Yemie Adeoye & Christian Olise

The Federal Government has announced that Nigeria has commenced gas distribution to neighbouring West African countries through the West African Gas Pipeline scheme which runs from Lagos to Takoradi, even as the Nigerian gas sector is currently begging for a 20 billion dollars annual investment from the government if it must be optimally harnessed.

According to the Minister of Petroleum resources, Mrs. Diezani Allison-Madueke who dropped the hint during the Annual technical conference of`2 the National Association of Energy Correspondents, NAEC, in Lagos, Nigeria is endowed with about 187 trillion cubic feet, TCF, of proven natural gas reserves, adding that another estimated 600, TCF, is yet to be discovered.

“Our oil production is over 2 million barrels per day and we currently produced about 8 million cubic feet of natural gas per day” she said.

The minister, who was represented by the executive secretary of Nigeria Content Development and Monitoring Board, NCDMB, Dr. Earnest Nwapa, noted that the renewed focus on the domestic gas sector will drive unprecedented growth in gas utilization from 1 billion cubic feet per day to 5billion cubic feet per day by 2015.

She said, that this growth rate is forecast to be world`s most aggressive growth in gas sector by stimulating an unparalleled level of investment activity in the country.

Commenting further she said, the Nigerian content Act is a key step taken by government in recent years to ensure that oil and gas activities resulted in economic development.

The minister also said that the implementation of the Act has provided immense inspiration and confidence to adopt the pilot schemes, which are already making positive and measurable impacts in the sector.

She also said that the Act is not intended to indigenised the industry or nationalise investors assets in the Nigerian economy, adding that it sets out provisions that guarantee investment made with the country, to ensure the right of every investor is protected under the law.

She also noted that government has taken another major step to unlock the enormous potential of the domestic gas sector to attract investments, adding, “We have implemented the most aggressive reform of the commercial framework for gas in Nigeria to address the observed inadequacy in the commercial terms that stunted investment.

As a government our desired is to ensure that substantial proportion of this investment is retained in Nigeria as unique provision in the Nigeria Content Development Act, the minister said.

Speaking further on the gas sector investments the minister said that the oil industry currently needs to spend about 20 billion dollars annually, even as upstream gas production for the domestic gas market alone has been receiving a dedicated spend of between 1.5 to 2 billion dollars annually from the federal Government of Nigeria.

She told the large gathering of industry professionals at the event that the major operators have not helped matters by reliance on the importation of goods and services from abroad without making the provisions to develop sustainable capabilities within Nigeria that would support life cycle operations in Nigeria.

“Instead more emphasis have been placed on speedy achievement of first oil, generation of revenue without paying attention to actions that add value to the economy.”

For some time it has been a major concern that after many decades, contractors and multinationals that have done business worth several hundred millions of dollars in Nigeria do not have appreciable footprint in Nigeria. Instead, the trend has been to look to foreign countries for operations in Nigeria and the Gulf of Guinea region .

The cumulative effect of operating this model for so long is that in an industry that currently spends an average sum of 20 billion dollars per annum, less than 2 billion dollars is retained in the national economy and over 300 billion dollars has been lost to capital flight in this way, of more significance is the fact that this persistent practice has actually resulted in the export of millions of employment opportunities, opportunities for training, knowledge and technology transfer, opportunities for investment in facilities and infrastructure to support industry operations within Nigeria and denied indigenes of Nigeria the opportunity participate in the most critical aspect of their national development activity”