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Tag: gas sector

  • Nigerian gas sector attracts new N400b deal

    Nigerian gas sector attracts new N400b deal

    • Fed Govt hails Temile’s $450m investments 

    The Nigerian gas sector yesteday received a significant investment boost with the signing of a new construction contract worth N400 billion.

    At a contract signing ceremony yesterday in London, United Kingdom,  Temile Development Company Ltd  signed a contract with Hyundai Heavy Industries for the construction of an 88,000 cubic meter Very Large Gas Carrier (VLGC).

    The contract, alongside a deal for the construction supervision contract with the NLNG Shipping & Marine Limited (NSML), ws valued at over $250 million, about N400 billion.

    Yesterday’s deal brought TDC’s total investments in the gas sector to over $450 million within the past four years.

    Minister of State for Petroleum Resources, Gas, Ekperikpe Ekpo, at the ceremony, described the deal as a significant milestone in the collective journey towards realizing Nigeria’s “Decade of Gas” vision.

    Launched in 2021, the Decade of Gas initiative is a strategic effort by the federal government to harness the country’s abundant natural gas resources for economic development and energy transition.

    The initiative aims to transform Nigeria into a gas-powered economy by 2030 through a series of policy reforms, infrastructure development, and investment attraction strategies.

    Ekpo commended TDC for its substantial investment in the gas sector, noting that such investment reinforces local participation in the sector critical to Nigeria’s national economic diversification agenda.

    He reaffirmed the Federal Government’s commitment to providing necessary incentives and enablers to catalyze the economy.

    Said he: “This project will bring Temile’s total investment to date in the gas value chain to over $450m in the last four years. This is a significant and strategic financial commitment, reinforcing local participation in a sector critical to our national economic diversification agenda.

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    “Today, we celebrate not just an investment in infrastructure, but a bold expression of belief in Nigeria’s gas potential and in the capability of indigenous companies to lead transformational change in our energy landscape.”

    According to him, the investment would contribute to Nigeria’s economic development, poverty eradication, and wealth creation.

    He added that the investment would also deepen domestic capacity and position Nigeria as a key player in the global energy transition, which are core objective of President Tinubu’s Renewed Hope Agenda.

    Ekpo tasked other operators and critical stakeholders in the Nigerian oil and gas sector to recommit themselves to the principles of collaboration, innovation, and local content development.

    Chief Executive Officer, TDC Limited, Mr. Alfred Temile, said the deal reaffirmed the company’s role as a strategic stakeholder in Nigeria’s gas value chain development.

     “TDC remains highly committed to continuing to drive critical investments in partnership with key sector stakeholders in furtherance of Nigeria’s Decade of Gas initiatives,” Temile said.

    He commended Ekpo and all stakeholders who worked assiduously to make the deal a success.

  • ‘Govt desirous of improved increase in oil, gas sector investment’

    ‘Govt desirous of improved increase in oil, gas sector investment’

    Minister of State for Petroleum Resources, Senator Heineken Lokpobiri, has expressed the desire of the Federal Government to increase investment in the oil and gas sector of the economy. He made this known while on a working visit of the TotalEnergies’ offshore fields of Ofon and Egina, recently.

    Minister, who noted that the government is not unmindful of the problems of the IOCs, also made it known that the government is interested in festering conducive investment climate for investors.

     “The Federal Government is very desirous to increase investment in the oil and gas sector to boost its production level. So, I must commend TotalEnergies for being a shining example of what the Federal Government expects from international oil companies (IOCs). So let us work together and see how we can improve the sector and continue to do what we can to support your company for our mutual benefit. We are not trying to give problems to anybody, it’s going to be a win-win approach because government is not unreasonable to people’s problems”, Lokpobiri said.

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    The visit was intended to intimate the minister with TotalEnergies’ investment plans, ongoing projects and challenges faced by the company in the areas of capex and community relations.

