Guardian ‘Nigeria loses N272b yearly to poor development of gas resources’ TUESDAY, 09 JULY 2013 20:22 BY ROSELINE OKERE BUSINESS SERVICES -BUSINESS NEWS AT the prevailing market price of $3.50/1000 standard cubic feet, Nigeria may have been losing $1.7 billion (N272 billion) yearly to underdevelopment, underutilization and flaring of gas resources, the Department of Petroleum Resources (DPR) has said. The newly appointed DPR Director, George Osahon, made this disclosure Tuesday at the yearly general meeting of the Nigerian Gas Association (NGA) in Lagos, with the theme: “Petroleum Industry Bill (PIB): Analysing the challenges and opportunities on the gas value chain and solution for successful implementation in Nigeria”. Osahon specifically put the country’s daily revenue loss to this menace at $4.9 million (N784 million). According to the Director, the country produces 8.0 billion cubic feet per day (bcfd), utilizes 6.5 bcfd but flares 1.4 bcfd of gas. The nation’s gas reserve is currently estimated at 5.12 trillion, but he didn’t disclose details of the concomitant losses to low capacity utilization. Osahon who was represented by DPR Deputy Director, Gas, Oliver Okparaojiako, however stressed that the country aspires to create as much revenue from gas as in oil, address environmental issues and end gas flaring. “We aspire to develop domestic market, create new industries out of the petroleum industry. Similar to oil, the sector aspire to grow the gas resources base aggressively to catalyse growth of the wider national economy”, he stated. He lamented that for the first time in many years, the country’s oil and gas reserves were on the decline. Therefore, the need to reposition the oil and gas industry to foster a long-term sustainability of the sector and ensure greater efficiency and effectiveness cannot be over-emphasised. “There is need to formulate policies that promote competition, review the legal and regulatory frameworks and create a strong and independent regulatory commission for the sector, while making the ministry of petroleum resources focus on policy formulation”, he added. Osahon listed the sector reform priorities to include increase in exploration activities and expansion of reserves; formulation of a new national oil and gas policy; liberation of downstream petroleum sector; refocusing and strengthening sector regulation; and the establishment of an independent regulatory authority to oversee activities. He added: “The sector reform objectives also seek to limit the federal government’s involvement in the sector to policy formulation and fiscal matters. It is also to increase government take in line with international standard”. Osahon noted that the implementation of the oil and gas reforms would strongly open up the sector to new local and international investors for competitive growth and sustainable development in line with international best practices. The Group Executive Director, Gas, Nigeria National Petroleum Corporation (NNPC), David Ige, said that the Federal Government’s master plan for the gas sector has been able to pave the way for an unprecedented growth potentiality, thereby making the country one of the leading producers in the world. “In the next three years, we are going to have gas pipelines that span all over the country. In the next few weeks from now, we will kick start the construction of the country’s gas industrial park”, Ige said. He cautioned the international oil companies to move away from determining the price of gas with the price of oil, saying that the country now has some players who operate on willing buyers and willing sellers basis. The Chairman of Oil Producers’ Trade Section of the Lagos Chamber of Commerce, Mark Ward, said that the fiscal terms in the PIB was not investor-friendly, therefore, there is the need for the government to ensure that it passes a bill that would protect investments in the country. He said that about 90 per cent of joint venture gas projects will not be viable under the new PIB, adding that the aspiration to energise the gas sector will not be attained as a result of harsher fiscal terms, higher royalties and taxes coupled with lower allowances. “PIB gas fiscals will make Nigerian gas sector extremely uncompetitive”. He noted that the achievements recorded so far in the country’s oil and gas sector was a fraction of the sector’s potential for growth.
Posted on: Wed, 10 Jul 2013 08:52:22 +0000
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