nigeria have called on the Federal Government to align its policies in other to address the resultant policy conflicts affecting their operations.

They argued that it is time for the government to align its policies in order to avoid multiple regulatory conflicts by its agencies which frustrates the operations of marginal field companies. They also enumerated issues of multiple regulators from the side of government and incessant risk emanating from host communities.

They stated this ashen they converged at the 2016 Africa Small & Marginal Oil Fields Development Conference, with the theme ‘Find It, Commercialise It,’ in London on 17 and 18 August.

Speakers, panelists and participants were drawn from decision makers, senior officers and top players mainly from Government regulatory directorates, national oil companies, independents, indigenous marginal field operators, investment banks, service companies, consulting firms and global industry related media.

Some of the challenges they stated included funding issues, shortage of Forex due to low oil prices, insecurity and deferred production due to attacks by militants, fiscal issues that pertains to royalty, Petroleum Profit Tax (PPT); low oil prices and market volatility, declining Foreign Direct Investment (FDI) due to country risks, problems of technology, equipment availability, lack of standardised processes, failure of local banks to grow domestic investment market due to funding of International Oil Companies’ (IOC) divestments.

However, the conference provided a forum for gaining insight on available opportunities in Africa; knowledge sharing among industry peers and networking.

Some of the top rated keynote speakers that made presentations at the conference included Emmanuel Bekee, Deputy Director/Head, Upstream, Department of Petroleum Resources (DPR), Nigeria; Dr. Amy Jadesimi, Managing Director, LADOL; Chief Dumo Lulu-Briggs, Chairman, Platform Petroleum; Engr. Felix Amieye-Ofori, Managing Director, Energia Ltd; Sam Olotu, Chief Technical Officer, LEKOIL; Engr. Osa Owiedalor, Managing Director, Platform Petroleum; Emmanuel Konyebagu, Group CEO, Platform Petroleum; Damien Mauvais, Managing Director of Standard Bank, London; Adeleke Adedipe, COO, LEKOIL; Joseph Medou, E & P Director, Petrosen; Beal Rogers, CEO, Africa Fortesa and Sunny Oputa of Energy & Corporate Africa.

Conference speakers and participants examined risk and challenges facing the development of marginal fields and what government could do to make marginal oil field operators successful. By looking at how to unlock the potential of marginal oil fields from the perspective of an indigenous operator, to how another indigenous marginal field operator survived the storm after several pitfalls to become a success story, participants narrowed down various ways of de-risking marginal field and its uncertainties.

Also discussed was the exigency on the part of government to recognise that for the objectives of promoting marginal field development to be achieved fully, government must be proactive to global issues, support marginal field operators and should not use same yard stick to bench mark or regulate marginal field operators and international oil companies.

They also posited that indigenous companies should ensure corporate governance, by avoiding family laden organisation and anything that will dent their reputation, create a high performance corporate culture to be a preferred place to work by their employees, build strong team with technical and organisational expertise, uphold social license and robust community relations, have proper internal control system, show competency in Health, Safety and Environment (HSE), seek for quality alliance/partnership and invest in human capital to ensure capacity building through quality training.

On a distinct presentation and discussion on how to access capital for the development of marginal oil fields in Africa, it was established that for indigenous operators to receive funding they have to put the right story to banks. This will entail a clear strategy which shows a well defined route to production; presenting a right team that has a track record of value creation and also indicating that they have done it before.

The indigenous company seeking for fund must also show consistent progress towards production and should not over promise or under-deliver.  It is also important that such companies should be able to demonstrate asset value through access to good data, opinion from credible third party and present a well identified upside by way of intents for future acquisition.

Through various didactic quality presentation and panel session on gas monetisation and gas to-power; participants agreed that gas from marginal fields if aggregated in clusters would be a great asset for socio-economic development and gas to power projects will not only drive economic buoyancy but could also de-risk community unrest through the provision of electricity.

One of the critical discussion points was the germane need for government to overhaul its gas policy. Participants were of the opinion that various government regulatory bodies on gas and marginal fields should align in order to avoid confusion and achievement of intended goals. It was also explored that there is a growing market for gas in Africa and gas should not be considered a risky venture if it is well positioned in the market by understanding the importance of gas in the global energy mix and its multiple role as an economic product. This could be realized by providing good legislation, infrastructure, price reforms, endearing peace and controlling the quagmire of incessant uprising by militants.

For next year, Africa Small & Marginal Oil Field Development Conference will hold in London and it will focus on progress made so far, how to grow a domestic market and increase investment. Big cap independents will also be included to share their stories with participants on how they weathered various storms in the industry to get to their present level.