The high incidences of litigation is putting many international oil companies (IoCs) under pressure to leave their onshore operations in Nigeria.
The minister of state for petroleum resources, Chief Timipre Sylva revealed this yesterday in Abuja, at the 2021 national oil and gas workshop for justices and judges.
He recalled that on the assumption of office, he realised that the industry had the penchant of suing the oil firms in court.
The practice, according to him, was impeding the growth of the industry.
He said this has made a workshop on the activities of the oil and gas industry apt, especially as the implementation of the Petroleum Industry Act (PIA) would provoke more court cases.
He described litigation as one of the major factors retarding onshore operations in the country.
The theme of the workshop was “Petroleum Industry Act New Legal and Fiscal Regime in the Nigerian Oil and Gas Industry.”
He said: “We must start from the judiciary because I can tell you that this is one of the weakest links in the oil and gas industry.
“When I first came in as minister of state… what someone discussed with me was quite disturbing; he said he had a lot of cases in the court. He wanted us to support him to win the cases. I realised that’s what was happening in the oil industry.
“The industry was taking oil companies to court. He said he had over 200 cases in court and unfortunately, it has impeded the growth of the industry.
“Today, I can tell you that a lot of oil companies are contemplating leaving the onshore of Nigeria. And one of the biggest problems we have onshore in Nigeria is incessant court cases that reverberate across the industry.”
The minister said PIA came at the time that the industry is facing challenges arising, not only from the domestic environment, but from the wider international environment.
He noted that apart from the current COVID-19 crisis which caused the worst recession experienced globally since 1929, the industry was facing other critical challenges.
Sylva added that several nations have announced the intent to comply with the Paris Agreement 2016 and have adopted climate change policies with a target of being carbon neutral by 2050 or 2060.