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Nigeria Requires $3.5bn Investment to End Gas Flaring By 2020

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Gas Exports Drop as Shell Declares Force Majeure
  • Nigeria Requires $3.5bn Investment to End Gas Flaring By 2020

Nigeria would need at least $3.5 billion investments to activate the new market-based initiative it had set up to end the practice of gas flaring at oil fields in the Niger Delta by 2020, the Programme Manager of the Nigerian Gas Flare Commercialisation Programme (NGFCP), Mr. Justice Derefaka, has disclosed.

Speaking at the 36th edition of the annual conference and exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) held in Lagos recently, Derefaka, explained that the $3.5 billion to be sought by Nigeria would be brought in by investors willing to participate in the NGFCP, which according to him, has immense benefits.

Derefaka, stated the $3.5 billion investment would give annual returns of $1 billion.

“The NGFCP economic analysis also shows that with the US3.5 billion inward investments pumped in to implement the NGFCP, huge social and economic benefits would accrue to host communities in the Niger Delta, investors and the national economy as a whole.

“Benefits would include curbing pollution, climate change, global warming impacts in local communities and providing households with clean energy, particularly in unlocking LPG (cooking gas i.e. produce 600,000 MT of LPG per year),” said Derefaka.

He further explained: “In summary, this paper pinpoints the programme could trigger up to 85 projects and generate approximately 300,000 direct and indirect jobs in total.
“The potential annual revenue generation, GDP impact to the federation account is estimated at U$1 billion per annum.”

According to him, the flared gas to be monetised in the NGFCP would be harnessed from top 50 flaring points across the Niger Delta, thus reducing the volume of flared gas by 80 per cent.

He also explained that the NGFCP would reduce Nigeria’s carbon emissions by approximately 13 million tons per year, which could also be monetised under an emission credits or carbon sale programme.

Additionally, Derefaka stated that the international development partners to the NGFCP have scrutinised the initiative and subsequently proclaimed its design as detailed.
This, according to him, was an affirmation that it is an innovative, robust and scalable approach to gas flare reduction which could be replicated in many other gas flaring countries around the World.

“Overall, the NGFCP has been designed as the contribution of the petroleum sector to Nigeria’s Intended Nationally Determined Contributions (INDC) under the Paris Agreement and it is the first market driven program undertaken on this scale globally, making it a high-impact program,” he added.

Speaking on the transactional and commercial contractual structures of the NGFCP, Derefaka, stated that there would be a Milestone Development Agreement (MDA) between Flare Gas Buyer (FGB) and the federal government with the FGB undertaking to implement its project according to a set of milestones.

This, he added would also include Gas Supply Agreement (GSA) between the FGB and government which confers the government’s title of flare gas to FGBs, containing the quantities of gas contracted for, the price and the ‘take or pay terms.’

Derefaka, stated that there would also be the Connection Agreement (ConnAg) between FGBs and gas producers containing the flare gas delivery terms and conditions, rules for the physical connection of facilities, and nomination procedures; Deliver or Pay Agreement (DoPA) which is an undertaking of producers with respect to guaranteed flare gas; and Permit to Access Flare Gas (PAFG) which is a permit granted to FGB upon becoming a permit holder.

“On completion of all commercial and contractual agreement, the flare gas buyer becomes a permit holder. The FGB will pay an award fee for grant of permit to access flare gas.
“And, simultaneously with the execution of the final commercial agreements, Flare Gas Buyer will be awarded a Permit to Access Flare Gas (PAFG). This is a permit prescribed under the regulations, and is granted by DPR on behalf of FGN.

“It permits permit holder to access the flare sites for the purpose of constructing the flare gas connection assets to the producer’s facilities at all flare sites specified in the permit.

“It permits permit holder to take flare gas in the amounts contracted for under the GSA. It permits other access to those flare sites for operational reasons during the currency of the GSA. Permit holder must install metering, maintain logs and submit reports on gas utilisation, flaring and venting,” he added.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Goya Foods Takes Legal Action to Assert ‘Goya Olive Oil’ Trademark Ownership

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Goya Foods

“Goya Olive Oil” trademark in Nigeria, Goya Foods Incorporated has initiated legal proceedings against the Registrar of Trademarks under the Federal Ministry of Trade and Investment.

The case, numbered FHC/ABJ/CS/883/2023, was brought before the Federal High Court in Abuja.

Goya Foods, a prominent producer and distributor of foods and beverages across the United States, Spanish-speaking countries, and Nigeria, seeks to enforce a longstanding consent judgment issued by the court in December 2006.

The judgment directed the Registrar to rectify the Trademarks Register to reflect Goya Foods Incorporated as the rightful owner of the “Goya Olive Oil” trademark, without any further formalities.

