‘Emerging challenges may frustrate development of gas resources’

By Kingsley Jeremiah, Abuja

NNPC, Shell, others mull options as global gas price tumbles
NASS, others insist on inter-sectorial Nigerian content law

Although the Petroleum Industry Act (PIA) is expected to unlock gas potential in Nigeria, especially the

current 206 trillion standard cubic feet proven reserves, stakeholders yesterday said the goals might remain elusive.

Investment to unlock the series of the opportunities outlined by the country according to the stakeholders, may remain a daunting task amidst heavy levies on the sector, domestic gas pricing challenges as well as lack of necessary technology and skills set.

Coming as the price of natural gas yesterday, tumbled further to $4.4 per MMBtu after rising close to $7, the stakeholders at the 10th Practical Nigerian Content Forum stated that without the right environment, Nigeria may miss out of the window of opportunities available through the energy transition phase.

The Senate Chairman, Local Content, Teslim Folarin at the event also insisted that the cross-sectorial local bill in the National Assembly would make existing executive orders on patronage of Nigeria goods and services a law across sectors of the economy, stressing that it won’t however scrap the NOGIC Act.

With the current high price of cooking gas, the inadequacies of gas to power plants, the experts noted that data challenges, legal framework, lack of collaboration, weak research and development, lack of technology, imposition of taxes on the gas value chain lay heavy siege to the country’s aspirations in the gas revolution.

Group Executive Director, Gas and Power at the Nigerian National Petroleum Corporation Limited, Abdulkadir Ahmed, insisted that declining funding for fossil fuels would create challenges for existing gas resources in the country, stressing that the sector must devise a means to fund projects and also produce more with cost.

Ahmed was also concerned about the infrastructure that transports and ensures utilisation of gas, adding that a transparent and market-driven pricing remained sacrosanct.

“We can not make progress without a market-driven and transparent gas price. No one will put in money if they have no feasibility of how they will recover their cost. There won’t be any gas to process if we do not invest in upstream activities,” he said.

Managing Director, Shell Nigeria Gas, Ed Ubong stated that there was a need to build local capacity for gas and ensure that the resources are used to spur industrial development.

According to him, there was a need to support indigenous companies to thrive, adding that the gas space remained a key avenue to grow local content.

A Governing Council Member at Nigerian Content Development and Monitoring Board (NCDMB), Mina Oforiokuma said with progress being made by countries like Mozambique, Nigeria needs to learn and move fast to address bottlenecks.

Speaking on the expansion of local content across sectors, Executive Secretary of NCDMB, Simbi Wabote noted that the government may consider a local content department across ministries to develop.

Wabote said: “That’s the only way you can get benefit out of the implementation because what people forget is that NCDMB is like a department within the ministry of petroleum resources saddled with the responsibility of driving local content within the oil and gas industry and controlled by the Ministry in the same way.”

Senator Folarin noted that the government remained concerned about the development of indigenous companies, adding that the move would address inefficiencies, in the long run reduce cost of projects and build strong local companies that can compete globally.

He revealed that some of the key sectors that would be primarily targeted are power, ICT, manufacturing, agriculture and others.