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Tag: Gas

  • What new found for oil and gas stocks?

    What new found for oil and gas stocks?

    Oil and gas stocks are the fastest-rising and most profitable stocks at the stock market. With the oil and gas sectoral return nearly a triple of average return at the stock market, oil and gas stocks have found new momentum in the latest scrambling for Oando. Capital Market Editor, Taofik Salako, reports that a mix of new and prospective businesses and improving fundamentals is the impetus driving the rush for oil

    Oil and gas stocks were the major toasts of investors last year. From the previous scrambles for Forte Oil and Conoil to subsisting rush for Oando, oil and gas stocks had ridden on the back of significant buy-side pressures to build substantial gains for shareholders in 2013. Several oil and gas stocks closed the year with substantial points ahead of the average return at the stock market. The All Share Index (ASI), the common value-based index that tracks prices of all quoted equities on the Nigerian Stock Exchange (NSE), closed 2013 full-year average return of 47.19 per cent. With inflation rate at 7.9 per cent and Monetary Policy Rate (MPR) at 12 per cent, the average return underlines the attractiveness of the equity market. On the average, equities have sustained as the best-return asset class in recent years. While the weight of each sector, determined by the capitalisation of the stocks in the sector, plays important role in the overall market situation, return analysis underscored the positive influence of the oil and gas stocks on the overall market situation. NSE Oil and Gas Index recorded the largest return by any tracked sector on the NSE with a year-to-date return of 112.79 per cent for the week ended December 27, 2013. NSE Industrial Goods Index followed with a return of 78.20 per cent. All other indices were below the average. The NSE 30 Index placed third with 38.35 per cent while the NSE Insurance Index, NSE Banking Index and NSE Consumer Goods Index recorded 26.50 per cent, 24.29 per cent and 29.51 per cent.

    For investors in oil and gas stocks generally, 2013 was a year to remember for good. Full-year return analysis showed that most oil majors closed with exciting returns, far ahead of the market. Forte Oil led the entire stock market with a full-year return of 1,164.55 per cent. Conoil ranked within the top-10 stocks, in terms of returns, with a return of 231.37 per cent. MRS more than doubled the average return with 129.12 per cent. Oando turned around from negative return in October to close the year with 96.36 per cent. Eterna more than doubled the average with a return of 126.per cent. Total Nigeria Plc carried a return of 41 per cent while Mobil Oil Nigeria recorded a return of 8.56 per cent, the worst performance among the majors.

     

    The rush for oil and gas

    There appears to be no let down in the bullish rally yet. As investors ponder on the outlook for the market, oil and gas stocks appear to be decisive in the market dynamics. The bullish momentum at the stock market last week was driven, to some extent, by gains in the oil and gas sector. Average return in the oil and gas sector more than doubled the size of overall market’s return. As against the weekly average return of 3.03 per cent by the NSE’s ASI, the NSE Oil and Gas Index rallied 6.84 per cent within four days to consolidate its position as the best-performing sector. NSE built its NSE Oil and Gas Index on the price movements of the five major oil and gas companies, including Total Nigeria Plc, Mobil Oil Nigeria Plc, MRS Oil and Gas, Conoil and Oando Plc. The NSE Insurance Index, which serves as barometer for the insurance sector, recorded a gain of 6.51 per cent.

    Also, the NSE 30 Index-which tracks the 30 most capitalised stocks on the NSE, recorded a return of 3.39 per cent. The NSE Consumer Goods Index also recorded a modest weekly return of 0.40 per cent. The NSE Banking Index posted the highest weekly sectoral gain with 7.14 per cent while the NSE Industrial Goods Index rallied 2.11 per cent.

    Sprint start analysis for the first two days of 2014 showed that oil and gas stocks started with stronger momentum than other tracked sectors, with the exception of the insurance sector. ASI alternated between negative start and a recovery to close the first two trading days of 2014 with a commendable year-to-date return of 0.29 per cent. The NSE Insurance Index recorded a two-day gain of 4.44 per cent. The NSE 30 Index was below average at 0.21 per cent. The NSE Consumer Goods Index recorded a return of 0.84 per cent. The NSE Banking Index posted two-day gain of 0.98 per cent while the NSE Industrial Goods Index was on the average at 0.29 per cent. The NSE Oil and Gas Index rallied a two-day gain of 2.29 per cent.