    The Managing Director, TotalEnergies, Matthieu Bouyer, said pledged the readiness of the firm to partner with the Federal Government in achieving its objectives of boosting production levels through the implementation of the various new projects lined up by the company.

    He stated that these projects which are tied-back to existing fields will not only increase production but also bring more revenue to the Federal Government.

  • Oil, gas sector contributes less than 10% to GDP

    Oil, gas sector contributes less than 10% to GDP

    The oil and gas sector has contributed less than 10 per cent to the Gross Domestic Product (GDP), Executive Commissioner, Corporate Service Administration, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Ofoegbu kelechi, has said.

    He stated this during the Panel session of the ongoing Nigeria Oil and Gas Week, with the theme “Showcasing Opportunities, Driving Investment, Meeting Energy Demand” and sub theme “Nigerian Content as an Enabler,” in Abuja.   

    Kelechi said for the Nigerian content to be truly an enabler should be seen not as the destination but a journey. According to him, that journey would only be fully appreciated and crystallised when it has impact on the lives and the economy of the country in which we function.

    “As an organisation, as a regulatory body, we understand that Nigerian content is all about value creation and importantly, value retention. As a regulator, the board has approached this focusing on building capacity, so we interpret our role as, on the macro level, we award licenses, leases, permits to those who seek to participate in the upstream sector.

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    “So acreage management and all of that, blocks, and most recently, as to what the Nigerian gas commercialisation program and we’ve awarded flare sites as well. But this is not how we interpret our role as just awarding and then stepping back. But we’re taking, we’re hand-holding awardees, by providing opportunity for them to access funding, to access technology, and to strengthen their governance because that’s the veritable way of ensuring that they get the funding that then helps them to develop the acreage or whatever transaction that they are seized on the responsibility of performing within the sector,” Kelechi stated.

    According to Kelechi, the board doesn’t hand over licenses anymore and walk away adding that under the former Department of Petroleum Resources (DPR) arrangement, before NUPRC was birthed by the Petroleum Industry Act (PIA); it was just like a license awarding institution.

    He said the board now sees itself as business enablers because it has been been mandated by Section 6 of Section H of the PIA to promote an enabling environment for investment in upstream petroleum operations, adding Nigerian content for us is a very strong pillar in that enablement process.

    He said the board enables by building capacity, by technology adoption, but importantly, it’s looking at the end game. “So unless we find that needle, that pendulum swinging towards higher numbers, we can’t really rest on our oars and think that we have succeeded as an industry, whether it’s Nigerian content, whether it’s any other sector,” he added.

    While we are celebrating the achievements, let’s understand that we focus on the destination and the destination is when it truly impacts on the lives of the Nigerian people, Kelechi added.

  • Gas: Nigeria  woos Canadian businesses, investors to Nigeria’s gas sector

    Gas: Nigeria  woos Canadian businesses, investors to Nigeria’s gas sector

    The Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, yesterday said the path to a sustainable energy future requires partnership, innovation, and a shared commitment to addressing global energy challenges.

    Speaking at a welcome reception hosted by the Nigerian High Commission in Alberta, Calgary, Canada, where he is attending the ongoing Global Energy Show, Ekpo described the Global Energy Show as a platform where the brightest minds and most influential leaders in the energy sector converge, saying the gathering offered an opportunity to showcase Nigeria’s immense potential in the global energy landscape, particularly in the gas sector.

    “We welcome Canadian businesses and investors to explore Nigeria’s vast opportunities. Our government is dedicated to ensuring a stable and conducive environment for investments, with a focus on transparency, efficiency, and mutual benefit,” Ekpo said.

     He emphasised that Nigeria is blessed with one of the largest natural gas reserves in the world, and is committed to harnessing this resource not only as a catalyst for economic growth, but also as a vital component of its energy transition strategy.

    According to Ekpo, in the past few years, the Nigerian government has made substantial strides in creating an enabling environment for investment in the gas sector.

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    He said initiatives such as the Decade of Gas had been launched to transform Nigeria into a gas-powered economy by 2030.

