—Urges FG to act swiftly despite cost-reduction incentives

—Says politics affecting refineries

THE Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, on Monday, raised the alarm that worsening insecurity in Nigeria’s oil-producing areas, especially in the waterways, is forcing multinational oil companies to divest from the country, despite newly introduced cost-saving incentives by the Federal Government.

PENGASSAN has also called for the introduction of the Nigeria Liquefied Natural Gas, NLNG, models in the management of refineries in the country by bringing in certified investors.

This is as it has said that some refineries are shut down based on politics and not operational problems.

Briefing journalists in Abuja, the President of PENGASSAN, Comrade Festus Osifo, said that while the recently signed Upstream Petroleum Operations Cost Efficiency Incentives Order (2025) by President Bola Tinubu was commendable, it failed to address the root causes of the high cost of production, which he said is most notably, insecurity.

He said: “The reason, the chief reason, the majority of the oil and gas operators, the international oil and gas companies started leaving Nigeria is principally because of insecurity.

“The cost of securing facilities, the cost of securing infrastructure in the Nigerian oil and gas industry became prohibitive. That is why they found places like Mozambique, Guyana, Angola, and Congo much more attractive.”

The Executive Order, signed in May, introduces performance-based tax credits up to 20%, for upstream companies that meet defined industry benchmarks for cost efficiency.

While PENGASSAN acknowledged the effort, Comrade Osifo insisted that without government-backed security, the real issue would remain unresolved.

“For one offshore installation, you have a minimum of three or four security vessels, manned by naval personnel, paid for by the companies daily. That’s not the case in countries like Ghana, where the government provides this protection.”

He urged the government to take full responsibility for safeguarding oil installations, emphasising that oil companies should not bear such heavy security costs, which he described as “running into hundreds of millions of dollars per annum.”

The PENGASSAN president also raised concerns over fuel pricing transparency.

He said despite significant reductions in global crude oil prices from $80 to around $60 per barrel, Nigerians did not enjoy a proportionate drop in petrol pump prices.

According to him: “When crude was at $60 per barrel, we should have been buying petrol at N700 to N750 per litre, not N900. Nigerians were exploited during that period.”

He called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to “do everything possible to ensure Nigerians are not exploited.”

PENGASSAN further recommended that the Federal government adopt the NLNG partnership model for the country’s ailing refineries, particularly the Port Harcourt refinery, which was recently shut for maintenance.

Osifo said the model would see the government hold minority stakes while allowing experienced private investors — particularly international oil firms — to take majority control.

“This model has worked for NLNG. So, why can’t we replicate the same structure in the management of our refineries to eliminate political interference and promote efficiency?” Osifo queried.

He also touched on recent developments in local content enforcement, revealing that PENGASSAN had signed an agreement with Sterling Oil Company aimed at limiting expatriate dominance and ensuring Nigerian workers are trained to take over jobs.

On the occasion of Nigeria’s Democracy Day, Osifo reminded the federal government that the true spirit of June 12 lies in delivering good governance and improving citizens’ welfare.

“Democracy should bring food to the table, quality healthcare, access to education and jobs for Nigerians. After 26 years of uninterrupted democracy, we should not still be grappling with necessities,” he stated. (Vanguard)