    Oando has been catalytic to the oil and gas stocks’ rally and overall market trend. The only oil and gas stock on the top-10 gainers’ list in the past two weeks, Oando led the market two weeks ago with a weekly gain of 21.62 per cent. It consolidated this last week with a gain of 33.50 per cent, the third highest gain in the overall market and the highest by any large-cap stock. Neimeth International Pharmaceuticals and UBA Capital had placed first and second with 37.14 per cent and 33.72 per cent.

     

    Earnings effect

    As the companies prepare their full-year audited reports, investors appear to be focused on earnings yield- a forward-looking indicator that relates fundamental earnings to share price. While the year-to-date return and latest operational fundamentals illustrate the historic returns by a stock, earnings yield underlines the potential return and intrinsic value in a stock. Earnings yield is calculated by finding the percentage of current net earnings per share of a stock to the current share price at the stock market, to determine the probable underlying yield for the stock. Besides its importance as a measure of intrinsic returns, earnings yield also denotes probable cash dividend range given its unique feature as a ratio of basic earnings per share. Earnings per share represents net profit earned by every outstanding share of a company within a period. The board, subject to approval of the shareholders at a general meeting, will then decide on the amount of dividend to be paid from the earnings per share. For companies with long-established dividend payment policy, probable dividend could be deduced on the basis of current earnings per share.

    Already, third quarter reports in the sector indicated improved performance. Conoil had shown the strongest improvement in profitability. Nine-month report of Conoil for the period ended September 30, 2013 showed that pre and post tax profits rose by 341 per cent and 329 per cent. While sales growth was modest at 6.0 per cent, the company had leveraged on increasingly efficient cost management and financing structure. Turnover rose to N121.80 billion in 2013 as against N114.77 billion in comparable period of 2012. Profit before tax jumped from N699.42 million to N3.08 billion while profit after tax leapt to N2.09 billion as against N487.22 million recorded in corresponding period of 2012. With these, earnings per share stood at N3.01 by September 2013 as against 70 kobo by September 2012.

    There is a strong expectation that Conoil will consolidate its performance during the fourth quarter. According to the directors of the oil-marketing company, full year profit could rise to about N4 billion by the end of this year. On the basis of this management guidance, earnings per share could rise to N5.76 by the year ended December 31, 2013.

    Also, interim report and accounts of Forte Oil for the nine-month period ended September 30, 2013 showed that net profit after tax quadrupled by 317 per cent from N656.4 million to N2.74 billion. This indicated earnings per share of N2.54 in the first nine months of this year compared with 61 kobo recorded in comparable period of 2012. Profit before tax had increased by 258.4 per cent from N898.3 million to N3.22 billion. Turnover rose by 28.97 per cent to N92.13 billion in 2013 as against N71.43 billion in 2012.

    Mobil Oil also showed appreciable improvement in profitability as net profit rose by 53 per cent. Nine-month report indicated marginal decline of 4.0 per cent in sales from N61.31 billion to N58.74 billion. However, profit before tax rose by 53 per cent to N3.77 billion by the third quarter ended September 30, 2013 compared with N2.46 billion in comparable period of 2012. After taxes, net profit rose by similar margin from N1.66 billion to N2.55 billion. Earnings per share thus improved from N4.61 to N7.07.

    However, third quarter report for Total Nigeria indicated total sales of N174.33 billion in 2013 as against N166.39 billion in comparable period of 2012. Profit before tax however dropped from N5.67 billion to N5.15 billion while profit after tax declined by 12 per cent from N3.72 billion to N3.26 billion. On per share basis, net basic earnings per share dropped to N9.60 by September 2013 compared with N10.96 recorded in comparable period of 2012. Total Nigeria has already declared an interim dividend of N2 per share on the basis of the third quarter report. Oando recorded total sales of N386.25 billion by September 2013 as against N487.77 billion in comparable period of 2012. Profit before tax also dropped from N17.41 billion to N9.76 billion while profit after tax stood at N6.09 billion as against N9.27 billion in corresponding period of 2012. For Oando and Total Nigeria, the focus appears more on the prospective yields in the medium terms, given their recent investments.

