The Nation Newspaper

Category: Energy

  • House to probe meter scarcity, says lawmaker

    House to probe meter scarcity, says lawmaker

    The power distribution companies (DISCOs), the Ministry of Power, the Nigerian Electricity Regulatory Commission (NERC), and other stakeholders may appear before the House of Representatives Committee on power over the scarcity of prepaid metres, a member, Hon Abike Dabiri-Erewa, has said.

    Speaking during a tour of Momas Meter Manufacturing Company Limited (MOMCOL) in Mowe, Ogun State, Mrs Dabiri-Erewa said the probe was necessary to get to the root of the problem.

    She said the Committee would probe metres’ scarcity, low patronage suffered by indigenous manufacturers, and local content, adding that manufacturers have suffered despite the huge market.

    The lawmaker said: “We are going to invite all parties involved, be it DISCOs owners, NERC, Ministry of Power and all stakeholders to know why local manufacturers are not been patronised.

    “Nigerians deserve better electricity services and we are going to get to the root of the challenge in the sector. There is need for us to give deadline to all DISCOs on installation of pre-paid metre to all electricity customers, but we equally gathered that most new owners face the challenge of finance.”

    Mrs Dabiri-Erewa said the House would have given deadline to all DISCOs on installations of pre-paid metres, if not because of the financial challenges facing them.

    She urged investors in the power sector to step up efforts aimed at improving electricity generation, transmission and distribution in the country.

    She said DISCOs must ensure that customers are metered to prevent estimated billings, and other problems faced by the consumers.

    She urged power firms to improve electricity generation, distribution, and transmission in the country

    Mrs Abike-Dabiri said metres had become difficult to come by in many homes, advising the firms to make the product available in the country.

    ‘’We should learn how to believe and celebrate ourselves. We should be determined to develop. As a parliamentarian, I am going to discuss with my chairman on power on ways to enforce local content through patronage of local metre manufacturers,” she said.

    She said the House would ensure that local content is embedded in power sector, as done in the oil and gas sector.

    MOMCOL’s Chairman Mr Kola Balogun decried poor patronage of metres by companies and government agencies in the country.

    He said Nigeria does not need to import metres, given the potential available in the country.

    “Indigenous (metres) manufacturers do not get enough patronage from government ministries and that is why our economy is not growing. The story of poor patronage is still the same in metres manufacturing sub-sector where foreign firms are patronised by government agencies. I can confidently say that local manufacturers can meet our needs. Nigeria has reached a stage where she is not supposed to be importing metres. In our company alone, we have a production capacity of 500,000 to one million meters a month,’’ he said.

    Balogun said manufacturers are facing funding as they find it difficult to access credit facilities from banks. He said the Small and Medium Scale Entrepreneurs (SMEs) needed to be encouraged to produce metres’ spare parts to grow the economy.

  • Why vehicles should run on natural gas, by firm

    Green Gas limited (GGL), a joint venture company of the Nigerian Gas Company (NGC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), in partnership with Nipco Plc, has explained why cars should run on Compressed Natural Gas (CNG).

    In a statement, it said motorists, whose cars run on CNG, would save on fossil fuels, such as petrol and diesel.

    The benefit is premised on the current selling price of N97 per litre of petrol compared to the N55 per Standard Cubic Meter (SCM) of gas, equivalent of a litre of petrol being offered by GGL to vehicles running on CNG.

    CNG’s General Manager, Natural Gas, Anirudh Narula, while evaluating the growing benefits of CNG powered vehicles said vehicles running on CNG tend to move around at relatively cheaper rate in gas consumption than they could with petrol of equivalent litre content.

    While giving an illustration of a journey from Lagos-Benin City covering 320km, he said the cost of travel on petrol is N6, 208, while that of CNG is N2,933, creating a saving of N3,275.

    Motorists in Edo State and its environs have been enjoying the savings following the inauguration of CNG stations in the ancient town, aside from other ancillary gains of using compressed gas as vehicular fuel.

