Mr. Matthieu Bouyer, Country Chairman and MD of TotalEnergies, Nigeria.
Speaking at the 23rd Nigeria Oil and Gas (NOG) Week conference in Abuja, Matthieu Bouyer, Country Chairman and Managing Director of TotalEnergies Nigeria spoke in a session titled “Defining the Outlook for Deep-Water Exploration and Production in Nigeria,” explained that investment in deep-water segment of Nigeria’s oil and gas industry has been stagnant for ten years since Egina Final Investment Decision (FID) due to increased levies, exit of contractors and high production costs.
The Egina oilfield is one of TotalEnergies’ most ambitious ultradeep offshore projects, situated approximately 130 km off the coast of Nigeria at a water depth of over 1,500 meters.
The development of the $16 billion field began in 2013 and 2019, production began. It is projected to produce around 200 thousand barrels of oil daily at peak production.
Bouyer was of the view that stagnation to high operating costs and a lack of contractors and competition in the country.
The TotalEnergies helmsman posited that levies, changes in fiscal terms, and competition in regional markets as key reasons for the sector’s challenges. He noted that many contractors had exited Nigeria, exacerbating the lack of competition in the industry.
To advance the deep-water sector and boost competition, Bouyer emphasised the need for the Federal Government to understand the reasons behind the contractors’ departure and implement measures to encourage their return.
He said, “Even with the fiscal incentives, if the costs are too high, investment will not be possible, therefore, there is a need for competition to drive the costs down.”
“As Capex is capped, arbitration is made. So it’s important to be competitive and agile to accommodate requirements,”
The TotalEnergies MD noted that the necessity for stringent measures, noting that such actions would facilitate investments in the deep-water sector.
Some stakeholders have also attributed the highlighted concerns raised by Bouyer as reasons why some multinationals are quitting the country and it is not clear yet if these issues will be addressed in the country’s energy sector.
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