    Oando’s sustained rally is driven by increasing market confidence that the Nigeria’s largest energy group will be able to complete its ongoing $1.6 billion acquisition of ConocoPhillips’ Nigerian assets. Two weeks ago, Oando successfully raised N30.7 billion new capital through a special private placement. Oando had offered 2.5 billion ordinary shares of 50 Kobo each at N15 per share in a special placement. The offer recorded full subscription. With the investors’ funds in the designated account of the energy group, the stock market’s consideration picked up strongly.

     

    Diversified income streams

    Oando has indicated that N19.3 billion of the N30.7 billion new capital would be allocated to reducing the outstanding balance of Oando’s ongoing $1.6 billion acquisition of ConocoPhillips’ Nigerian assets, which has a scheduled completion date of January 31, 2014.

    Group Chief Executive, Oando Plc, Mr. Wale Tinubu, said the success of the special placement brings the energy group one step closer to completion of the ConocoPhillips’ acquisition. According to him, the success of the special placement represents another key milestone in the achievement of the group’s overall strategic re-focus.

    “A significant portion of the proceeds will be used to finance the closure of our upstream asset acquisition process; a transaction we believe will transform us into a major indigenous producer of oil in Nigeria. The inherent value to our esteemed shareholders is evident, as we look to grow our asset base and income streams, whilst at the same time enlarging the portion of revenue we are able to declare as profits, through the increased margins the upstream business offers us,” Tinubu said.

    He noted that the new capital issue indicated Oando’s short term corporate and operational strategy to vastly increase its equity portfolio through a three-pronged approach to reduce debt, improve diversification in upstream, and focus on higher margins.

  • ‘PIB will affect gas venture agreement’

    The Chairman, Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry, Mr Mark Ward, has said if the Petroleum Industry Bill (PIB) is passed into law in its present form, it will affect the Joint Venture Gas Agreement between the Nigerian National Petroleum Corporation (NNPC) and the international oil companies (IOCs).

    Delivering a paper titled: ‘’Fiscal provision and challenges to investment in the petroleum industry,’’ at a power summit in Lagos, Ward said the PIB will not benefit the foreign oil companies that are parties to the agreement.

    He said PIB would encourage local participation in oil and gas, as well as affect the stake holdings of multinational oil companies in the project.

    He said: ‘’Studies have shown that PIB will affect the involvement of oil majors in Nigeria’s oil and gas industry. PIB will make Joint Venture Agreement on Gas fiscally uncompetitive. The reason is because PIB will increase participation in the gas sector, thereby affecting the foreign oil companies. The cost of gas project is higher than the regulated gas prices in Nigeria.’’

    He said crude production would drop by 800,000 barrels per day by 2022, unless the government took steps to resolve issues such as oil theft and pipeline vandalisation.

    He argued that Nigeria will have one of the harshest fiscal regimes when the PIB is passed because there would be less foreign participation in the oil industry.

  • ‘FDI in oil, gas’ll grow economy’

    ‘FDI in oil, gas’ll grow economy’

    The Nigerian Investment Promotion Council (NIPC) has said the gap between demand and supply in the oil and gas sector can only be bridged when there is effective Foreign Direct investment (FDI) into the sector.

    It said the nation has continued to attract major international oil companies due to the conducive economic environment and condusive regulatory framework that would promote competition and ensure transparency.

    The Head, SouthWest Zone of NIPC, Isaac Idowu, told The Nation that the Federal Government has designed laws that make for enterprise promotion as the economy is private sector driven, with over $130 billion investment.

    He said the strength of the economy lies in the fact that it has predictable investment climate and a huge population where foreigners can own 100 per cent enterprise.

    In his words: “ Nigeria has proven to be among the most investment-friendly nations for International Oil Companies (IOC), not only because of the geological configuration of its terrain, but the relative security of investments in the economy. Also, the government is putting in place a regulatory framework that would promote competition and ensure transparency in the industry.”

