Global energy powerhouse TotalEnergies presented five key recommendations to industry stakeholders yesterday, aimed at revitalising Nigeria’s oil and gas sector, which has faced over a decade of underinvestment, production decline, and slowed momentum.
TotalEnergies outlined the need for attractive investor entry costs and market-reflective signature bonuses for oil blocks during bid rounds. Additionally, the company highlighted the importance of clearly defining the “back-in right” of the Nigerian National Petroleum Company Limited (NNPC) before transferring assets to new leaseholders and operators.
Further suggestions included re-licensing unexplored or expired oil and gas blocks to new holders and enforcing the “Drill or Drop” clause from the Petroleum Industry Act (PIA), designed to prevent companies from holding assets without generating value.
Mr. Matthieu Bouyer, Chairman of TotalEnergies Companies in Nigeria and Managing Director of TotalEnergies EP Nigeria Limited, put forth these recommendations at the 42nd annual conference of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos. Represented by Mr. Olatunji Akinkumi, Executive Director of Corporate Services, Bouyer acknowledged that while Nigeria has taken significant steps toward competitiveness, more progress is needed.
“The first is to have more attractive entry cost and conditions for exploration in new blocks. We urge the provision of market reflective signature bonuses and the consideration of a ‘drill or drop’ clause in the exploration phase of these new blocks,” he said.
He also encouraged facilitating strategic partnerships to access expired deepwater blocks. “We expect encouragement or facilitation in unexplored but expired deepwater blocks through the creation of strategic partnerships within the industry,” Bouyer explained.
Bouyer urged the government to clarify NNPC’s back-in right terms before the licensing rounds and asset leases, suggesting that this right should be cash-funded and limited to a minimal strategic holding. “Government should confirm the terms of the back-in rights clearly prior to licensing round and leasing of assets. The back in right should be cash-funded and reduce most probably, to a strategic minimum holding,” he stated.
Addressing security, he proposed that host communities become part-owners of energy infrastructure, as this could foster cooperation with the government on asset security. “We encourage the development of a robust strategy for host communities to be part owners of energy infrastructure, which will serve as motivation to cooperate more with government and other stakeholders on asset security,” Bouyer noted.
He further urged regional cooperation among West African countries to strengthen maritime security across the sub-region.
Bouyer also refuted claims that TotalEnergies is exiting Nigeria, despite its divestment from onshore assets, affirming the company’s long-term commitment to the country. “We are proud and honoured to say that we are in Nigeria for the long term. We will not and we are not considering leaving Nigeria,” he stated, adding that TotalEnergies will continue supporting sustainable development efforts in Nigeria.