Nigeria: French oil giant Total warns proposed oil bill will hurt foreign investmentBy Jon Gambrell, AP
Tuesday, September 21, 2010
Nigeria: Total warns oil bill will hurt industry
LAGOS, Nigeria — A top official at French oil major Total SA warned Tuesday that a proposal to overhaul Nigeria’s oil industry would hobble foreign investment, just as the firm prepares to bring a major offshore field into production.
Guy Maurice, managing director and chief executive of Total’s Nigerian subsidiary, told reporters that his company would respect any regulations put in place by the passage of the proposed Petroleum Industry Bill. However, he described the overhaul as akin to reneging on promises made to long-term investors in Africa’s most populous nation.
“It’s like the investors being told: ‘It’s too bad for you,’” Maurice said during a news conference. “There’s a feeling of uncertainty which has slowed down the speed of different types of investments over the last two years.”
Analysts say the petroleum bill would sharply reduce the profits of foreign oil companies like Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell PLC and Total, all of whom have subsidiaries operating oil fields in Nigeria. Government officials say the bill would allow more oil money to return to Nigeria’s people. The bill also would require the government-run Nigerian National Petroleum Corp., which partners with all foreign oil firms, to seek profits like a private business and not rely on government subsidies.
The proposed bill drew an angry response from foreign oil companies. Shell, the dominant oil company in the nation, warned the government in June that $40 billion of planned investments for Nigeria could be in jeopardy if the bill becomes a law.
The bill, proposed under the tenure of late President Umaru Yar’Adua, has languished in the National Assembly since his May 5 death. President Goodluck Jonathan made initial promises to back the bill after taking office, but hasn’t brought it up again.
Total, which first entered Nigeria in 1962, pumped out 235,000 barrels of oil a day from the nation last year. The company acknowledged in its most recent annual report that pipeline vandalism and security concerns continue to affect production. Militants in the country’s oil-rich Niger Delta — upset by oil spills and the region’s endemic poverty — have targeted pipelines, kidnapped petroleum company workers and fought government troops since 2006.
Violence in the region has dropped with the introduction of a government-sponsored amnesty program last year for militants, though thieves continue to tap into pipelines to steal crude oil.
“We all can agree that the amnesty strategy is the right one,” said John Ehi Addeh, executive director of human resources and corporate affairs for Total’s Nigerian subsidiary. “The results speak for themselves.”
Pauly Enujuba, a spokesman for the Total subsidiary, said the company had no figures for how much oil it spilled or lost due to attacks, oil thefts or failing pipelines. Environmentalists say that in over 50 years of production in Nigeria, companies have spilled oil at a rate roughly comparable to one Exxon Valdez disaster per year.
Total, like other oil majors, have begun searching for new oil fields offshore — in part to avoid the militants. Total opened its $6 billion Akpo field last year, which it estimates will provide 225,000 barrels of oil equivalent per day.
Now, the firm is preparing to bring the offshore Usan field into production by January 2012. The company estimates as much as 180,000 barrels of oil equivalent a day will flow from it as peak production. Total partnered with Chevron, an Exxon Mobil subsidiary, Nexin Inc. and the Nigerian national petroleum company on the Usan field.
Total SA: total.com/
Tags: Accidents, Africa, Energy, Energy And The Environment, Environmental Concerns, Lagos, Nigeria, West Africa