    The Minister further noted that the Petroleum Industry Act (PIA) 2021 established the Midstream and Downstream Gas Infrastructure Fund (MDGIF), which provides a strategic framework to remove bottlenecks, incentivize investments and foster a conducive environment for gas infrastructure development.

    Ekpo therefore urged private sector investors to see Nigeria as a destination of their choice, highlighting their importance in the journey towards the country’s energy security and sustainability.

    “Let us foster deeper connections, share knowledge, and pave the way for a future where our energy collaboration leads to mutual prosperity and a sustainable world,” he added.

  • ‘Skills development’ll drive local content in oil, gas sector’

    Investing in training facilities, Research and Development (R&D) will help enhance the capacity of indigenous operators in the oil and gas industry thereby deepening the local content initiative, the Executive Director, Lagos Deep Offshore Logistics Base (LADOL), Mr Jide Jadesimi, has said.

    He said there was the need to enhance the capacities of local businesses and operators in the nation’s oil and gas industry in order to execute major projects in the extractive industry.

    Jadesimi spoke to The Nation ahead of the “3rd Africa local Content & Sustainability Summit” scheduled to hold in Ghana in October. He said increasing local content by expanding the opportunities for indigenous enterprises and communities to participate in the extractive industry’s value chain required up-skilling national workforces to increase their competitiveness.

    The LADOL director said this could be done through partnerships, joint ventures and/or other alliances between local businesses and mining companies to enable indigenous companies broaden their knowledge of the extractive industry and promote technology and skills transfer.

    He added that a multi-sectoral approach was critical to skills development so that competencies gained can be transferred to other economic sectors.

    According to him, such approach will also help indigenous businesses access market information on opportunities in the extractive sector and build their capacity over time to effectively participate in and link with mining, oil and gas companies.

    Jadesimi stated that without the necessary capacities, indigenous oil and gas firms will continue to miss out on available opportunities.

    “Substantial benefits can be realised from close collaborations with companies, hence the importance of facilitating alliances between local and foreign businesses,” he said.

    The LADOL boss added that the participation of the private sector and civil society will also be critical to raising community awareness and building the capacity of local enterprises to take advantage of emerging opportunities in the industry.

    He further stated that investing in skills development through training is not just about driving local content, but doing business sustainably, profitably and responsibly. “It can lower supply chain costs by creating jobs and prosperity for local communities and using local suppliers, goods and services,” he added.

    While insisting that local content matters a great deal, Jadesimi said businesses must comply with a country’s local content laws to be able to operate.Secondly, investing in skills, sourcing locally and building capacity in the short-term, he said, means businesses can operate more efficiently and profitably in the long-term.

    He also said companies will strengthen their brand and protect their long-term licence to operate by contributing to the development of the host country. Jadesimi said for local content to be sustainable, a long-term, end-to-end localisation approach must be followed from exploration through to decommissioning phases in the typical oil and gas lifecycle.

    “To become more competitive to international mining firms, governments must seek to create a more investor-friendly business environment. But these actions should not override the reasonable consideration of retaining as large a proportion of resource wealth as possible in-country,” he said.

  • Entrepreneur seeks empowerment in Niger Delta

    An entrepreneur in the oil and gas sector, Mr Keniebi Okoko, has urged the government to empower the Niger Delta people.

    He identified poor mental disposition of many people in a state like Bayelsa as the cause of poverty in the midst of plenty.

    Okoko, who spoke in Yenagoa, said poverty of the mind is worse than material poverty.

    He said it was ironical that while the state is endowed with abundant natural resources, the people have not been exposed to the right kind of education to develop their mental abilities.

    “Well, I believe that Bayelsa as a whole needs to focus on education. Mental poverty is worse than financial poverty. If a mind is not developed and equipped, a man cannot give what he does not have.

    “Our people are not completely exposed to good education systems. Our people are not well travelled like other tribes, if you look at our rich natural endowments, you wonder why we cannot harness and turn them to wealth.