    Other reasons why one should invest in the sector, Idowu added, are the abundant and growing reserves of crude oil and gas, effective regulatory framework that promotes private sector as engine of growth, partially-deregulated downstream subsector with determination to fully deregulate the sector.

    He said the existence of oil and gas free trade zones for downstream manufacturing activities, high return on investments, unhindered repatriation of profit, capital and dividends, in addition to investment protection against expropriation and nationalisation, are some of the pecks government has made available for investors.

    On the investment opportunities in the sector, the NIPC chief said there has been search for development of local substitutes for such items as medium pressure valve, pumps, shallow drilling equipment, drilling mud, bits fittings and drilling cement and any investor that ventures into such areas will prosper.

  • ‘Why cooking gas is scarce’

    DESPITE the resolution of the crisis over payment of service charges between the Nigerian Liquifield and Natural Gas (NLNG) and the Nigerian Maritime Administration and Safety Agency (NIMASA), the scarcity of the Liquifield Petroleum Gas (LPG) also known as cooking gas still persists.

    The Nation confirmed during a visit to NIPCO and NAFGAS plants in Apapa, Lagos that operators are rationing the product among their customers because of inadequate supply.

    The development has resulted in the hike of the price of product. For instance, a 12.5-kilogramme cylinder of cooking gas goes for between N3,500 and N4,000 instead of N2,500.

    An operator attributed the problem to a problem in the shipment of the product.

    The source said vessels moving LPG from Bonny to Apapa, spend between two and three weeks, instead of two days.

    “The turnaround from Apapa to Bonny was 48 hours. Then, the vessels spent 24 hours moving and going back from Bonny to Lagos. Now, it takes three weeks for the product to arrive Lagos, making it difficult to get the product to the public in time, he said.

    The Chairman,Nigerian Liquifield Petroleum Gas Association Mr Dapo Adeshina said it would take some weeks before the situation returns to normalcy.

    He said the problem was a fallout of the crisis between NIMASA and NLNG, adding that NLNG has not adjusted to the normal schedule of shipping the product from its base to Lagos.

    “The vessels go back and forth. By the time, the vessels get back to Lagos, the plants have run out of the product. This made customers (wholesale and retail) to wait for days to get cooking gas.

    “NAFGAS is a dedicated LPG terminal. When ships berth at NASGAF, they disharge their content immediately. Unlike other terminals, ships cannot discharge gas immediately. They have to wait for ships carrying premium motor spirit, kerosene among other products.

    “When you look at the process well, you will understand that it is a bit cumbersome. This implies that it would take sometime before things get back to normal position,” he added.

    NLNG’s General Manager External Relations Dr Kudo Eresia-Eke said the organisation has increased gas supply from 150,000 metric tonnes to 250,000 metric tonnes yearly to meet domestic needs.

     

  • NAPE to govt: Execute policies to boost oil and gas

    NAPE to govt: Execute policies to boost oil and gas

    The Federal Government has been urged to implement meaningful policies that would boost oil and gas operations in the country Speaking during the monthly technical meeting of the Nigerian Association of Petroleum Explorationists (NAPE), in Lagos, the Managing Director, Seplat Petroleum Development Company Limited, Austin Avuru, said the biggest problem facing the industry is that the government had treated policies as events, when policy formulation should rather be a process.

    He said if industry policies are effectively implemented, the oil and gas industry would remain active and useful to the entire economy, harness infrastructural development, open up avenues for job creation as well as streamline sources of revenue for the government.

    Some industry players noted that there are good policies in place but blamed the government for not doing enough to ensure effective implementation of these policies.

    Avuru, who delivered a lecture entitled: Policy and activity in the Nigerian petroleum sector, said: “We treat policies as an event, where as there are departments of the government whose jobs everyday is to look at these policies and their application on a continuous basis and their relevance. Any one that is not relevant it is their daily job to look at how changes would be made to those ones.

    “It is not how much complicated the policies are, it is the fact that we are not engaging policies with the attendant result of those policies and then the application of those policies when changes ought to occur. These are the things that should be a continuous business of the government and policy makers.”

