This week sees the launch of the 16th Nigeria Oil and Gas (NOG) Conference and Exhibition and Nigeria Power Forum, the annual gathering of the leading figures and organisations in the Nigerian oil and gas sector. In another challenging year for resources in Nigeria, will this year's conference proceedings seek to calm nerves, explore baseline issues or attract renewed interest from overseas players?
What is immediately noticeable from this year's proceedings is the prominence of local companies, an encouraging development that is reflective of the opportunity that exists to strengthen and empower local content producers. It has certainly been a good year for local players, no more so than for Aiteo Group which is sponsoring the conference along with some larger international companies for the first time.
We welcome Nigeria Energy Week's openness to working with and featuring the achievements of Nigerian companies – it is the sort of progressive approach of that will see Nigeria's business environment blossom again. Aiteo's vision has always been to create the most sustainable energy solutions to power growth on the African continent and we believe that this aligns strongly with the outlook of the NOG. Aiteo is just one of a number of companies that has proven to the world that indigenous oil companies are competent enough to participate along with international oil majors in the exploration and development of Nigeria's hydrocarbon resources.
But to truly understand how far down this path we have moved, we must consider the progress that has been made against the recommendations of last year's conference. The primary recommendation that emerged from the Nigeria Energy Week 2016 was that the only way to reduce risks, promote capital investments and ease bankability was to urgently and significantly improve regulatory stability and predictability. Whilst there remain areas of instability, such as the ongoing security concerns within the Delta, attacks on pipelines are actually at their lowest in months. We are looking forward to a fresh analysis of the security situation in the Delta in this week's “Combating Crude Oil Theft and Pipeline Vandalism through Stakeholder Collaboration” panel. Elsewhere, with the final reading of the amended Petroleum Industries Bill (PIB) scheduled for March, we certainly look on a more positive path towards regulatory stability.
Last year's conference also wholeheartedly agreed that interest and exchange rates policy was in immediate need of attention if our struggling sector was going to encourage investments. In the last 12 months we have seen the partial floating of the Naira, but there is still a desperate shortage of dollars in the economy. Privately sourced dollars are often trading at upwards of N500, compared to the official rate of around N310. Compounding the stress, the oil price is still less than half of its 2011 value, at just over $50 a barrel. Alongside this, November 2016 saw annual inflation reach 18.48%, the highest it has been in over a decade. It is not a pretty picture, and something that I hope will be discussed at length in the opening address on “Reforming & Repositioning the Oil & Gas Industry in Nigeria.”
Regulation and stability aside, the recommendation that stuck in my mind from last year's conference was one that is closest to Aiteo's immediate interests: the need for indigenous oil companies to focus on improving technical and operational capacity, alongside project development skills and credit ratings. I believe that an efficient and prominent Nigerian Oil and Gas sector with indigenous companies leading the forte is our country's surest way out of dwindling oil price regimes and recessionary pressure. But how to effect this change in reality?
It is a subject that my colleague Chike Onyejekwe, Managing Director of Aiteo, will be discussing alongside senior figures from the Nigerian National Petroleum Corporation (NNPC) at the panel “Resetting Nigeria's Oil & Gas Industry – Reviewing Global Trends” this week. We are looking forward to sharing our experience with legacy investments in the gas-to-power value chain, but more importantly to learning from the experiences of our peers working to redefine the industry.
This is the real strength of the Nigeria Oil and Gas (NOG) Conference and Exhibition and Nigeria Power Forum: the relationships that can be formed from the experiences that can be shared. Local content producers in Nigeria are all facing the same challenges and working to build within an uncertain trading environment. But we are all in this together, and Aiteo is looking forward to building strong and mutually beneficial relationships within the communities we work and within the sector in which we operate.
The 16th Nigeria Oil and Gas (NOG) Conference and Exhibition and Nigeria Power Forum takes place between February 27 – March 2 at the International Conference Centre (ICC), Abuja.
Benedict Peters the CEO and Vice President of Aiteo Group, an integrated energy group involved in exploration, production, refining and supply.
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