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PIB to generate 30,000 jobs locally, FG

By Yemie Adeoye
THE Federal government has announced that in view of the planning and strategies put in place to bring about a smooth passage of the Petroleum Industry Bill (PIB), investment inflow afterwards are expected to generate about 30,000 jobs locally even as it laments poor funding of gas infrastructure in the country.

The Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke dropped this hint yesterday at a conference organised by the National Association of Energy Correspondents in Lagos.

The Minister stated further that the growth in gas demands has created a major opportunity for the sector even as there are challenges such as poor commercial framework for gas, inadequate gas supply infrastructure, as well as inadequate funding in the face of competing demands for funds in the oil sector.

“Addressing these challenges has been our focus lately, and significant progress is being made.  In the last few months we have focused aggressively on implementing the most aggressive reform of the commercial framework for gas supply to power in Nigeria.”

Mrs. Alison-Madueke also stated that the country’s four refineries are currently working at an optimal capacity utilisation of 60 percent and that the Nigerian National Petroleum Corporation, NNPC has also acquired about 437 service stations nationwide in addition to the 37 mega-stations across the country and 12 floating mega-stations dispersed to several coastal regions of the country.

Speaking on the recently passed Nigerian Content Act, the Minister stated that with the passage of the bill Indigenous companies are expected to the right of first refusal (preference), in the awards of oil blocks and other contracts in the oil sector.  This effort by government is primarily targeted at growing indigenous participation in the nations oil and gas sector .

“clearly, our aspiration to be one of the world’s top 2020 will require a significant increase in electricity supply and availability across the country . A recognition for the need to achieve this increase is evident in the massive investments being made by the FGN in the power sector.

From less than 3.5Giggawatts (GW) generating capacity in 2005, the Nigerian power sector is undergoing an unprecedented growth to possibly as high as 15GW by 2015 based on projections, a significant portion of this would be coming from gas.

The growth in thermal plants translated into a massive increase in gas demand, from a modest gas demand of about 650 mmcf/d in 2005 , the power sector now requires about 1140 mmcf/d by the end of this year and 300 mmcf/d by the end of 2015.  This represents a growth rate of 16.5 percent per annum compared with global averages of about 3 percent. This growth has been a significant stretch for the relatively young Nigerian domestic market.”

The Minister stated that government has focused more aggressively on implementing the most the reform of the commercial framework for gas supply to power in Nigeria and she listed some of these as “ A revision of the gas price to power from the non-commercial level in the past to a more sustainable commercial level.

Hence gas to power price in Nigeria will, over a transition period, increase steadily to $1/mmbtu by year-end 2010 and $2/mmbtu by end 2013. We have also implemented a robust commercial agreement template both for gas supply and transmission in Nigeria.

The first of such world class commercial agreements was signed recently between the Pan Ocean/NNPC JV and Egbin Power plant. The new agreements are more bankable and would enable supplier and investor confidence in gas development.

Finally, we have implemented the World bank partial risk guarantee to address the concern by suppliers of payment for gas supplied.  With this scheme, suppliers are now assured that when the supply gas to government owned plants, they will be paid.”


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