    Avuru said that the government has not done a good job of managing the nature-given wealth over the past 50 years. “We have laboured to share rather than create, and even in sharing we have been found wanting. The parlous state of our economy today only summarises the fact that we have, so far squandered our riches,” he added.

    He said efficient management of a rent economy such as Nigeria requires a consistency of disciplined and visionary leaderships, capable of applying the ample rent so collected to fund a long-term programme of massive education of the citizenry, provision of quality healthcare and a solid infrastructure backbone as well as guaranteeing security of lives and property.

    He noted that a healthy, well educated citizenry operating under a conducive environment would re-generate a secondary economy that would gainfully engage the rest of the population.

    The President of NAPE, George Osahon agreed that policy drives the oil and gas industry. He said without laws, there would be no operations. “It is the law that drives what we are doing, so it is very technical,” he said.

    He however, said there was nothing wrong with what the government has done. The government, he said, had good intentions but some of the policies that were put in place had not advanced the course they had set for themselves.

    He recalled that the government had established the indigenous proprietorship programme and had also changed some aspects of the laws with the policy of the current time. Moreso, the government had given out marginal fields to some companies as independent operators in the industry many years ago.

    On potentials for shale gas, Osahon said that Nigeria has shale gas that can be exploited but the cost of exploiting one barrel of shale oil is so high compared with one barrel of conventional oil.

    According to him, conventional oil is much cheaper than shale oil. He said: “We have to explore the cheaper one first before we go to the more expensive one.”

    He said that the discovery of shale gas is all over the world, adding the US is the one that is actively producing its shale gas but not the only one that has it. He said that anything that happens in any part of the world relating to energy would affect the global energy sector.

    “There is nothing worrisome about what is happening. What we need to do is to look at what is happening and change style if so required, if we must continue to be relevant in the energy sector,” he said.

     

  • Falcon Petroleum eyes gas distribution in Ghana

    •To manufacture equipment

    Falcon Petroleum Limited, which has the franchise to distribute natural gas to industries and bulk energy users in Ikorodu, Lagos, has concluded arrangement to extend distribution of the product to Ghana.

    The Managing Director of the company, Prof. Joseph Ezigbo, made this known at an event for women of Ikorodu Phase II pipeline host communities.

    He said: “We are not only hoping to invest in Nigeria, we are also looking at Ghana. At the moment, we are working with our partners in Ghana to supply gas in the West African country. We are interested in building a gasification plant in Ghana to supply gas to industries in that country.

    “Though Ghana is already getting gas from Nigeria through the West Africa Gas Pipeline Company (WAPCo), this is not enough for Ghana at the moment.”

    On the other plans of the company, Ezigbo said: “Falcon Petroleum has grown substantially. We are consolidating on pumping gas to industries. We are also increasing our capacity. At the moment, the company is building a 12-inch gas pipeline. This will increase the gas supply as well as gas coming into our system. This will also increase the ability of our customers to be connected to our gas supply grid as required.

    “We have also gone into assembly and manufacturing of equipment, which is used in the country’s oil and gas sector. We have entered into a partnership with a company in India to operate a company in Nigeria to fabricate gas stations. We believe that when the Petroleum Industry Bill (PIB) is passed, there will be industrial explosion in the country. That means the industrial development will escalate.

    “We hope to complete the first phase by March this year. We are also trying to expand to other areas of the country because whether we believe it or not, industries depend on gas and the industrial revolution will not just be within the western region, but all over the country.”

    Commenting on the company, Ezigbo said: “As the first phase of the Ikorodu gas distribution phase project continues to witness an upsurge in the gas requirements of customers, and coupled with new industrial off-takers and prospects positioned along the Lagoon expansion axis, Falcon Petroleum Limited has initiated a capacity upgrade on its existing City Gate metering and regulating facility.

    “The capacity upgrade is necessary to enable the company to meet its immediate, medium and long-term supply obligations to its ever growing customer base. The new 25 million standard cubic feet per day (mmscf/d) capacity City Gate station will ensure a hitch-free gas delivery to all our customers in accordance to the requirements. The enhanced station will also ensure availability of excess capacity to meet any future supply nominations that may be required over the next few years.”

