From Business Day

A new report released by the Norwegian research group DNV GL, further reinforces the long held view that failure of Government to pass the Petroleum Industry Bill (PIB) is damaging Nigeria’s oil and gas sector.

With global oil and gas companies set to keep a tighter rein on capital expenditure in 2014, Nigeria topped industry leaders’ list of least favorable countries to invest in this year, according to the new research report published by Norwegian research group DNV GL, the leading technical advisor to the oil and gas industry.

Analysts say that the delay in the passage of the Petroleum Industry Bill (PIB), which is expected to overhaul the Nigerian oil industry, has continued to cause uncertainty, limiting investments in the vital industry.

The report which was published on Monday, said security issues, corruption and political uncertainty leave Nigeria as the least favorable country to invest in, as it was in 2013.

Other key destinations regarded as highly risky for investment, according to the DNV report, include Iraq, Afghanistan, Russian and Iran.

The United States, Brazil and Australia are the top investment destinations for 2014, with larger operators seeking to expand into challenging new environments such as deepwater sites in East Africa. In fourth place is Malaysia, up from eighth in 2013, followed by China, which rose one spot to fifth place.

In what is a reflection of the growing status of East Africa as the new investment frontiers, Chinese and Indian national oil companies spent over $9bn on deals in Mozambique during 2013, excluding the fourth quarter, according to the report.

The report identifies rising operational costs, an ongoing skills shortage and competition from new international rivals as factors that will define the industry’s barriers to growth in 2014.

The report entitled ‘Challenging Climates: The outlook for the oil and gas industry in 2014’, which is an annual litmus test for industry sentiment in the year ahead, was produced with input from a survey of more than 430 oil and gas professionals and in-depth interviews with more than 20 industry executives.

Written by Femi Asu | Read more at Business Day