    He pointed out that GGL has inaugurated various CNG stations in Benin City and is expanding to highways and other cities to provide avenues through which interested motorist could convert their vehicles to use CNG and re-fuel.

    More CNG stations, he said, were being constructed in 10 different locations on the Benin-Warri Expressway, Benin-Abuja Expressway,wBenin-Lagos Expressway, and in Warri metropolis, all to make access to CNG better for existing and prospective motorists in the country.

    He said last year, over 3,000 automobile customers switched to CNG in Benin alone, stressing that they are already enjoying the benefits of having their vehicles run on natural gas as against the conventional liquid fuels.

  • Power plants: Bid winners to emerge this month

    The Bureau of Public Enterprises (BPE) will this month announce winners of the bids for the power plants built under the National Integrated Power Project (NIPP) by the Niger Delta Power Holding Company (NDPHC).

    The 10 medium power plants, which were built to add at least 5,000 megawatts (Mw) to the national grid, are Alaoji Power Station in Abia State; Calabar Power Station, Cross River State; Egbema Power Station, Imo State; Geregu Power Station in Kogi State; Ihovbor Power Station in Edo State; and Olorunsogo Power Station, Ogun State.

    Others are Omoku Power Station in Rivers State; Omotosho in Ondo State; Gbarian Power Station, Bayelsa State; and Ogorode Power Station, Delta State.

    Stakeholders have urged the Federal Government to evolve a comprehensive gas plan to improve power supply. The President Liquifield Petroleum Gas Association of Nigeria Mr Dayo Adesina said the government’s decision to build more gas pipelines, pressure stations, central processing facilities (CPFs) and stripping plants, among other infrastructure, would help in increasing power generation.

    Adesina said shortage of gas had weakened the ability of the power firms, to improve generation and distribution since taking over the assets of the defunct PHCN late last year.

    The 15 power generation companies (GENCOs) and distribution companies (DISCOs), he said, had battled gas shortage, advising the government not to allow the independent power plants to suffer similar problems when they are privatised in June, last year.

    He said a sustained investment was needed to drive the sector, adding that certain number of megawatts must be added to the grid yearly to achieve growth.

    He said: ‘’There must be a concerted and sustained investment in the sector in the next couple of years. We should be adding 5,000Mw to the grid yearly to meet the demand.

    The population size keeps increasing which means that the demand for energy would also increase. As the infrastructure gets better, more people would come to grips with their jobs especially the small and medium enterprises (SMEs). The manufacturers, artisans and others need electricity for growth.

    “If today, they say the power plants can generate 10,000Mw available, where is the gas to power it? The whole value chain needs to be looked at. If you are producing 5,000MW, how many kilometres of pipelines are coming? How is the gas going to get the targeted power stations? ‘’

    He urged the government to introduce third-party scheme to enable power firms acquire gas through a secondary arrangement, such as buying gas from the Nigeria Liquefied and Natural Gas (NLNG) for power sector development.

  • NERC, BPE to monitor DISCOs, GENCOS

    NERC, BPE to monitor DISCOs, GENCOS

    The Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprises (BPE) are contemplating an inter-agency committee to monitor the 15 power firms.

    BPE’s spokesman Joe Anichebe told The Nation that the committee would monitor the activities of the firms since they took over the Power Holding Company of Nigeria (PHCN) assets last year to ascertain whether they have complied with the post-privatisation and regulatory laws.

    He said the committee would look at whether the companies have achieved some of their objectives or not, and their ability to meet the goals enshrined in the reforms act.

    The modalities for assessing the operators, he said, would be provided by the Committee.

    Anichebe BPE and NERC perform different functions, hence the need for them to jointly monitor the firms’activities from their perspectives.

    He said: ‘’There would be an inter-governmental agency committee to work out modalities on how to monitor the activities of the newly approved players in the power sector. The committee would be saddled with the responsibility of providing accurate and objective observation of the events in the sector to foster growth.”

