The managing director of Nigerian Liquefied Natural Gas (NLNG) Limited (NLNG), Tony Attah, has explained the key factors responsible for its success story as one of the most profitable ventures in which the government has a stake.
According to him, they are the NLNG Act along with the shareholding and governance structure of the company.
He noted that the NLNG Act provided incentives, assurances and guarantees which significantly encouraged investment in the project.
He stressed that experience has clearly shown that countries cannot hope to legislate investments into existence without addressing issues relating to accompanying incentives, guarantees, and assurances.
Attah who spoke during a technical session chaired by Maikanti Baru, group managing director of Nigerian National Petroleum Corporation, at the ongoing 22nd Nigerian Economic Summit (NES) in Abuja, under the theme: “Creating a global Champion from Made in Nigeria: The NLNG story”, delivered a presentation which took a position on the undesirability of some current developments.
He noted that 18 years after the major breakthrough which NLNG represents, certain stakeholders in the country continue to make attempts to undermine the Act. He added that the courts have been firm on the provisions of the Act in instances where court cases were instituted by third parties to compel company to pay levies.
“These attempts are apparently continuing outside the courts, but we are hopeful that the country’s leadership will protect its commitment through the Act as well as avoid the portrayal of the country as one that does not honour agreements.”
He also drew attention to the fact that the enablements have allowed Nigeria LNG to be able to generate $85 billion in revenues, pay $5.5 billion in taxes as well as to commit more than $200m to corporate social responsibility projects especially in the areas of capacity building and infrastructure development.
He added: “These incentives made it attractive for the international investors and financiers to invest even during a period Nigeria was perceived to be a pariah state. Those investments grew and they resulted in an inspirational Nigerian success story that the company is today, with assets now worth over $13 billion.
“The ownership mix, with the Nigeria Government, through the National Oil Company owning just 49%, and having international companies owning 51% has brought tremendous benefits. Most importantly, it has allowed significant funding through international banks required for the construction of both the plants and the ships. Secondly, such a mix has ensured that the international companies bring to bear on the company, international standards and best practices. Thirdly, with a significant shareholding, the government, through NNPC, has been able to drive the national agenda for social and nationalistic causes such as the “Nigerianization” plan. That plan has directly resulted in a corps of well-trained Nigerian professionals, many of whom have had the opportunity to understudy and eventually succeed expatriates over a period of time.”
NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%), Shell Gas BV, SGBV, (25.6%), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4%).