Operators seek effective legislation for Nigerian gas development


By Ejiofo Alike | This Day, Nigeria September 28, 2017

Operators in the Nigerian oil and gas sector at the opening session of a three-day Nigeria Gas Summit 2017, which started yesterday in Lagos, have called on the federal government to enact effective legislations to develop the Nigerian gas sector, stressing that the current legislation of Petroleum Act of 1969 prioritised crude oil production.

The operators argued that for the country to maximise her potentials in the gas sector, all the political, regulatory, structural and fiscal challenges in the gas sector have to be addressed and all contractual or policy-based issues legislated.

In his lead presentation on ‘Updating the Nigerian Gas Framework for a Gas Intensive Future,’ Partner and Head of Energy and Natural Resources at Streamsowers & Kohn, Mr. Chiagozie Hillary-Nwokonko, insisted that with what is happening in Nigeria and the broader world, the country is destined for a gas-intensive future.

Hillary-Nwokonko, who was a member of the technical committee of the Special Task Force for the review and implementation of the previous version of the Petroleum Industry Bill (PIB), stated that the current legislative framework is insufficient to catapult Nigeria into the gas-intensive future.

He noted that the current legislations, which were all grounded on the Petroleum Act of 1969, focused largely on crude oil production.

“We have all heard about the huge natural gas endowment that Nigeria has; the large market that we have in principle; the even larger regional markets and the sub-par performance so far in harnessing these resources to meet our requirements in Nigeria. Most of what actually happened in Nigeria in terms of gas has been more export-led or export-oriented. But going forward, I think we all agree that with what is happening in the broader world and also what is likely to have in Nigeria, that we are destined for a gas-intensive future. The thing is how do we get there; how do we deliver that and how do we maximise the potentials that we have,” Hillary-Nwokonko said.

He said for the country to achieve its potentials in the gas sector, effective legislations have to be developed to create the needed certainty that would incentivise investments.

“My view is that for us to achieve maximisation of our potential for a gas-intensive future, a lot of what today is either contractual or policy-based has to be legislated and not just in secondary legislation but in primary legislation because that is what is going to create the certainty that investors need to be able to invest in gas projects, which are long term projects,” he explained.

He added that the current legislations would be insufficient to engender a gas intensive future, stressing that there are political, regulatory, fiscal and structural challenges that hamper the development of the gas sector.

In his speech, the Chief Executive Officer of Seven Energy, Mr. Manish Maheshwari stated that the operators in the power and gas sectors cannot access funding as a result of the dysfunctional state of the value chain.

He argued that only a quarter of the country’s 12,000 megawatt electricity installed capacity gets to the consumers as a result of the dysfunctional state of the value chain.

According to him, 5,000MW is lost to vandalism; 3,000MW is non-operable; seven per cent is lost in the transmission grid; while 12.5 per cent is lost in the distribution assets as technical losses.

Maheshwari, who was represented by James Odiase, added that only 50 per cent of electricity consumed by customers is paid for.

Related stories


AsokoNews Brief

Sign up for our weekly Africa Business Digest, highlighting the Top 5 stories per sector