    Anichebe explained that while the BPE would look at the post-acquisition plans of the companies and the Share Purchase Agreement (SPA), the NERC would look at the technical and regulatory obligations the companies are expected to meet to achieve their goals of improving electricity supply.

    ‘’ Under the post-acquisition plans, the firms told us the things they want to do; they told us what they intend to achieve within a particular period of time. Through the exercise, we would find out whether the companies have accomplished some of their set goals or not.’’

    Also, the NERC’s Chairman, Sam Amadi said the commission would ensure that the firms comply with the best practices of corporate governance. Amadi, who gave the assurance in a telephone interview with The Nation, said no stone would be left unturned in making the companies operate in line with the established frameworks. He said there would be checks and balances, adding that the firms must obey the laid down rules to ensures success of the reforms.

    NERC, in line with the Electric Power Sector Reform Act (EPSRAct 2005) is expected to formulate and implement policies that would protect the interest of consumers. It will also set and review tarrifs, issue licensces to operators, and where possible promotes competition.

  • Fed Govt resumes oil search in Chad Basin

    Despite decades of fruitless search for oil in the Chad Basin, the Federal Government still strongly hopes to find oil there, writes Assistant Editor EMEKA UGWUANYI

    After a lull, the Federal Government has resumed the search for oil in the Chad Basin in Borno State, despite the security challenges there.

    Public Affairs Manager, National Petroleum Investment Management Services (NAPIMS), Dr. Kennie Obateru, who spoke on behalf of the Group General Manager, Mr Fidel Pepple, said “seismic acquistion activities” have resumed in the Basin.

    NAPIMS is a subsidiary of the Nigerian National Petroleum Corporation (NNPC), responsible for upstream investment.

    Obateru said the project was being handled by Integrated Data Services Limited (IDSL) a subsidiary of NNPC, in partnership with BGP, a subsidiary of the China National Petroleum Corporation. The project is part of a 12-phased 3D seismic data acquisition programme covering 3,550 Sq.Km of which Phase 5 covers 252 Sq.Km has just been concluded. Currently, Phase 6 of the programme covering 266 Sq.Km has begun.

    Obateru said: “From Phase 1 to date, a total of 1,437 Sq.Km of seismic data has been acquired. Of this, 1,096 Sq.Km of seismic data has been duly processed and is ready for interpretation. Preliminary seismic data interpretation has produced some leads that will be further investigated to establish drillable prospects.

    “The seismic acquisition activities were carried out with due regard to environmental protection and in accordance with international standards and best practices. In this regard, NNPC contracted the University of Maiduguri to undertake an Environmental Baseline Studies (EBS) and Environmental Impact Assessment (EIA) which will be a guide in the current and future exploration activities in the region.

    “As a responsible corporate citizen, NNPC has embarked on sustainable developmental projects for her host communities in the areas of infrastructure, health and education. NNPC has also undertaken projects such as provision of potable water through sinking of boreholes as well as refurbishing of classroom blocks in primary schools in the area.”

    The current exploration in the Basin started over three years ago and has covered five seismic acquisition phases. Obateru said: “Our current strategy is to continue Phase 6-12 to enable us complete acquisition & interpretation prior to further drilling activities in the area. Effort is also being intensified to complete interpretation of the acquired aeromagnetic surveys across the six inland basins as part of the aggressive exploration agenda for increasing our country’s reserve base, he said.”

    Despite decades of fruitless searches by the Halliburton and Schlumberger, NNPC remain hopeful of finding oil in commercial quantity in the Basin.

    Halliburton and Schlumberger have since given up in the search. According to records, the multinational oil firms could only find two gas wells, with insignificant volumes; hence the abandon search for oil.

    NNPC’s hopes were renewed by reports of the discovery of oil on the other side of Lake Chad in Cameroon, Chad and Niger.

