France’s Total seeks clarity on Nigerian petroleum law reforms

ABUJA – The chief executive of French energy firm Total has urged Nigeria to boost transparency and lay down clearer rules for foreign partners as it pushes through reforms in its mainstay oil and gas industry.

President Umaru Yar’Adua sent parliament an energy reform bill last August that restructures state oil firm NNPC into a profit-driven company and reviews the fiscal environment in which foreign firms operate.The legislation, which has been planned for more than a decade, has been promoted by its drafters as the answer to many of the sector’s problems, like funding shortfalls, domestic gas shortages and budget-debilitating fuel subsidies.Some industry executives have expressed concern that foreign oil firms are not being consulted thoroughly enough and that the legislation could impact existing contracts.’We know we need a new framework but we also need to make sure we understand what our future is going to be … We need to understand the rules of the game,’ Total Chief Executive Christophe de Margerie said in Abuja late on Tuesday at the inauguration of its 185 000 barrel per day Akpo oilfield, which started production in March.’We have existing contracts which are prevailing now for many years – production sharing, formal concession, etc – so we need to clarify, to be more transparent,’ he said.The revamp will break up NNPC into a handful of autonomous units and allow the new national oil firm to raise funds on the capital markets, instead of relying on government revenues.The reforms envisage a Nigerian firm operating like former Brazilian oil monopoly Petrobras, Malaysia’s government-owned Petronas, which have dozens of subsidiaries, or Saudi Arabia’s state giant Saudi Aramco.Funding shortfalls at NNPC have forced Total, as well as Anglo-Dutch giant Royal Dutch Shell and US firm ExxonMobil, to provide billions of dollars in bridge financing to sustain joint-venture projects.Senior Nigerian officials have said they are trying to balance the concerns of the oil industry with Nigeria’s own need to derive the maximum benefit from its natural resources, both through taxation and in meeting its domestic energy needs.’We are confident that further constructive engagement with the National Assembly members, the Ministry of Petroleum Resources and stakeholders will see a pragmatic balance between all expectations,’ Margerie said.Ann Pickard, Shell’s regional executive vice president for Africa, said in February that in order to be successful, the reforms would need to ‘address funding, security, eliminate uncertainties and improve transparency’. -Nampa-Reuters