Notwithstanding that the increasing global demand for Liquefied Natural Gas (LNG), Nigeria may lose its high ranking to growing competition, if urgent actions were not taken to address the sagging investment profile in the sector.
The Managing Director/ Chief Executive Officer of Nigeria Liquefied National Gas (NLNG), Babs Omotowa, who made this declaration at a media luncheon organised by Petroleum Club in Lagos, said that “with no new investments, Nigeria will possibly drop from fourth to 10th position by 2020,”
Nigeria, with a production base of 19.4 million tonnes per annum (mtpa) is currently rated fourth in the global LNG scale after Qatar, Malaysia Australia.
He lamented that the sector has recorded less investment since 2007 till date, while firms continued to divest due to risks and uncertainties around the regulatory framework.
Other major issues impeding imvestment include poor joint venture funding, Production Sharing Contracts (PSC) challenges, delay in passage of Petroleum Industry Bill (PIB), Insecurity/bunkering and real capacity development in line with the Nigerian Content Development (NCD).
Besides, Omotowa revealed that the company had spent about $360 million on the train seven project that has been delayed for about 10 years now.
Omotowa therefore called for improved industry collaboration adding that government’s role on policy, business climate, investment model is key to survival of the industry.
He enjoined the Petroleum Club to be more influential on government policy and actions in the industry.
The NLNG boss however disclosed that the company has generated $90 billion since 1999.
According to him, the company’s payment to Joint Venture (JV) feed gas suppliers from inception till date is about $21 billion; and $33 billion paid to the Federal Government via its shareholding in Nigerian National Petroleum Corporation (NNPC).
He further stated that ‘the company, since 2008, contributed about four per cent of Nigeria’s yearlyGross Domestic Product (GDP), adding that NLNG provided more than 12,000 jobs each construction year.
“Overall, the major sub-contractors employed over 18,000 Nigerians in technical jobs in the base project. NLNG’s shipping subsidiary Bonny Gas Transport (BGT) recently ordered six new Dual Fuel Diesel Engine (DFDE) LNG carriers from Hyundai Heavy Industries (two ships) and Samsung Heavy industries (four ships). Four of these have been delivered and have since made their maiden voyages”, he said.
The former Minister of Petroleum, Don Etiebet, told The Guradian that the present administration would change the face of the petroleum sector.
According to him, the president was a former Minister of Petroleum who has good knowledge about the sector.
He added that for Nigeria to move forward, the oil and gas industry must move forward.The problem has always been the failure at the top to make sure the industry is policed properly.
“Under Buhari administration, I tell you that there will not be such failure. Most of the structures we have on ground today are structures put up during the past 17 years; and these are the structures that have disappointed the system.How do you expect Buhari to fix such collapsed structure in one year?” he said.