    In 2011, the government approved the execution of a comprehensive hydrocarbon mapping of Nigeria to activate the efficient search for oil and gas in the inland sedimentary basins including Chad Basin. This led to hiring of a renowned geophysicist and consultant to the United Nations, Prof. Deborah Ajakaiye, to lead a team of Nigerian and foreign geologists, geophysicists to undertake the project.

    Ajakaiye, a former President of the American Association of Petroleum Geologists (Africa Region), had worked on similar prospects in Saudi Arabia, Chad, Sudan, Argentina and some other Latin America and African countries. Providing insight into the planned project, she noted that the exercise, which is programmed to include the aerial and ground survey of the country, was designed to pin-point areas of high potentials and identify most prospective oil and gas zone.

    “This project entails the comprehensive and systematic airborne geophysical surveys involving gravity, magnetic and electromagnetic surveys of the inland basins with state of the art equipment. It also involves detail integrated programme of geophysical, geological, petrological and geochemical studies,” Ajakaiye said.

    She also noted that any commercial discovery based on the outcome of the project would foster the attractiveness of the basins for huge investment by the international oil companies (IOCs) with the attendant massive economic benefit for the host communities and the entire country.

    Based on team work’s government has been budgeting money yearly for exploration in the basin.

    Vice President Namadi Sambo believes that from the results of ongoing activities in the basin, the government expected that commercial exploration of oil and gas would begin there this year. He said the Chad Basin project took $75 million in 2012 and $100 million in 2013.

    The Northern Nigeria Development Company (NNDC) and the African Finance Corporation (AFC) in 2008, signed a Memorandum of Understanding (MoU) to ensure continued oil exploration around the Benue Trough and the Chad Basin.

    The Nigerian Association of Petroleum Geologists ( NAPE) also believes that there may still be something in the basin, adding that countries that own other parts of the Chad Basin produce oil. “With new data, knowledge increases. I’m sure that there are people studying that basin and maybe with time, Nigeria would strike oil there. We have oil in the Agade Basin in Niger Republic and we have oil in Doba Boga Basin in Southern Chad, we believe oil may be found there someday,” the association said.

  • ‘Shell’s divestment plans make strategic sense’

    Deutsche Bank has said it makes ‘strategic sense’ for Shell to sell off assets in the United Kingdom (UK) and Nigeria, though its analysis doesn’t suggest they would be big money deals.

    According to Oil & Gas Wrap, the German bank said in a note to investors that the noise around potential divestments is building and it is becoming clearer which assets will go under the hammer.

    Deutsche Bank’s analyst, Lucas Herrmann said: “Quite aside from the need to raise cash, that Shell should be looking to scale back its position in often troublesome (Nigeria) and mature territories (UK) makes strategic sense.

    “Pushing into the assets available for sale, however, and what seems apparent is that the positions offered are relatively modest in value.”

    In the North Sea, according to Deutsche Bank, Shell is likely to be selling the Anasuria floating production storage and offloading (FPSO) unit and interests in the Nelson area and Sean gas field; together these assets yielded 19,000 barrels of oil equivalent per day last year.

    Meanwhile, in Nigeria, it says four licences are available for sale yielding around 26,000 barrels per day and would have a value of around $500 million.

    The analyst adds: “All told, our view is that come completion, the complexion of Shell’s forward portfolio will be marginally improved with the action itself of decided value to sentiment. Big money proceeds are not, however, likely to be forthcoming – from these divestments at least.”

     

  • NUEE begins members’ verification for severance benefits

    The National Union of Electricity Employees (NUEE), an umbrella body for all junior workers in the defunct Power Holding Company of Nigeria (PHCN), said a verification has begun to ascertain the identities of its members that who either dead or alive.

    Speaking to The Nation, its National President, Mansur Musa said the development became necessary in order to know workers who are genuine or fake and further fight for their entitlements.

    Musa said the exercise would enable the body to be in a good position to demand for the rights of its workers.

    He said the exercise would be accompanied with pressures to compel the government to pay all the outstanding benefits owed its members.

