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Economy

Domestic Gas Market in Focus as Shortage Lingers

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  • Domestic Gas Market in Focus as Shortage Lingers

Nigeria is home to the largest natural gas reserves in Africa and the ninth largest in the world but it has continued to suffer supply shortage over the years.

According to the Nigerian National Petroleum Corporation, the country has around 202 trillion cubic feet of proven gas reserves plus about 600 Tcf unproven gas reserves.

However, despite having the largest gas reserves in Africa, only about 25 per cent of the reserves is being produced or is under development today.

Out of the total gas supply of 2.83 trillion standard cubic feet last year, only 430.2 billion scf was commercialised for the domestic market while 1.23 trillion scf was exported, according to the NNPC.

The NNPC data showed that re-injection, fuel gas and flaring accounted for a total of 1.17 trillion scf.

Oil and gas firms operating in the country flared a total of 282.08 billion standard cubic feet of natural gas in 2018, compared to 287.59 billion scf in 2017.

The Chief Operating Officer, Upstream, NNPC, Mr Bello Rabiu, at the Nigeria Oil and Gas Opportunity Fair in Yenagoa, Bayelsa State last week, stressed the need to concentrate more on the huge gas resources in the country to stimulate economic development.

He said, “Nigeria’s average daily gas production is about 8.4 billion standard cubic feet per day. Only 18 per cent (1.5 billion scf pd) of the production is consumed in the domestic market; 43 per cent is exported as Liquefied Natural Gas, 32 per cent is re-injected for enhanced oil recovery and other operational uses like fuel gas while seven per cent of total gas production is currently being flared.”

He said to encourage the existing players in the industry, particularly the traditional joint venture partners, the NNPC undertook to settle all outstanding cash call arrears, amounting to $5bn.

Rabiu said the settlement of the cash call arrears had restored confidence in the industry, adding, “In the last three years, we have been very active in the investment market, securing about $3.7bn in new investment.”

Royal Dutch Shell, in its Nigeria Briefing Notes, said unlocking Nigeria’s natural gas potential would require partnerships between the Nigerian government and oil and gas companies “that have the ability to innovate, capacity to deliver major projects, and willingness to take on long-term commitments.”

According to the oil major, there are several challenges that need to be overcome in order to successfully develop growth projects for the domestic gas market.

It noted that a new funding regime for joint venture oil and gas operations in Nigeria had been operationalised, which was expected to resolve the NNPC’s funding constraints in the Shell Petroleum Development Company JV.

“This will increase gas production by optimising existing operations as well as accelerating the completion of new gas development projects,” it added.

According to Shell, a second challenge is to clear the backlog of deliveries of both power and gas to customers that have not been paid for.

It said, “Without the payment of outstanding gas and power invoice arrears, and securitisation of current and future revenues, operators are reluctant to commit additional investments to grow domestic gas supply.

“Another challenge deals with the need to attract investment to further develop infrastructure along the gas value chain, for example, to create a more robust pipeline network to improve reliability and security of supply.”

The oil major also said ensuring a conducive business environment was essential to attracting investments and running reliable operations.

It said, “This includes a respect for the sanctity of existing contracts, predictable regulatory, commercial and legal framework across the country.

“Overcoming security challenges in the Niger Delta that has experienced an increased risk to personnel and property as well as the disruption to operations is also very important.”

The Federal Government has said the Nigerian Gas Flare Commercialisation Programme is expected to unlock and supply 600,000 metric tonnes of liquefied petroleum gas to about six million homes in Nigeria.

President Muhammadu Buhari inaugurated the NGFCP in October 2016 and the programme is aimed at reducing gas flaring by harnessing flare gas to stimulate economic growth, drive investments and provide jobs in the Niger Delta through the utilisation of widely available innovative technologies.

The NGFCP was designed as the strategy to implement the policy objectives of the government for the elimination of gas flares from Nigeria’s oil and gas fields in the near term of between two and three years, with potentially enormous multiplier and development outcomes for Nigeria.