    “If you look at Singapore, it is an Island with no oil deposit, but it has oil refineries. Our state, Bayelsa, is larger than Singapore and we have so much oil and gas deposits and other minerals, yet development seems to have eluded us because we lack the right mentality, we need to think right.

    “The Ijaw man is determined to succeed. If you give the Ijaw man the right playing ground, he will perform, I can assure you. So, I believe that what we should do as a people is to focus on education,” Okoko said.

    He, however, said the emphasis on education should not be restricted to classroom education, but should include skill acquisition for the less privileged, who might not be able to afford university education.

    “Creating skill acquisitions with the right personnel to man them, gives you the opportunity to train the less privileged on the skills that can develop them,” he said.

    He commended the Seriake Dickson-led government in Bayelsa for the investment it has made in the education sector and called for more of such efforts in the sector.

    “I think the governor has given it a good try. I think that the intentions are good. I believe that he has genuine intentions for the job, and I believe he has tried his best.

    “My duty as a leader is to try and add to what he has done; to build in any way we can help the government to improve where they have stopped in any capacity we find ourselves with good suggestions,” Okoko said.

     

     

  • Oil, gas sector generated $17.05b in 2016—NEITI

    Nigeria generated $17.05 billion from the oil and gas sector in 2016 representing a 31 per cent decline on the $24.79 billion generated in 2015,according to the latest report of the Nigeria Extractive Industries Transparency Initiative (NEITI).

    The sector fetched  $68.44 billion for the country in 2011.

    The report says the 2016 earnings are Nigeria’s lowest in 10 years and the fifth lowest in the 18 years covered by NEITI’s audit reports so far (1999 to 2016).   It attributed the decline in earnings to  the double whammy of low oil prices in the global market and reduced oil production in Nigeria, which in turn was caused by disruption and vandalism of oil assets and spike in crude theft, among others.

    NEITI  Director of  Communications,  Dr. Orji Ogbonnaya Orji, put Nigeria’s annual average price of crude oil per barrel at $43.73 in 2016 as against $52.5 in 2015.

    Total oil production in 2016 was 659 million barrels as against 776 million barrels produced in 2015, a fall of 15%. Losses due to crude oil theft and sabotage rose from 27 million barrels in 2015 to 101 million barrels in 2016, an increase of 274%.

    This was aside losses due to deferment, which in 2016 was put at 144 million barrels which also went up by 65% when compared to the 87.5 million barrels in 2015.

    He said:”The bombing of the under-water 48-inch Forcados Oil Loading/Export Pipeline was one of many major occurrences that befell the industry in the year under review.

    “This incident occurred in February 2016 and the line remained in-operational for seven months. Shell Petroleum Development Company (SPDC) declared force majeure on lifting from Forcados on 21st February 2016. Companies injecting into the Forcados Terminal such as Seplat, Panocean, Midwestern, Energia, Platform, Pillar, Waltersmith and EXCEL shut down production for over 147 days.”

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    In addition, SPDC declared force majeure on the Bonny Terminal owning  to a leak in Nembe Creek Pipeline between May and July 2016 while NAOC declared force majeure on the Brass Terminal between July and August 2016.

    Similarly, Mobil Producing Nigeria Unlimited declared force majeure twice between May/June and July/October 2016. This was due to a drilling process disruption and damage to the QIT loading system.

    The NEITI report stated that:  “MPN’s total production within the four-month period was 4,616,825bbls, which is less than half of what was produced in each month previously as reflected in DPR reconciled sign-off records.”

    After surviving the slump in the global oil market in 2008 and 2009, Nigeria’s oil sector rebounded in 2010 with a 49% increase in total financial flows to $44.94 billion, followed by the peak of $68.44 billion in 2011.

    However, flows from the sector have been trending downward since that peak year with $62.94 billion generated in 2012, $58.08 billion in 2013, $54.56 billion in 2014, and $24.79 billion in 2015. Similarly, oil production has been on steady decline with 866 million barrels produced in 2012, 800 million barrels in 2013, 798 million barrels in 2014, 776 million barrels in 2015 and 659 million barrels in 2016.