    The body, Musa said, has watched events in the sector closely, and has come to the conclusion that the government is not interested in paying all the workers in the sector. He said the claims by the government that it has paid all the workers their entitlements were not correct, adding that some workers have not received their packages.

    He said: “We are verifying the names of members that are either dead or alive to get a good picture of them. It is not going to take eternity to fight and win the battle because we have facts intact. If there is nothing on ground after the expiration of the deadline given the government to address the issue of paying the entitlements of all the workers, we would come together and mount serious pressure on the government to acquiesce to our demands.”

    Musa said the development was informed by the perceived non-responsive attitude of the government towards the workers. He said the exercise would help in blocking any loopholes the government is trying to capitalise on to deny workers their entitlements.

    According to him, the need to settle the severance entitlements ranging from pension component, gratuity, retirement, death benefits and other labour issues once and for all is imperative for the growth of the sector.

    NUEE Secretary, Joe Ajaero said the 10 per cent equity shareholdings for workers collectively agreed upon has been jettisoned, while salaries and wages of the employees have been unilaterally reduced.

    Chairman, Nigerian Electricity Regulatory Commission (NERC), Sam Amadi, had said the government has paid the workers, arguing that they therefore, do not have right to disrupt the privatisation process.

  • Twist in the kerosene subsidy tale

    Twist in the kerosene subsidy tale

    The Nigerian National Petroleum Corporation (NNPC) and the Central Bank of Nigeria (CBN) have been squabbling over non-remittance of revenue due to the government. Both sides are holding-on to their positions. The NNPC is faulting the CBN’s claim on the actual amount of unremitted fund. Assistant Editor, EMEKA UGWUANYI reports.

    Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi’s memo kicked off the storm.

    In the memo to the Senate Committee on Finance, he said from the CBN’s calculation, of the $67 billion crude oil lifted, only $47 billion has been remitted, leaving a $20billion balance.

    He said the cash legally and unconstitutionally withheld, diverted or spent by the Nigerian National Petroleum Corporation (NNPC) is in excess of $10.8 billion, an amount that was reportedly reached after reconciliation by the Ministry of Finance, the CBN and other revenue generating agencies.

    NNPC, according to him, said a major component of the $10.8 billion was spent on kerosene and petrol subsidy.

    Sanusi said he had evidence of a presidential directive stopping kerosene subsidy, claiming that kerosene subsidy is illegal and should be refunded to the Federation Account.

    He raised serious concerns about NNPC’s crude swap arrangement, adding that oil revenue which should accrue to the Federation Account from the Nigerian Petroleum Development Company (NPDC), the exploration and production subsidiary of NNPC, is being diverted to private companies, such as Atlantic Energy and Seven Energy, which resulted in non-remittance of $6 billion of gross crude revenue that should be remitted to the Federation Account by NPDC as part of the divested assets.

    At its sitting last week, the committee and other parties resolved to appoint independent forensic auditors to investigate transactions in the oil and gas sector. The auditors, the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala said, would examine the books of NNPC and NDPC to clarify the issues.

    Mrs. Okonjo-Iweala said the step would help to unravel the controversies surrounding the alleged unremitted $20 billion by the NNPC, adding that since the $10.8 billion had been accepted by all parties as the outstanding amount, an independent body would be appointed to investigate the financial transactions involving oil exports.

    She said since conflicting figures were being mentioned by the CBN and the NNPC, the only way to establish the truth is to set up an independent body to verify all the parties claims. Nigerians are awaiting the forensic auditors reports.

    Sanusi also alleged that the implementation of kerosene subsidy is a violation of the HHK deregulation order by the late President Umaru Yar’Adua. He said the presidential directive was sent to NNPC, adding that the average supply of kerosene vessel by NNPC was between four and six vessels per month where conversion factor of 1,136 equals to one metric ton. He added that NNPC rendered nil returns on kerosene subsidy from April 2012 to December 2013, besides delay in filing subsidy claims to Petroleum Products Pricing Regulatory Agency (PPPRA). The entire subsidy implementation is a farce, he noted.