In December 2017, the Federal Government announced that it had commenced the verification of gas flare sites across the country and that it had discovered that there were at least 178 sites where gas was flared, as opposed to 140 sites listed in the past.

The Programme Manager, NGFCP, FMPR, Justice Derefaka, said the programme would attract $3.5bn worth of investments into the country.

He said, “It has been proven that global energy demand will nearly double by 2050. Most of the increase will come from the world’s emerging economies as a result of population growth and improved standards of living.

“The NGFCP will play an important role in meeting this energy challenge by harnessing Nigeria’s flare gas for sustainable value and wealth creation.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

The Kenya Private Sector Alliance (KEPSA) and The Canada-Africa Chamber of Business Announce Major Memorandum of Understanding (MoU)

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The Kenya Private Sector Alliance and The Canada-Africa Chamber of Business are proud to announce collaboration to promote, support and facilitate bilateral trade and investment opportunities from Canada into Kenya.

The first engagement will be a virtual trade mission to Kenya from Canada in May.

The 3-year agreement MoU was signed today during the Second Session of the Binational Commission meeting between the Governments of Kenya and Canada – and is subject to ongoing renewal.

“This MoU will solidify the existing trade relations between Kenya and Canada and establish strong bonds between the two countries that will go a long way to boost private sector trade and investment. The MOU will also enable us to exchange business information with CACB which is critical especially to our members who wish to expand their coverage to international market,” explained Ms. Carole Kariuki Karuga, KEPSA CEO.

The Kenya Private Sector Alliance is the apex body of private sector in Kenya.

The Canada-Africa Chamber of Business is a 27-years old organization committed to accelerating trade, business and investment between Canada and Africa.

‘Nairobi is a vital gateway not just to Kenya and the region, but the continent’s economies of the future in Africa,’ noted Garreth Bloor, President of The Canada-Africa Chamber of Business.

‘KEPSA is world leader in the private sector, showcasing excellence on the global stage. This MoU is a great honour for The Canada-Africa Chamber of Business, our leadership, and all our members across Canada,’ says Deepak Dave, the organization’s long-standing representative in Nairobi and Chief Risk Officer at the African Trade Insurance Agency.

‘The joint intended results of the co-operation agreement between CACB and KEPSA seeks to increase two-way trade and investment between Canada and Kenya in all sectors – while laying the foundations to explore trade missions to Kenya by The Canada-Africa Chamber of Business and to Canada by KEPSA,’ said Sebastian Spio-Garbrah, Chair of The Canada-Africa Chamber of Business.

Guided by this MOU, CACB and KEPSA will work together towards on a case-by-case basis exploring events together, exchange of business information and reciprocity members of the Kenya Private Sector Alliance to enjoy the privileges of membership afforded to CACB members, and to ensure KEPSA members are well-positioned in the Canadian market for investment and trade in all sectors and that CACB members are well-positioned in the Kenyan market for investment and trade in all sectors.

“As KEPSA, we remain committed to establishing progressive business and trade partnerships with Canada and other similar minded parties for a mutual benefit of our members as well as those of our CACB counterparts,” said Ms. Carole Kariuki Karuga, KEPSA CEO.

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Economy

India, Spain, the Netherlands, USA, Nigeria’s Major Export Markets -NBS

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India, Spain and the Netherland top Nigeria’s export markets in the final quarter of 2020, according to the latest data from the National Bureau of Statistics (NBS).

The Commodity Price Indices and Terms of Trade Q4 2020 report showed that the United States and China trailed the three.

However, the NBS revealed Nigeria exports mainly crude oil and natural gas during the period under review.

It, “The major export and import market of Nigeria in Q4 2020 were India, Spain, the Netherlands, United States and China.

“The major export to these countries were crude petroleum and natural gas. The major imports from the countries were motor spirits, used vehicles, motorcycles and antibiotics.”

The bureau stated that the all-commodity group import index increased by 0.13 per cent between October and December 2020.

