A global data and analytics company, GlobalData, recently released a…
The current situation of the Nigerian oil and gas industry begs the question “what next”?
Many investors are in search of the next big opportunity in terms of profitability and acceptability. Coincidentally, a lot of investment opportunities can be found in the natural gas sector of the Nigerian petroleum industry as it continues to gain increasing attention from investors.
Nigeria’s gas production is expected to increase substantially in 2016. According to findings by BusinessDay Research and Intelligence Unit (BRIU), the country’s natural gas reserves are said to be more than twice the size of its crude oil reserves. It is estimated that Nigeria’s reserve-production ratio is about 125 years compared with that of crude oil.
For the Nigerian government, plans are underway to create new industries out of the old oil industry with the purpose of capturing economic dividends and attracting massive investments in the natural gas sector. In an article published by the Nigerian National Petroleum Corporation (NNPC), remarkable progress has been recorded towards the realization of said objectives.
Government is developing JV (Joint Venture) and PSC (Production Sharing Contract) partnerships with multinational oil companies operating in Nigeria to encourage investments in IPPs (Independent Power Plants), as part of the Power Sector reform.
The ‘Natural Gas Fiscal Reform Act’ (NAGFRA) reviewed the generation, transmission and distribution of electricity in the country to improve its performance.
The former Chairman, Senate Committee on Gas Resources, Sen. Nkechi Nwaogu, mentioned in 2014 that a significant investment of over 30 billion dollars in infrastructure is needed to achieve Nigeria’s target of producing 3.4 billion cubic feet of gas daily by 2015. She also pointed out that the low utilisation of natural gas in Nigeria was as a result of inadequate production and distribution of infrastructure which resulted in the flaring of about 1.4 billion cubic feet of gas daily.
Apart from the aforementioned reasons for growing this sector, there is a growing awareness about the need to utilize the dividends of this growth for sustainable development of the lives of people, their communities and the entire society at large.
To achieve these bold aspirations, Nigeria requires huge investments from local and international communities in human capital, finance and technological innovation.
We are indeed at a turning point in the history of gas exploration in Nigeria as favorable results are fast approaching.