    NEITI’s audit reports independently reconcile payments by companies against receipts by government agencies, and cover key financial flows such as earnings from sale of federation’s crude oil and gas, sector-specific taxes, fees and levies such as royalty, Petroleum Profit Tax (PPT), signature bonus, gas flared penalty, and other flows such as NDDC contribution, NCDMB levy, NESS fees, education tax and others. Breakdown of the payment shows that the major earnings for 2016 came from export and domestic sale of Federation crude oil and gas with $7.97 billion, PPT with $4.21 billion, and royalty oil with $1.57 billion.

    A major highlight of 2016 is  that for the first time in Nigeria’s history, crude oil produced from Production Sharing Contracts (PSCs) overtook output from the Joint Ventures (JVs).

    In 2016, PSCs accounted for 324 million barrels, while the JVs accounted for 289.1 million barrels, (as against the 320 million barrels for PSCs and 375.5 million barrels for JVs in 2015).

  • NEITI seeks more reforms in oil, gas sector

    The Nigeria Extractive Industries Transparency Initiative (NEITI) has appealed to the National Assembly to use its audit reports to push for more reforms in the oil and gas industry.

    Its Executive Secretary (ES), Waziri Adio, made the appeal in Abuja while receiving members of the House of Representatives’ Committee on Petroleum Upstream who were on oversight visit to NEITI secretariat.

    In a statement, Adio explained that NEITI reports contain information and data on company payments and government receipts as well as the lapses and remedial actions required in the industry.

    He said: “We see the parliament as important partners not just because we are answerable to you and we need you to approve our budget but because our reports can and should be inputs to your important work.”

    Adio expressed concern that several reports with far-reaching recommendations had been placed in the public domain with challenges of implementation. He, therefore, urged the National Assembly to study the reports as important documents, adding it will aid their oversight representative and law-making responsibilities.

    In the report, the ES told the lawmakers that NEITI’s decision to develop a new strategic plan to cover  2017 to 2021 was to deepen openness and shape positively the governance of the sector through policy engagement, thought leadership and inter agency collaboration.

    He identified funding, manual data collection and human capacity development as major challenges.

    He praised the National Assembly for the passage of the Petroleum Industry Governance Bill (PIGB), noting the development is in support of the mandate of NEITI to strengthen reforms in the industry and key to promoting investments and better revenue generation.

     

     

     

     

  • ‘Why gas sector’s growth remains stunted’

    ‘Why gas sector’s growth remains stunted’

    Poor operating environment, ill funding and refusal of investors to invest due to lack of incentives have been identified as factors militating against the development of the gas sector.
    Chairman, Society of Petroleum Engineers (SPE) Nigeria Council, Dr Saka Matemilola, said other problems were the failure of the government to settle the cash call debts owed the International Oil Companies (IOCs) operating Joint Venture (JV) with the Nigerian National PetroleumCorporation (NNPC), among meeting other fiscal obligations and decaying infrastructure.
    Speaking in Lagos, Matemilola urged the Federal Government to proffer solution to the problems, adding that it should put in place structures that would allow private investors to come in
    He said funding was the bane of the industry and that the sector needs huge funds to grow.
    He said the Federal Government alone could not provide the funds to revive the sector, in view of its weak financial position caused by the recession and other macro-economic issues.
    He said a lot of gas is trapped offshore because there were no facilities to evacuate it, adding that such problem would not arise where the sector has enough funds.
    Matemilola said: ‘’It is obvious that the Federal Government is grappling with fiscal problems. This means that it lacks the capacity to finance the gas sector. By implication, Nigeria must usher in private investors, who would invest in the industry. Investors who are willing to invest in the sector, not investors that would be forced to invest, must be incentivised to get the needed support from them.’’
    He urged the government to come up with incentives that would encourage investors, adding that the industry is not mature, when compared to its European counterparts.

