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Nigerian oil industry overhaul slowing investment

LAGOS, Sept 21 – The head of Total\’s oil production in Nigeria said Tuesday that uncertainty over the government\’s plans for a major overhaul of the country\’s petroleum industry has slowed investment in new projects.

Guy Maurice said investors in large projects such as Total\’s new Usan deepwater offshore field set to come on stream in 2012 needed assurance that the terms of contracts would not change after new industry rules take effect.

"For us, the stability of the contract is very, very important," the chief executive of Total\’s upstream companies in Nigeria told journalists.

"I have to recognise that the long discussions around (oil industry legislation) has created in the industry — not only Total, but in the industry at large — a feeling of uncertainty."

Maurice said the appetite for investment had decreased because it was unclear how legislation currently before lawmakers would turn out and whether guarantees would be put in place for existing projects.

Nigeria has been seeking to reform its oil industry regulations to collect more revenue from deepwater offshore projects, among other issues.

Oil companies have been pushing for a guarantee that the terms of existing contracts will not change once the legislation is approved.

France-based Total is among the major oil producers in Nigeria and expects to bring its new Usan field onstream in 2012 with a peak production level of 180,000 barrels of oil equivalent per day.

Some eight billion dollars (six billion euros) are expected to be spent on the project, said Maurice.

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