Competition, Fiscal Incentives’ll Drive Deep Water Projects’ Cost – TotalEnergies

TotalEnergies says good fiscal incentives, and competition will drive costs down the cost of production in the oil and gas sector, especially in the deepwater.

It stated that the deep water segment in Nigeria has been stuck for 10 years.

In a bid to move the deep water projects of the Nigerian oil and gas sector forward, Country Chairman and Chief Executive Officer of TotalEnergies EP Nigeria Limited, Mathieu Bouyer stated this has therefore called on the Federal Government to ensure good fiscal incentives and healthy competition that will drive operating costs of production down, stressing that the deep water segment of oil and gas industry in Nigeria has been stuck for 10 years since the Egina Final Investment Decision (FID).

Bouyer made this known at the ongoing 23rd Nigeria Oil and Gas (NOG) conference, themed, “Showcasing Opportunities, Driving Investment, Meeting Energy Demand’’.

Speaking in a session titled: “Defining The Outlook For Deep-Water Exploration and Production in Nigeria”, he blamed the gap on high operating costs and lack of contractors and competition in Nigeria.

He listed increases in levies, changes in fiscal terms, lack of contractors, competition in regional markets and comparatively high operating costs as reasons behind the development.

According to him, many contractors have left the country and this has increased the lack of competition in the sector. He said there was a need for the Federal Government to understand why they left and put some measures in place to bring them back.

“Even with the fiscal incentives, if the costs are too high, investment will not be possible, therefore, there is need for competition to drive the costs down. “As Capex are capped, arbitration are made. So it’s important to be competitive and agile to accommodate requirements,’’ he said.

Bouyer, recalled that the Service Level Agreement (SLA) signed in September 2023 between NNPC and the international oil companies (IOCs) on the contracting process SLA signed proved to be efficient on the Ubeta development project.