L
LequteMan
Guest
Speaking at a forum in Lagos during the weekend, Mr. Michiel Soeting, Global Head, Energy and Natural Resources Practices, KPMG, warned that the discovery and exploration of Shale oil and gas across the globe will put Nigeria’s economy at serious risk, unless the country can churn out policies that will bring about increased investment in the oil and gas sector and ensure stable power supply.
Shale oil is almost the same specification with Nigeria’s Bonny Light, according to him and it will bring about stiff competition and reduce the demand for Nigeria’s crude.
He added that Nigeria’s ability to finance its budget will be greatly threatened, unless measures to grow its crude production capacity, diversify the economy, as well as build additional crude oil refineries are put in place. According to him, these will significantly reduce the effect of Shale oil discovery on the country’s revenue.
Also speaking, Mr. Dimeji Salaudeen, Partner, Risk Consulting/Head, Africa Oil and Gas Sector, said with the advent of Shale, Nigeria will cease to be the major supplier of crude to the six largest economy of the world, adding that Nigeria’s ability to finance its expenditure as well as accumulate its foreign reserves will be greatly hampered.
In his own view, Mr. Victor Onyenkpa, Partner and Head, Tax, Regulatory and People Services, KPMG, said with Shale discovery, Nigeria will have to look elsewhere to sell its crude, as many of its current customers will become energy producers.
He said if Nigeria’s policies are seen to be unfavorable, the IOCs will divest and move elsewhere, adding that with the Federal Government’s policy of handing the divested assets to indigenous oil companies and granting the companies a pioneer status and five year tax exemption, the country will be forfeiting a huge amount of revenue that is supposed to come from those taxes.
He noted that Nigeria can only guarantee an increase in its production capacity if it is able to attract investors into the petroleum sector, adding that this can only be possible if the country’s fiscal terms are attractive to the potential investors.
According to him, shale discovery has brought about the urgent need to diversify the economy. He however noted that diversification of the economy will be very successful if the epileptic power situation is addressed.
Shale oil is almost the same specification with Nigeria’s Bonny Light, according to him and it will bring about stiff competition and reduce the demand for Nigeria’s crude.
He added that Nigeria’s ability to finance its budget will be greatly threatened, unless measures to grow its crude production capacity, diversify the economy, as well as build additional crude oil refineries are put in place. According to him, these will significantly reduce the effect of Shale oil discovery on the country’s revenue.
Also speaking, Mr. Dimeji Salaudeen, Partner, Risk Consulting/Head, Africa Oil and Gas Sector, said with the advent of Shale, Nigeria will cease to be the major supplier of crude to the six largest economy of the world, adding that Nigeria’s ability to finance its expenditure as well as accumulate its foreign reserves will be greatly hampered.
In his own view, Mr. Victor Onyenkpa, Partner and Head, Tax, Regulatory and People Services, KPMG, said with Shale discovery, Nigeria will have to look elsewhere to sell its crude, as many of its current customers will become energy producers.
He said if Nigeria’s policies are seen to be unfavorable, the IOCs will divest and move elsewhere, adding that with the Federal Government’s policy of handing the divested assets to indigenous oil companies and granting the companies a pioneer status and five year tax exemption, the country will be forfeiting a huge amount of revenue that is supposed to come from those taxes.
He noted that Nigeria can only guarantee an increase in its production capacity if it is able to attract investors into the petroleum sector, adding that this can only be possible if the country’s fiscal terms are attractive to the potential investors.
According to him, shale discovery has brought about the urgent need to diversify the economy. He however noted that diversification of the economy will be very successful if the epileptic power situation is addressed.