    He said the Ikorodu community has provided friendly environment for the company’s operations.

    “In Ikorodu, the people are so civilised and are very appreciative as well. This vocational training being sponsored by Falcon Petroleum is a way of saying thank you to the people of Ikorodu.

    “We will not stop here. We will send them for industrial attachment and will have monitoring team to monitor them, after which a starter-pack will be provided for them. They will be given a certain amount of money and equipment to start their businesses and we monitor them for one year to ensure that the system goes on as planned.

    “At the end of the training, we will select another group. It is a progressive thing because at the end of the day, the company would have empowered them to face the future positively.”

    Falcon Petroleum supplies gas to industrial giants such as Mayor Engineering, Spintex Mills, African Steel Mills, Sunflag Steel, Lucky Fibres and Energy Company of Nigeria – an independent power plant,, among others.

     

  • ‘Why we can’t get oil, gas accounts’

    • Firms blame NNPC for blocking them

    Insurance brokersare groaning under the weight of hurdles placed on their path for oil and gas accounts by the Nigerian National Petroleum Corporation (NNPC).

    A source, who preferred not to be named, said the hurdle, restrains insurers from qualifying for risks allotted to local brokers by the Nigerian Content Policy.

    The source said 34 brokers were engaged for the NNPC lucrative account last year, but the number was reduced to 14 this year. The number may also go down next year, it was learnt.

    President, Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs Laide Osijo, said the corporation has subjected brokers to enormous demands.

    She said the operators are worried because they thought they would acquire more knowledge as they grow on the business, but regretted that the reverse is the case now, as they are not given the opportunity to improve their knowledge on the job.

    She said: “Honestly, in the area of oil and gas, the Nigerian Content Policy made provision for local operators to be trained, so that the business could be handed over to us. But what the oil and gas operators are doing is contrary to what is expected.

    “What they are asking for was never envisaged when the law was provided.The NNPC is really putting more demand on brokers. We are worried because we thought we would acquire more knowledge as we grow in the business, but reverse is the case.

    “We have undertaken oil and gas training at home and abroad, but with the restrain by the oil and gas operators, we can never put to test what we learnt. With the things they are asking for, hardly can 10 brokers or even five qualify for the business. If they are doing it intentionally, where do we then put the local content law?”

    She said the operators were supposed to be trained so that the foreigners would hand over the businesses to them, adding that if the operators are not given the practical training and exposure, how they would learn.

    “The oil and gas operators have been unfair, but we will continue to strive until we get there. The first time they did it we had 34 brokers engaged, and the next one we had 14. We thought after getting 34, we would have higher rate, but they went and reduced it. This year, they put so many conditions and at the end only few brokers will also be engaged.

    “It is unfair to the local content law. The local content law is there to protect us and put food on our table, but the way they are asking for some many things, it is really disturbing. We will continue to strive to meet their demands.’’

    Laide further said: “Honestly, the brokers are complaining. They are not happy about it; most of them have paid so much to certified many documents. Corporate Affairs Commission (CAC) gave us certification, but NNPC still want us to recertify it and they would give us short notice within which they want us to implement these things”.

    She noted that many brokers have written petitions to her office about the roadblocks placed by the NNPC for qualification, adding that the corporation is not given brokers fair treatment.

  • Gas: A window of opportunities

    Gas: A window of opportunities

    Utilisation of natural gas to power industries, such as steel,manufacturing and others has brought succour and reduced the cost of production, reports DANIEL ESSIET

    With good reason, investors continue to see gas as the Holy Grail of economic transformation. After all, historically it has been the one special engine that has powered the economic rise of nations. For this reason the government is placing high priority on further increasing its natural gas production in an attempt to boost foreign earnings. The government has been consistently encouraging its national oil and gas companies to invest and pursue opportunities in the gas markets.

    With this support, the nation has seen an influx of activity with more projects proposed, construction commenced, and pipelines commissioned.

    Speaking on the topic “Natural Gas: Sustaining Nigeria as a major player in the global gas business amidst competition from other energy players” at the just concluded 8th International Gas Conference and Exhibition in Abuja ,Managing Director/ Chief Executive, Nigeria LNG Limited, Mr Babs Omotowa,said the government is set to ramp up gas production by developing its huge reserves.