    NNPC said Sanusi misrepresented facts in alleging that it violated the presidential directive.

    “The factual position is that the late president issued a directive on the deregulation of kerosene but the administrative procedure for the implementation was not concluded before his death,” NNPC claimed. It said:”As a matter of fact, the presidential directive contained conflicting provisions that required further clarification to warrant implementation. The NNPC attempted through several correspondences to seek clarifications on the conflicting clause in the directive without any positive response. It would appear that Sanusi ran into the same difficulty encountered by NNPC in interpreting the controversial presidential directive when he suppressed facts in his submission before the committee.

    “For the avoidance of doubt, the express letters of the controversial presidential directive is to the effect that commencing from July 2009, “Eliminate existing subsidy on the consumption of kerosene, taking into account that subsidy payments by the government, on kerosene do not reach the intended beneficiaries. Public announcement of this measure should be avoided.

    “The Petroleum Act empowers the Minister of Petroleum Resources to approve petroleum product prices – HHK inclusive and the statutory provision remains un-amended. Such approval must be through the means of a Gazette, the Minister of Petroleum Resources cannot change prices of Petroleum Products without a gazette. Meanwhile, the directive was that “public announcement of this measure should be avoided” in direct contravention of the provision of Section 6 of the Petroleum Act.

    “The directive on kerosene subsidy was never received in NNPC as posited by Sanusi. Rather the directive was communicated to the former Minister of Petroleum Resources Dr Rilwan Lukman who could not communicate the directive to NNPC arising from the challenge indicated in the earlier paragraph of this submission.”

    NNPC said the volume of HHK supply to the system within the period was five vessels contrary to an average of four to six vessels per month as alleged by Sanusi and the subsidy implication of kerosene signed by the PPPRA at the inter-agencies reconciliation from January 2012 to July 2013 is $3.511billion.

    The House of Representatives Committee on Petroleum Resources (Downstream) will begin public hearing on kerosene subsidy this week. There are allegations of fraud in the kerosene importation, allocation and distribution within the chain. The committee, industry stakeholders believe, will address the issues because the commodity doesn’t reach the public at the regulated N50 per litre but is purchased at between N100 and N150 per litre depending on the area.

    “In the case of NPDC, its Managing Director, Mr. Victor Briggs, said strategic alliance agreement (SAA) did not start today. He said the company’s offshore field Okono Okpoho is a service contract, which was went into with Agip around 1999. In that service contract, the partners comes in with their financing, because at that time we have not gone offshore before, and because they also operate that field with their own financing, they will recover their cost, we will share the profit. They would do that for a period of five years by, which time NPDC would have been able to build its capacity to operate.

    “But when we took over the operatorship of the new assets divested by Shell, funding was an issue. The practical thing to have done is, let’s do a service contract but NPDC didn’t opt for a service contract because that means a third party will operate the asset and provide the financing. But we have technical capacity, what we were looking for is financing. What was done was strictly financing and also at our desire request for experienced personnel, to be seconded to us. That option is also critical because at NPDC, we don’t recruit. If we need to act quickly, where we need people, we have to rely on NNPC to recruit and deploy and that will take a long time.”

  • ‘Nigeria requires 50,000mw to grow economy’

    Nigeria requires over 50,000 megawatts (MW) of electricity to be economically viable, the Chief Executive Officer, General Electric(GE) Nigeria, Lazarus Angbazo, has said.

    Angbazo, who spoke at a Power Investors Conference in Lagos, said the volume of electricity production in the United States and Britain is huge, hence their ability to develop economically.

    “Texas alone generates over 34,000 megawatts of electricity-nearly eight times than the whole of Nigeria. The city of New York with a population of eight million consumes about 40,000 mega watts, far higher than what Nigeria is currently generating, adding that there is hope of improved power supply, given the on-going privatisation in the sector.

