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31/03/2021 News

Decade of Gas: We Need to Trap more Funds and Investments in Nigeria – Sangster

“Nigeria stands high with large resources of oil and gas but has only attracted 4% of investment over recent years. So clearly, we need to address the companies, industries and authorities to find a way to trap more funds and more investments in Nigeria,” said the Managing Director, Total upstream companies in Nigeria and the Chairman, Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI), Mike Sangster.

He made the call at the Pre-summit Conference of the Nigeria International Petroleum Summit (NIPS) that heralded the official declaration of year 2021 – 2030 as the Decade of Gas in Nigeria.

The hybrid event – because it had on-site and virtual delegates - was held at the Transcorp Hilton, Abuja on Monday, March 29, 2021.

Speaking at the first panel session titled: The Decade of Gas: Its strategic relevance to the economy, Mr. Sangster said: “The PIB is a great opportunity to stimulate investment for gas and I think it is an opportunity really to put in place a governance and fiscal system which really encourages investment both in the midstream and upstream side of the gas market. And I think it’s a right opportunity to really develop the right business environment for the industry.”

While responding to a question on the need for Nigeria to attract the right financing, the MD remarked that, “The country is resource-rich, but we need to stimulate investment. We need to develop the resources both for the domestic and export market. Once we have an attractive, stable business environment and an attractive comparative fiscal regime, the investment will come. No one doubts the quantity of resources we have here in Nigeria but with the right regulatory regime, it will make people want to continue to invest. As Total, we will love to invest as well in renewables in Nigeria, but the challenge so far is to have a bankable Power Purchase Agreement (PPA).”

Nigeria’s President, Muhammadu Buhari declared the Decade of Gas in Nigeria and addressed the conference. He said: “It is well known that Nigeria is a gas nation, but the country has focused on oil over the years and that is the paradox this administration has decided to confront when we declared the year of gas in Nigeria. It was a bold statement to demonstrate that gas development and utilisation should be a national priority to stimulate economic growth, further improve Nigeria’s energy mix, drive investment and provide the much-needed jobs for our citizens.”

The President called for a gas revolution to change the country to an industrialised nation and further gave indications of his administration’s commitment towards this through the Natural Gas Expansion Programme (NGEP), Auto Gas Policy and reconstruction of the 614-km Ajaokuta-Kano gas pipeline.

Reacting to the clarion call for investment into the oil and gas sector, the Minister of State for Petroleum Resources, Timipre Sylva commented that: “As a country we went in the wrong direction in the oil and gas business since the 1950’s. As usual we try to trade blames but today, I want to say the solution is in sight and it is the PIB. The National Assembly has shown commitment that the PIB will be passed in April, hopefully, and then all these blame game, hopefully, will end. One of the things I worry about with the PIB is that as a government, we have bent over backwards on a lot of provisions in the PIB, but will this attract investment to Nigeria? Are the investors ready to invest? We must see commitment from our investors so that when we bend over backwards, they too will bend over backwards and that is the meeting point we need.”

Giving an operator’s point of view on the need for fresh investments in the sector, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mele Kyari added that “we need to get the gas policy right and we are at that threshold. Once we have the fiscal framework right, then the rest becomes business because investors will see the opportunities, they will put money. Banks will see the opportunities because you can recover your cost and make your margin, but we as a nation have another dimension. We are seeing gas as a source of development for our country, creating prosperity, creating jobs and that can only come when investments work and with the right fiscal framework, obviously that connection will come up. NNPC’s role is to move forward, accelerate and clear the communication with the right fiscal framework that will be on ground and that is already on ground.”

Other speakers added their voice and contributions to the discourse on the Decade of Gas as many prepare for the NIPS Summit taking place from June 2 – 10, 2021 at the International Conference Centre, Abuja.

Total Management and staff participated in the high-level pre-conference summit.