    He said overall level of economic activity, is driving long-term demand for natural gas. He said Nigeria is experiencing the benefits of a period of very high gas industry growth through the development of the LNG industry.

    He assured of more than enough gas to meet demand for both the export and domestic markets.

    Speaking on Nigerian content – Supporting Gas Development Through the Nigerian Content Act, Executive Secretary, Nigerian Content Development and Monitoring Board(NCDMB), Ernest Nwapa said the board is ready support gas development by providing technology, knowledge and skills to transform the nation’s fortunes.

    He said one way the government could build a strong and resilient economy that had the capacity to provide decent jobs with satisfactory remunerations, was to tackle the issue of youth unemployment using the oil and gas sector.

    The Managing Director,Total Nigeria Plc, Mr Guy Maurice, said the company has strong experience in operating large gas fields, LNG plants and gas storage.

    He said Total is one of the world’s largest energy groups with a strong presence in Africa including more than 4,700 service stations in more than 40 countries. According to him, the organisation owns and operates 5,000 km of gas distribution pipeline.

    He said gas utilisation represents another opportunity to bring technology and competences within the reach of Nigeria and its peoples.

    He said active partnerships between the investing companies, the Nigerian state, and the Communities are necessary if all actors are to derive maximum benefit from this influx of foreign investment and technologies. He said such partnerships would be enhanced through readiness of all parties to boldly listen and engage, mutually support and work inclusively to develop the society in sustainable ways.

    He said Nigeria can benefit from experiences from other lands, but Nigerians themselves would have to decide the pace, quantum, and impact they want the gas era to have in their nation.

    He said the way forward is to redefine regulations that foster active engagement of all parties across the gas value-chain.

    Domestic gas users had raised concerns about affordability and security of supply, in terms of securing medium and long-term contracts.

    In the communiqué was issued at the end of the conference and exhibition, the Nigerian Gas Association (NGA),it stated: With proven gas reseres of up to 187TCF and one-third of Africa’s gas reserves, Nigeria qualified to be in the league of nations which had achieved gas-driven industrialisation, but sadly, Nigeria has not fully exploited the opportunities to leverage these resources to achieve industrialisation through extensive domestic penetration and development of gas based industries and the establishment of additional export oriented projects. Although government had embarked on an extensive gas network infrastructure backbone across the east, west and northern parts of the country, the state of infrastructure and issues relating to fiscal, financing, pricing and regulatory framework were still major challenges to gas export, utilisation and penetration in the country.”

    The conference noted the emergence of other gas plants since NLNG such as Brass LNG and OK LNG even though the vision to have major LNG, export terminals in key coastal areas was yet to be realised. The commendable achievements being made in Nigerian content development, especially in job creation and human capacity development, since the enactment of the NCD Act and the creation of its Monitoring Board. Discoveries of large gas reserves in other African countries and the emergence of Shale gas is tightening the window of opportunity for Nigeria.

    In commending the Federal Government, led by President Goodluck Jonathan, for launching the Gas Revolution to make Nigeria a regional hub for gas-based industries, the Conference called on the Ministry of Petroleum Resources to provide leadership and ensure sustenance of the initial momentum and the federal Government to engage the Organised Private Sector and other stakeholders ( in the oil and gas sector) in a comprehensive, inclusive dialogue and negotiations of the contents, direction and intention of the PIB so as to address all differences and ultimately enact a law which would reflect national aspirations as well as protect all stakeholders’ interests.

    The conference, while expressing delight at the progress, made in the gas revolution, observed that a lot of work still needed to be done, especially against the background of intense global competition in the gas industry. It therefore recommended that government should expedite action.

     

    Concerns

    Ports accepting LNG tankers are large and capital-intensive.The receiving facilities must be operated for long periods to generate returns to investors. Moreover, there are those who believe such coastal facilities will have negativeeffects on the local environment.

    For watchers,the concerns is whether the discovery of oil will bring prosperity and hope, or a political and economic curse, as has been the case in so many countries.