Page 11 - AfrOil Week 07 2021

AfrOil POLICY AfrOil

Other measures under consideration include Even though world crude oil prices have gone
“reducing the contracting cycle to three months back up to $60 per barrel, he added, stakeholders
or less, prompting efficiency, profitability and in the Nigerian oil and gas industry must work
competitiveness,” he added. He also called for together more closely. “If we do [this], tax bene-
stakeholders to work together, saying that suc- fits will increase and profit margin will increase.
cess was “dependent on collaboration.” This is a task that must be done,” he said.
His sentiments were echoed by Mele Kyari, According to Simbi Wabote, the executive
the group managing director of NNPC, who director of NCDMB, bringing production costs
said that Nigeria’s oil and gas sector would not down will ultimately benefit the country. “Cost
remain competitive unless it could offer inves- reduction comes with some pain, and what’s
tors larger returns through lower costs. important is how the business will survive to
“There’s a global energy transition,” he sustain jobs,” he was quoted as saying by The
remarked at the NUCOP launch event. “[A] less Nation. “Local content is a panacea for cost
cost-efficient company cannot survive today. reduction. There is massive cost savings when
[A] $50 per barrel production cost cannot Nigerians run the business, unlike when expa-
survive.” triates flood the business.” ™

Somali MPs say firing of SPA head

may have been a political move

SOMALIA MEMBERS of Somalia’s Parliament have
expressed concern about the possibility that
political disputes might disrupt efforts to attract
investment for offshore oil and gas exploration.
The lower house’s committee on natural
resources and environment raised the issue
earlier this month, calling into question the
Cabinet’s dismissal of Ibrahim Ali Hussein as
chairman and chief executive of the Soma-
lia Petroleum Authority (SPA) on January 21.
Members of the committee noted in a report
sent to Prime Minister Hussein Roble and
Petroleum and Mineral Resources Minister
Abdirashid Mohamed Ahmed that Hussein had
been in office for just six months.
They also pointed out that his replacement by
Asha Osman took place shortly before the time
that SPA had hoped to conclude a bidding round
involving seven offshore blocks. (The closing Seven offshore blocks are included in Somalia’s licensing round (Image: TGS)
date for the auctions has now been pushed back
from March to June of 2021.) chairman, as there is no legal basis for both his
Additionally, they asserted that Hussein had removal and withdrawal from membership of
been dismissed as retribution for complaining the board,” they declared.
that the Petroleum and Mineral Resources Min- They further stated that they had conducted
istry had begun negotiations with international their own investigation of the matter. The results
oil companies (IOCs) in spite of the federal gov- of this probe indicate that the Petroleum and
ernment’s decision to make SPA the national Mineral Resources Ministry diverted some of
concessionaire. Moreover, they voiced suspi- the budget funds allocated for SPA and did not
cions about the fact that the personnel shift had account for them.
not immediately been made public, even though Somalia is not currently a producer of crude
it had occurred in an election year. Under these oil or natural gas, but it launched its first off-
circumstances, they said, the firing should be shore bidding round in early 2020. The auc-
rescinded in order to ensure the integrity of tions, which are being conducted online, cover
Somalia’s legal regime. licence areas known as Blocks 152, 153, 164, 165,
“The removal of the SPA chairman is not jus- 177, 178 and 204. The SPA has described these
tified in accordance with the law, and therefore blocks as “among the most prospective areas for
the prime minister of the federal government is hydrocarbon explorations and production in
required to rectify the matter and reinstate the Somalia.” ™

Week 07 17•February•2021 www. NEWSBASE .com P11