This was driven mainly by an increase in the prices of base metals and articles of base metals (one per cent), boilers, machinery and appliances; parts thereof (1.03 per cent), and products of the chemical and allied industries (0.75 per cent),” it stated.

The NBS, however, noted that the index was negatively affected by animal and vegetable fats and oils and other cleavage products.

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Onyeama: Qatar To Invest $5bn In Nigeria’s Economy

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The oil-rich state of Qatar is to invest a total of $5 billion in Nigeria’s economy, the Foreign Affairs Minister, Godfrey Onyeama, has disclosed.

Onyeama, who spoke Sunday at a send forth dinner in honour of Nigeria’s Ambassador-designate to the State of Qatar, who is also the outgoing Director of Protocol (DOP) at the State House, Ambassador Yakubu Ahmed, also stated that recent career ambassadorial appointments made by the gederal government was based on merit, experience and professionalism.

The minister further said there had been discussions with Qatar on partnership with Nigeria’s Sovereign Wealth Fund (SWF), for significant investments in the region of $5 billion in the Nigerian economy.

According to him, ‘‘Qatar is a weighty and strategic country and very strategic in that part of the world and we are putting our best feet forward to advance the interest of our country economically and in other areas.”

He recalled that President Muhammadu Buhari had visited the State of Qatar in 2016 and the Emir of Qatar, Tamim Bin Hammad Al-Thani, reciprocated with a State visit in 2019.

Onyeama also explained that only trusted hands with a track record of diligence, experience and professionalism in the Foreign Service were recently appointed career ambassadors by the federal government.

The minister said the appointment of Ahmed and other career ambassadors were predicated on posting dedicated and keen Foreign Service practitioners to serve as image makers of the country.

He said: ‘‘Ambassador Yakubu Ahmed is a dedicated professional with a penchant for rigour and detail. He is very capable and one of the best in the Ministry of Foreign Affairs. He is personable, affable, extremely friendly, dispassionate and objective.

‘‘He is going to head a very important mission, a very important country, reckoned to be one of the richest countries in the world, per capita, and there’s a lot we will be doing with the State of Qatar.”

Also speaking, the Deputy Chief of Staff, Adeola Rahman Ipaye, described the honoree as a ‘‘perfect gentleman, very even-natured and always well turned out’’.

Ipaye said he had no doubt that the newly appointed ambassador would serve the country well in Qatar, adding that: ‘‘We are further encouraged that when he completes this assignment, he would return to serve Nigeria in a higher capacity.’’

In his remarks, the Permanent Secretary, State House, Tijjani Umar, while congratulating the outgoing DOP on his appointment, lauded Ahmed for excellent service to the State House and the nation.

‘‘He served this institution and the nation with the deepest sense of responsibility and it is very important that we establish a tradition where the system appreciates those who have served it well and those who will continue to serve it well,’’ he said.

Umar urged the new envoy to keep very fond memories of his time at the Presidential Villa, assuring him of the prayers and goodwill of all the staff.

Responding, Ahmed thanked President Buhari for the great honour and privilege of making him his principal representative in Doha, Qatar.

The Ambassador-designate pledged to deplore his energy and skill to the promotion of the existing cordial relationship between Nigeria and Qatar, particularly in the areas of economic, political, cultural and consular affairs as well as other key areas.

Ahmed, who joined Nigeria’s Foreign Service in 1993, said during his years in public service he had learnt that ‘‘patriotism, selfless service, diligence, determination and perseverance will always result in the achievement of the desired objective’’.

According to him, these virtues would be his ‘‘watchword’’ in the pursuit of Nigeria’s foreign policy objectives and the attainment of national interests.

The Ambassador-designate singled out for appreciation the Chief of Staff to the President, Prof. Ibrahim Gambari, and the state Chief of Protocol, Ambassador Lawal Kazaure, saying he had learnt a lot working under their mentorship.

He expressed gratitude to the Minister of Foreign Affairs and the Permanent Secretary, State House for giving him the opportunity of a memorable work experience in the State House.

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