Bala Wunti
FeaturedHighlightOil & GasTrending Story

Why Nigeria’s oil and gas is less attractive to investors – Wunti, GGM, NAPIMS

608

 

The Group General Manager, the National Petroleum Investment Services (NAPIMS), Bala Wunti, has identified factors that make Nigeria’s oil and gas industry to be less attractive to investors in the competitive global market.

 

According to him, the nation’s oil and industry has become less attractive today because the oil is not clean and it is being discriminated against.

 

Highlighting the inhibiting factors as dirty oil and high unit operation cost of producing a barrel of oil, the GGM said if the security challenges being experienced in the oil region were fully addressed, the cost would go down and the country would make more money.

 

Persecondnews.com reports that Wunti spoke while contributing to a virtual conversation titled, “What do investors earn in a $70 oil price as a return? What is the trend of the capital for energy: Where is it going? How is it behaving?’’

 

He posited that currently out of $70 per barrel, only $10 dollars is left out of which the Federal Inland Revenue Service (FIRS) will collect 85 %  of it as taxes, leaving a paltry of $1.5 that will go to investors.

 

“As of today, we are in the neighbourhood of 20, 22 dollars and if you take 20% off $70 and if you have 22 % you still keep waterfalling. You now invest in your capital expenditure and it will take about 15 dollars and you are still waterfalling, you are likely left with about $10 in a $70 well.

 

“There are two people that need the $10 dollars – FIRS want their taxes – 85% of the $10 ($8.5) and what is left is crumbs of $1.5 and that is what goes to investors.

 

“Will the investors be ready to invest in the barrel that way? Certainly, No. what is that you can play with again?’’ Wunti stressed.

 

The NAPIMS boss, however, expressed the hope that the Petroleum Industry Act (PIA) would remove uncertainties and bring competitiveness into the nation’s oil and gas industry when fully operational.

 

He said:“The PIA will remove uncertainties and bring clarity and competitiveness. Our view is that numbers will come down but not only that. If we attack the security challenges our cost will invariably go lower. We need to collaborate with service providers – petroleum operators and non-operators. When we do that we can attack the cost of producing the barrel.

 

“And if we can attack the cost of producing the barrel to say $20 as unit technical cost, then it, therefore, means that what we share with tax man and the investors will increase. The higher it is the better. That is the need and criteria for us to continue to attract the way and manner we finance our barrel.’’

 

On investment capital, Wunti said there was plenty of money looking for investment destination; where to invest but added that the investors are looking for cleaner energy to invest.

 

“Our oil and gas certainly as we know is anything but clean especially the oil. We are going to be discriminated against. Capital is no longer non-discriminatory; it is very discriminatory and unfortunately, we are the less attractive industry today.

 

“The second thing is that everybody wants fast rewards; nobody wants to wait for his rewards in heaven. Nobody wants to wait for 10 years to get the benefits of his investment. You want to invest now and get the rewards next hour.

 

“This is what we have seen about capital. Contextualize that in our own industry; our industry is a very slow-moving, very long cycle and very rich averse. People want to attract capital,’’ he explained.

 

Wunti asked:“How can we attract that capital and that has created a balance. Can we create a confluence between data and hydrocarbon for example? Can we create a confluence between oil and non-oil resources? 

 

“Can we create carbon neutrality? Can we anchor our investment focus on our gas which is low carbon-intensive which has the potential to attract more capital?

 

“And I think that is the prospect and if we do that, it, therefore, means we are not only positioning ourselves to take advantage of the current situation, but we are really ready to explore into the future.’’

 

Continuing, Wunti said:“If we need to benefit we need to go with two lenses – exploit to the fullest and optimally what you have today. But while doing that, don’t forget that you need to position yourself to take advantage of tomorrow because of relevance.

 

“Your relevance will create your resiliency, agility and tenacity and that is the question. In financing the barrel, therefore, what does the barrel represent? What is the barrel today – is it $50, $70, or $80 etc ? Do the waterfall. In investment, we talk of waterfall, when you waterfall $70, who takes what?’’

 

“The first thing that goes is to DPR in terms of their royalty and it is 10%, 20% straight. The first line charges — your operation cost etc. When you have $70 you can take 20% and see what is left,’’ Persecondnews quotes Wunti as saying.

Leave a comment

Related Articles

Ancelotti’s Future in Doubt as Real Madrid Exit Champions League

Carlo Ancelotti’s tenure as Real Madrid manager appears to be drawing to...

Defection in FCT: Ganduje, Kogi Gov. Ododo, Barua, others welcome AMAC chairman, Maikalangu, 30, 000 PDP members to APC

The Abuja Municipal Area Council (AMAC) Chairman, Christopher Zakka Maikalangu, on Thursday...

Liverpool Captain Virgil van Dijk Signs New Two-Year Contract

By Samuel Akpan with additional agency report In a significant boost for...

AGFCS Urges FG to Address Plateau Violence, Warns Against Collapse of Social Order

The Action Group on Free Civic Space (AGFCS), a coalition of civic...

Enhanced Synergy Key to Improving Business Environment, Says PEBEC Retreat

The Presidential Enabling Business Environment Council (PEBEC) has restated the importance of...

Arsenal Stun Real Madrid with 2-1 Victory, Advance to Champions League Semi-Finals

Arsenal secured a stunning 2-1 victory over Real Madrid at the Santiago...

Strategic Partnerships Key to Achieving Presidential Mandate, Says NNPCL GCEO

Joycelyn Ellakeche Adah The newly appointed Group Chief Executive Officer of NNPC...

Just in: Reps committee invites Rivers administrator for oversight hearing

The House of Representatives Ad-hoc Committee on Rivers State Oversight has invited...

Korean Intelligence Service Lauds NDLEA for Busting Notorious Drug Baron, Requests Suspect’s Extradition

The National Drug Law Enforcement Agency (NDLEA) has received commendation from the...

15 Million Nigerians at Risk of Flood Disasters in 2025 – VP Shettima

At least 15 million Nigerians are at risk of flood disasters in...

AIG Olaiya to FCT CP: Maintain peace, stability in nation’s seat of power, we can’t afford to let anything go wrong

Zone 7’s Assistant Inspector General (AIG), Victor Olaiya, has charged FCT Police...

Mass media’s partnership critical tottsSactualization of Pres. Tinubu’s renewed hope agenda – Rep Abejide

Rep. Leke Abejide (Yagba East/Yagba West/Mopamuro Federal Constituency, Kogi) of the Federal...

Champions League Quarterfinals: Arsenal Aims to Seal Semi-Final Berth Against Real Madrid

Arsenal is set to face Real Madrid in the Champions League quarter-final...

Lagos govt. collaborates with REA to install rooftop solar to power public institutions

By Joycelyn Ellakeche Adah As part of the initiative to change Lagos’...

Ogun Dazzles with Outstanding Preparedness for Gateway Games 2025

The National Sports Commission (NSC) has expressed satisfaction with Ogun State’s level...

US set to strengthen energy ties with Nigeria, says NNPCL Spokesman, Soneye

The United States and Nigeria have reaffirmed their commitment to collaboration in...

N1.3trn CBEX fraud: Interpol, EFCC launch probe

The Economic and Financial Crimes Commission (EFCC) says it has launched an...

Rivers Administrator summons Fubara, deputy, to justify reinstatement, appointments made

Rivers Sole Administrator, retired Vice Admiral Ibok-Ete Ekwe Ibas, has summoned the...

Trump’s Tariff Policies Spark Oil Market Volatility, Threaten Nigeria’s Economy – NMDPRA Boss

The Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory...