THE Federal Government has renewed its call on major engineering, procurement, and construction (EPC) companies to return to Nigeria, assuring them that previous concerns in the sector had been addressed through bold reforms and investor-focused incentives.
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, gave the assurance at the EPC Deepwater Investment Roundtable organised by the Oil Producers Trade Section (OPTS) in London at the weekend.
He declared that Nigeria was ready for business under a transformed operating environment.
“When we say Nigeria is open for business, we’re not making a statement of intent; we’re pointing to the reforms we’ve implemented, the policies we’re enacting, and the partnerships we’re building. The landscape has changed, and this can be confirmed directly from the IOCs, who are already seeing the results,” the minister said in a statement signed by his Special Adviser on Media and Communications, Nneamaka Okafor, on Sunday, September 7.
He highlighted the reasons many EPC firms had scaled down or exited Nigeria in the past, such as contracting inefficiencies, regulatory ambiguity, security issues, and fiscal uncertainty.
“But those reasons no longer exist. Through the Petroleum Industry Act (PIA), we have streamlined fiscal terms, strengthened regulatory clarity, and committed to project security in partnership with the Nigerian Navy and other security agencies,” he said.
The minister appealed to International Oil Companies (IOCs) and deepwater operators to continue making Final Investment Decisions (FIDs), stressing that EPC firms would only return if there were active projects.
“The EPCs will not return if there are no projects, and there can be no projects if operators are not investing. I want to thank those who are already taking advantage of the government’s efforts, but we must do more. The projects must flow for the EPCs to come back,” he stated.
Lokpobiri highlighted the globally competitive incentives under the PIA for deepwater operations.
These include reduced royalty rates for deep offshore production, ranging from five per cent to 7.5 per cent depending on water depth; removal of cost recovery limits, allowing companies to recover full development costs before profit sharing; tax credits and allowances for frontier exploration; contract sanctity and investor protection mechanisms to guarantee stability; and streamlined approvals with shorter contracting cycles currently under review.
He emphasised that these incentives were not designed for IOCs alone but would also extend to EPC contractors executing technically demanding projects.
“These giant EPC companies, who once left, are exactly the kind of players who can thrive in deepwater. The same way we have fine-tuned incentives for operators, we will ensure those benefits are extended to EPCs, because without them, these projects cannot be delivered,” he said.
The ICIR reported that President Tinubu’s recent visit to Brazil once again reignited talks for the return of Brazil’s state-owned oil company, Petrobras, to Nigeria, which focuses largely on deepwater offshore oil investments.
Brazil’s state-run oil company Petrobras, which left Nigeria five years ago, should be able to return quickly, Nigerian President Bola Tinubu told a press conference with his Brazilian counterpart, Luiz Inacio Lula da Silva, during the visit.
“We have the largest gas repository. I don’t see why Petrobras shouldn’t return as a partner in Nigeria as soon as possible,” he added.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.