Nigeria’s crude oil production will improve maximally if indigenous operators are given incentives, the Director, Centre for Energy Studies, Prof. Wunmi Iledare, has said.
This came as the country’s crude output fell to 1.57 million barrels per day from 1.66 million barrels per day last November, according to the monthly report released by the Organisation of Petroleum Exporting Countries (OPEC).
In an interview, Iledare said the country’s oil production would improve if operators are given tax incentives.
Iledare said: “The way out of the incessant slump in crude oil production in Nigeria is to engage proven indigenous operators more in production of crude. This can only be possible when the government provides them with appropriate tax incentives, which they can easily pay back. The Petroleum Industry Financial Bill (PIFB) 2018 said it all. The bill must be well implemented for this to happen.”
He said the fall in production was expected in view of several cases of pipeline vandalism and its attendant dwindling production capacity in the industry. According to him, decline in production comes with maturity of the shallow offshore and onshore fields.
He noted that investment was very low, adding that the issue had made it difficult for operators to divest.
Similarly, a former Managing Director, Nigerian Liquefied and Natural Gas (NLNG), Dr Godswill Ihetu, said the industry requires more funding, to compete with globally.
This, he said, would enable foreign and local operators finance big-ticket operation in the industry, adding that some operations need deep capital to grow.
He urged the Federal Government to provide indigenous operators with tax waivers, adding this would enable them play in the areas hitherto dominated by foreign oil giants.