  • NNPC seeks $51b investment in gas sector, says GMD

    NNPC seeks $51b investment in gas sector, says GMD

    There is a $51 billion investment available in Nigeria’s Gas sector, Group Managing Director of Nigeria Nation Petroleum Corporation (NNPC), Dr Maikanti Baru, said yesterday.

    Also, Minister of State for Petroleum Dr Ibe Kachikwu, said the Federal Government would give more attention to the development of gas as a major revenue earner.

    The officials spoke in Abuja at the 10th Nigerian Gas Association International Conference. They said that the country was determined to reverse its over-dependence on oil as benchmark for the economy.

    The theme of the conference is “Nigerian Gas Roadmap and Its Potential for Regional and Global Influence: Its Implementation, Challenges, Opportunities and New Way Forward”.

    The minister said: “I must say that over the years there has been a blatant neglect of this sector. We really haven’t focused on gas; all had been on oil production.

    “With regard to the recession today, it is clear to us that if we develop a two window of economic earnings, a lot of emphasis will move to gas.

    “We are going to be introducing new technical resources, restructuring existing departments and assigning new managers to the existing departments. These reforms are clearly articulated in the proposed national gas policy.”

    He said that the draft on Gas Policy would be released later and that the policy would promote a competitive business environment for both current and new investors.

    Kachikwu said the government’s vision was to make Nigeria an attractive gas-based industrial nation, give primary attention to meeting local gas demands and develop significant presence in the international market.

    He said the government’s priority was utilisation of natural gas for domestic needs with the power sector as key priority end-user.

    The government processing a draft legislation on reforms in the petroleum industry.

    “The new fiscal policy we are working on will make gas a stand-alone, separate from oil and not consolidated on oil taxation.

    “Our intention is to retain the current pricing framework for a limited period. It will end when sufficient gas volumes are built up to a level that will underpin a competitive gas market.

    “Under such condition, wholesale gas price will be market-led,” Kachikwu said.

    He said that gas flaring was still a prevalent practice in the petroleum industry, adding however, that government was clear protection of the environment was a more important objective than oil and gas production.

    “Government is determined to see flare out in the earliest shortest time. We are seeking to exit gas flaring by 2020, 10 years before the 2030 deadline the UN gave.

    “To achieve this, a number of measures will be introduced; gas utilisation will be a priority consideration over every other consideration for handling of associated gas.

    “We will be increasing the gas flaring penalties to an appropriate level sufficient to de-incentivise the practice of gas flaring.

    “Our focus really will not be on penalisation; we will seek quite frankly to simply stop it and not you throwing money at us,” the minister said.

    Baru said that there were huge investment opportunities in the sector.

    According to Baru, there is a 51billion dollar-investment opportunities existing in gas processing and transmission and general infrastructure development.

    He said that 35.4 billion dollars existed in the power plants, gas exploration and production, fertilizer plants, virtual pipeline and flare gas commercialisation.

    Baru also said that 16 billion dollars existed in gas transmission pipelines, port infrastructure, real estate development, central processing facilities, pipe milling and fabrication yards and FTZ infrastructure development and concessioning.

    He said that the proposed Gas Policy defined the boundaries between Upstream, Midstream and Downstream, processing facilities, pipelines, pricing, host communities engagement and conducive environment, among others.

    He also said that there was a pragmatic road map to grow power generation capacity by at least, three folds within the next four years.

    “The gas supply has been highlighted as the weak link in the development of the power sector.

    “While we would not debate how we got here, we will rise up to the challenge of ensuring that gas is made readily available for the development of the electricity supply industry.

    “It is clear that with a focused development, domestic gas can be harnessed to fuel the entire power demands of the country and beyond,’’ Baru said.

    He added that the regulators and other government agencies, including Bulk Trader and Ministries of Finance, Power and Petroleum, would synergise on the imperatives of the sector “so that we begin to solve the problem”