The lawsuit, exclusively revealed to sources, underscores Goya Foods’ determination to safeguard its intellectual property against alleged infringements.

According to court documents, Goya Foods obtained the consent judgment against Chikason Industries Limited, which was accused of marketing “Goya Olive Oil” in Nigeria, thus infringing on Goya Foods’ registered trademark.

Legal counsel for Goya Foods, Ade Adedeji, SAN, emphasized the necessity of rectifying the Trademarks Register to protect their trademark interests effectively.

Despite appeals to the Registrar, the requested rectification has not been implemented, prompting Goya Foods to escalate the matter through legal channels.

The case has been adjourned to September 27, 2024, for further proceedings, highlighting the complexity and significance of trademark disputes in the global marketplace.

Goya Foods remains committed to upholding its brand integrity and securing its proprietary interests amidst the evolving landscape of international trademark law.

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IOCs Accused of Blocking Direct Crude Sales to Dangote Refinery

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Dangote Refinery

Dangote Industries Limited (DIL) has accused International Oil Companies (IOCs) of obstructing direct crude oil sales to its refinery and forcing the company to use costly middlemen.

This development comes after a statement by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) suggested a “willing buyer-willing seller” dynamic was in place as mandated by the Petroleum Industry Act (PIA).

Devakumar Edwin, Vice President of DIL, countered NUPRC CEO Gbenga Komolafe’s claims, stating that IOCs consistently make it difficult for local refiners by pushing sales through international trading arms, which inflate prices and bypass Nigerian laws.

“These middlemen earn unjustified margins on crude produced and consumed within Nigeria,” Edwin stated.

He noted that only one local producer, Sapetro, has sold directly to DIL, while others insist on using trading arms abroad.

Edwin detailed the financial impact, citing instances where DIL was charged a $2-$4 premium per barrel above the official price.

In April, DIL paid $96.23 per barrel for Bonga crude, which included significant premiums, compared to a much lower premium for West Texas Intermediate (WTI) crude.

While acknowledging NUPRC’s support in resolving some supply issues, Edwin urged the regulatory body to revisit pricing policies to ensure fair market practices.

“Market liquidity is essential for fair pricing. We hope NUPRC addresses these issues to prevent price gouging,” he stated.

This dispute highlights ongoing challenges in Nigeria’s oil sector, where domestic refiners struggle to secure local crude amidst complex market dynamics.

The outcome of these negotiations could significantly impact the refinery’s operations and broader industry practices.

The situation underscores the need for transparent and efficient crude supply systems to bolster Nigeria’s refining capacity and economic growth.

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Dangote’s $20 Billion Refinery to Begin Petrol Sales Next Month

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Petrol - Investors King

Aliko Dangote announced on Monday that his long-awaited $20 billion refinery complex will commence petrol sales starting next month.

The announcement came during a press briefing held at the refinery site in Lagos, where Aliko Dangote, Africa’s richest man, detailed the project’s progress and future plans.

“We are proud to announce that the Dangote Refinery will begin selling petrol from August,” Dangote stated confidently.

“This milestone marks the culmination of years of meticulous planning, construction, and overcoming numerous challenges.”

Dangote’s refinery, touted as the largest single-train refinery in the world, is designed to process 650,000 barrels of crude oil per day once fully operational.

The facility aims to not only meet Nigeria’s domestic demand for refined petroleum products but also contribute significantly to export markets across West Africa.

“We have entered the steady-state production phase earlier this year, and now we are ready to begin commercial sales,” Dangote explained. “Initially, we will focus on petrol production, with plans to expand our product range as we ramp up to full capacity.”

The refinery’s launch is expected to alleviate Nigeria’s longstanding dependence on imported refined products, thereby boosting the country’s energy security and reducing foreign exchange outflows associated with fuel imports.

Beyond petrol sales, Dangote revealed ambitious plans to list both the refinery and its associated fertilizer plant on the Nigerian Exchange Group (NGX) by the first quarter of 2025.

This move aims to attract broader investor participation and unlock additional value for shareholders.

“We are committed to transparency and accountability in our operations,” Dangote emphasized. “Listing these subsidiaries on the NGX will not only strengthen our corporate governance framework but also enhance the refinery’s financial sustainability.”

Challenges and Future Prospects

Despite celebrating the imminent commencement of petrol sales, Dangote acknowledged challenges encountered during the project’s execution, including delays in securing land for a petrochemical facility in Ogun State, which incurred substantial costs.

“We faced bureaucratic hurdles that resulted in significant delays and financial losses,” Dangote lamented. “Nevertheless, we remain steadfast in our commitment to advancing Nigeria’s industrial capabilities and contributing to economic growth.”

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