    ‘’ As primitive as the present situation appears, nearly everyone can now see light at the end of the tunnel due to a combination of factors. Fundamentally, a well-thought out power sector reform is being implemented by the Nigerian government. Our confidence is buoyed by the fact that the right steps are being taken in the right direction.

    “As you are aware, the power sector is capital intensive and the financial and technical resources required to rescue Nigeria from dismal and unacceptable condition are clearly beyond the government’s capabilities. This is why we believe that government has done the right thing by implementing full-scale privatisation, ’’ he added.

    According to him, the greater dividends accruable from government’s reform efforts will exert overwhelming results in the overall economy by the time it is completed.

    ‘’ Just close your eyes for a second and imagine what would happen to the Nigerian economy if we are generating between 40,000 or 50,000 megawatts of power. Imagine the impacts on the Small and Medium Scale Enterprises (SMEs), job creation, per capital income, inflation, the cost of doing business and so on,” he noted.

    It will be recalled that the global infrastructure giant recently signed a financing agreement with Standard Bank, Africa’s leading financial institution in a partnership that seeks to provide affordable access in the continent.

    The partnership will target 10 priority countries such as Nigeria, Angola, Tanzania, South Africa and Ghana. Others are Kenya, Mozambique, Uganda, Ethiopia and South Sudan. Financing activity will centre on project finance, equipment finance, trade finance and advisory. The programme will be open to Independent Power Producers (IPPs) and non- recourse infrastructure projects, industrial and manufacturers, natural resource companies, food and agricultural processors and other burrowers.

  • KPMG chief warns on shale threats, poor investment in oil

    KPMG chief warns on shale threats, poor investment in oil

    Auditing giant KPMG has warned the Federal Government of the dangers of not investing in the upstream oil sector and the threat of shale oil to the country’s revenue drive.

    KPMG’s Global Chairman, Energy and Natural Resources Sector, Michael Soeting, told reporters in Lagos, that the government should be concerned with lack of investments in the oil and gas exploration and production, which is resulting in depletion in oil reserves and revenues.

    He said the United States (US), which used to be Nigeria’s biggest market, is becoming dependent in oil and gas and marketing. The US he said, would by the end of this decade be producing about six million barrels of oil per day, adding that one third of gas production in the US is related to shale.

    He said although, Nigeria has found alternative markets in Asia, noting that it may depend only in the short term because many countries including China, South Africa and Argentina have huge reserves of shale gas and oil. Other countries, he added, have discovered conventional oil and gas. The implication is that the multinational oil firms have choices to make in terms of where to invest their money.

    He said: “The Nigerian economy depends on crude oil export and there is need for the country to do it right. Non-passage of the Petroleum Industry Bill (PIB) has resulted into investment apathy in the sector. The International Oil Companies (IOCs) are uncertain about what the fiscal terms in the PIB would become after passage and they have refused to invest.

    “Unfortunately, more countries are becoming energy players across the world, creating alternative markets for the IOCs to channel their investment. After discussion on PIB was introduced about 10 years ago, countries such as Ghana, Mozambique Angola and others have discovered oil and already attracting investment from IOCs.”

    He also drew attention to the undue long contracting cycle in Nigeria, which he said, is three to five times what it takes in other countries.

    KPMG partner in Risk Consulting, Dimeji Salaudeen, who also is Head, Africa Oil and Gas sector, said between January 2011 and January 2012, crude oil exports to US reduced from 600,000 bpd to 150,000 barrels per day(bpd).

    “Assuming a barrel of crude oil was $100 throughout that period, it means Nigeria lost $45million per day due to shale gas discovery in the US,” he said.

    He argued that Nigeria has slipped from being the third to the sixth supplier of crude oil to US. “This means the US. is importing more from other suppliers than Nigeria. The implication of this in the long term is that the country may be faced with inability to finance its budget and build oil reserves in the future.