Highlights of the story

  • Umar Isa Ajiya, CFO of NNPCL, advises Nigerian lawmakers not to deter foreign investors by regularly summoning CEOs.
  • Ajiya emphasizes the need for respectful treatment of investors.
  • He called for speedy justice, protection of the main cables and positive media coverage as factors that are important in attracting and retaining investment in the Nigerian oil and gas industry.

The Nigerian National Petroleum Corporation (NNPC) Limited has advised Nigerian lawmakers to prevent investors from leaving Nigeria through “continued invitations” from CEOs of international companies.

Umar Isa Ajiya, Chief Financial Officer of NNPC Limited, made this known on Wednesday during a panel discussion at the Oil and Gas Energy Week in Abuja, which was attended by an analyst from Nairametrics.

The session focused on “Accelerate investment, promote industry growth, meet demand”.

Ajiya said that apart from other relevant principles, the way foreign investors are treated determines whether they invest in Nigeria or stay in the country.

The news continues after this ad

Investor Relations

Ajiya said investors should be welcomed with respect from the country’s airports, adding: “It depends on how the immigration officer, the customs officer, the driver and the hoteliers treat him.”

He said the climate has changed in recent times and there is a will within the management to deliver even though NNPC CEO Mele Kyari has done a lot in the crude oil production sector.

“A lot is being done in terms of security because some of the problems that discourage investors in the oil sector are theft and vandalism.

“We will do our part with our partners, but there is also a role for everyone in Nigeria,” he said.

He stressed that lawmakers should less often invite CEOs of foreign investors for questioning.

The legislature consists of the Nigerian National Assembly and the NASS is constitutionally empowered to make laws and exercise oversight functions through committees.

However, Ajiya explained that lawmakers should be aware that constantly inviting CEOs will deter foreign investors.

He also called on the executive branch to protect the country’s core assets, but lamented the fact that some investors are being inundated with lawsuits that drag on for many years.

He said that speedy administration of justice is of great importance to encourage foreign and local investments.

Mainlines are pipelines that connect oil wells to water treatment plants.

What he said

The legislature should also reduce the constant invitations to the CEOs of these oil companies, as they are often turned away.

“When you go to the executives, you have to make sure that the main points are off-limits to everyone.

“Maybe there needs to be a national emergency on those main lines so that people don’t go and puncture our main lines, because that’s the lifeblood of this economy.

“And finally, it is imperative that any Nigerian who sees anyone destroying government property or stealing oil products reports it.

“We have a whistleblower policy and a program that compensates people who report such developments.”

He advised media organizations to refrain from negative publicity about “the agencies and companies of our institution”, According to him, the negative publicity gives a wrong image of the country to foreign investors.

Role of NNPC, FG

Ajiya admitted that the reality of the Nigerian oil and gas industry today is that Nigeria has abundant oil reserves.but still we have an energy shortage.”

He explained that the country is facing an energy shortage because Nigeria has been struggling for years with a lack of investment in the oil and gas sector, which is further compounded by insecurity and outdated infrastructure.

He said that to recover quickly, the country needs to address the “hunger of investors” through tax incentives and a stable regulatory environment where work is shared fairly and equitably.

He added that this is what the NNPC and the Federal Government have been trying to address.

As a country, the first thing that was passed was the Petroleum Industry Act (PIA). This was a long-standing issue that needed to be put on the table to restore stability and inform investors about the conditions that apply in this country.

“Furthermore, Mr President Bola Tinubu recently issued an executive order that is also aimed at speeding up implementation; it often happens that the duration of a project takes longer than necessary, causing the investor to go elsewhere.

“This combination of PIA and the Executive Order are all forms of reforms aimed at encouraging investors to invest in Nigeria.”

He, however, added that relevant stakeholders must maintain Nigeria’s competitiveness against other jurisdictions.

What you need to know

Ajiya’s comments came after NNPCL CEO Mele Kyari declared war on the challenges facing the country’s crude oil production and further called for collaboration among stakeholders in the oil and gas industry in the fight.

Kyari disclosed this during his speech at the opening ceremony of the 23rd Nigeria Oil & Gas Conference and Exhibition (NOG Energy Week) in Abuja on Tuesday.

Nigeria has so far failed to meet its production target in the first five months of 2024. Nigeria’s plan to produce 1.78 million barrels per day of crude oil was initially hampered by the Organization of the Petroleum Exporting Countries and its allies (OPEC+), which in December set a production quota of 1.5 million barrels per day, 288,000 barrels below the budget target.

In January, OPEC figures revealed that Nigeria’s average crude oil production was 1.42 million barrels per day, missing both the OPEC quota and budget targets. The figure dropped to 1.32 million barrels per day in February and fell further to 1.23 million barrels per day, according to OPEC direct communication figures.

In the first quarter of the year, as in 2023, Nigeria failed to meet the OPEC+ production quota and the production budget target for 2024, with average production at just 1.4 million barrels per day.