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Oil majors suspend $190bn investment over Petroleum Industry Bill

By BusinessNews Staff on May 10, 2014

Major oil and gas producing companies operating in Nigeria have suspended new investment in offshore exploration because of the planned Petroleum Industry Bill (PIB), which the companies said has high taxation arrangement.

This was disclosed by the Managing Director of Bristow Helicopters, Captain Akin Oni, whose company provides shuttle services to these oil companies.

Oni said the exploration and production companies had planned investment worth over $190 billion in the deep offshore, but these investments had to be suspended because the PIB bill is unfavourable to their business.

He said that Bristow, which services these companies does not have new contracts from them because there are no new investments.

“The PIB is making the oil majors not to invest in deep waters because of the taxes in the proposed bill. If the market is open it means we will go farther and deeper which will give us more money; higher revenue. So the $109 billion planned investment is trapped because of the bill. But to me the PIB is a key path to growth,” Oni said.

The Bristow Helicopter boss said that over the last year the oil and gas market has been flat. He said while the company did not lose any of its clients, it did not get new clients either as the oil companies are not willing to spend more money.

“Over the last year the business has been essentially flat. So we have not lost our market share, which is a good thing us. If you look at the operating environment, our business is largely driven by the oil industry and in the last year, because of the PIB, there has been a great deal of reluctance by the old majors to spend money, that is, investment in new fields. So we have retained our share of the market and we have not increased or decreased the business in the year. And we are very happy with that,” Captain Oni said.

He noted there is a lot of competition in the market now and the only opportunity the company may have would be the passage of the PIB or the companies decide to venture into the deep water market without approval of the PIB and that would open new opportunities.

Oni said Bristow has invested in its Nigerian business and built the biggest heliport in Port Harcourt with sophisticated facilities, adding that the company also built a new hangar, which it later extended to make it sizeable enough for its growing business.

“If you look at our business today I can say that we have built probably the biggest heliport in West Africa in Port Harcourt and with modern facilities. In the last year we had also built a new hangar and extended the new hangar. It is probably the most sophisticated and the best facility that I have seen in this part of the world,” Oni said.

He added that fire engulfed its hangar in Port Harcourt, devastated the company’s equipment, including Super Puma helicopter which was extensively damaged.
Oni said oil and gas companies are now moving their business from Lagos to Port Harcourt because of the growing confidence due to the changes that have taken place in the Niger Delta

[This Day]

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