Gas discoveries in some African countries and the United Kingdom are diminishing Nigeria ’s status as a major exporter of the commodity and putting serious pressure on the nation’s revenue from gas, as the sector struggles to attract new investments.
Nigeria has earned an estimated $6 billion, from gas exports from its projects in the last six years, to rank it in the top 10 of major producers globally. But lack of new investments and new gas field development, have seen it gradually being over- taken by even lesser known gas producing countries.
Large deposits of gas reserves have been found in recent times in the United Kingdom , Tanzania , Ghana and Mozambique and off the coast of Kenya. Industry analysts say that by the time these gas reserves are developed, Nigeria might be faced with stiff competition, which would greatly affect the level of revenue expected from gas.
They danger posed by this development, is that operators in these countries are given enough incentives to develop gas, unlike Nigeria , where the price of gas has prevented gas utilization programs. Operators at the recent conference on gas utilisation, organised by the Nigeria Association of Petroleum Explorationist (NAPE) acknowledged that the greatest problem facing the gas sector, was the lack of a commercialization framework that should govern the operation of the sub- sector.
They said there were not enough incentives from the government, for investors to invest in gas development. According to Ebi Omotshola, the group managing director of Conoil, the price paid for gas currently, is the greatest disincentive to international and local operators. He said that the government should completely hands off from dictating the price of gas and allow it to be determined by market forces.
Jide Ojo, the General Manager, Exploration, Addax Petroleum Development Nigeria Limited, said a lull in exploration activities remained a huge threat to both the oil and gas markets. He said such would be a hindrance in the nation’s quest to move the gas commercialization agenda forward.
The managing director/chairman, Chevron, Andrew Fawthrop, observed that it was necessary to transit from just oil and gas based economy. This, he pointed out, was the enabler for exploration and commercialization.
Fawthrop, who was represented by Steve Freeman, the director, Gas, Chevron, pointed out that there was still a need to determine the price of the commodity. He also stressed the need for effective guarantee for payments on supplies of the commodity. According to him, to encourage operators to invest in the business and undertake effective exploration of gas, issues like policy, infrastructure, market, partnerships and security, must be addressed in the industry.