Gas Suppliers: Nigeria Not a Good Destination for Investment

Stakeholders in Nigeria’s oil and gas industry have passed a verdict that following the slash in domestic gas supply by more than half due to the Niger Delta crisis, Nigeria is no longer a good destination for investment in the sector.

Speaking at a special session of the 2016 conference organised by energy reporters in Lagos, the operators declared that with the renewed attacks on oil and gas infrastructure in the Niger Delta, Nigeria’s operating environment has become a high-risk environment that is not suitable for investment.

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, represented by the Managing Director of National Engineering and Technical Company Limited (NETCO), a subsidiary of the corporation, Mr. Siky Aliyu raised the first alarm when he told the session that militant attacks have curbed gas supply to the domestic market by more than a half.

According to him, the current supply of about 700 million standard cubic feet per day is less than the domestic supply before the militants first bombed the gas infrastructure in February this year.

Also speaking at the session, the Chairman of Geometric Power Limited and former Minister of Power, Prof. Bart Nnaji insisted that Nigeria must secure gas infrastructure to guarantee electricity supply.

“Gas-to-power is critical for electricity generation. Brazil generates 100,000 megawatts. If Brazil has 100,000 megawatts and we aspire to be like Brazil by 2020, then a lot has to be done on gas-to-power,” Nnaji said.

In his contribution to the session, the Chief Executive Officer of Frontier Oil, suppliers of gas to Calabar, Alaoji and Ibom Power Stations, Mr. Dada Thomas said the only solution to the Niger Delta crisis was good governance, which he said was lacking in Nigeria.

Thomas, whose company’s gas supply to the domestic market accounts for 450 megawatts of power generation, advocated for both the use of the full weight of law and the involvement of the political leadership of the oil-rich region in resolving the crisis.

He argued that criminality should not be rewarded to avoid creating more criminality.

“A high-risk environment like Nigeria is not a destination for investment. We are not a fantastic investment destination. Good governance is the only answer to vandalism but this is lacking in Nigeria since independence. The short-term solution is to apply the full weight of law. When you reward criminality, you create more criminality. But the government should also get the political leadership involved in the negotiating table,” Thomas explained.

Thomas argued that Poland had also experienced similar crisis when the people in the eastern part of that country like the Nigeria’s Niger Delta felt that the western part of the country was exploiting their God-given resources.

Thomas further disclosed that the Polish government resolved the crisis through good governance, adding that Scotland also had the same issue.