Tackle oil theft, gas supply debt payment — IOCs to President-elect, Tinubu
…Lament 40% drop in gas for NLNG
By Ibiyemi Mathew
The International Oil companies (IOCs) in Nigeria have tasked the incoming administration of President-elect, Bola Ahmed Tinubu to tackle oil theft and settle debts owed by the government to encourage investment in the energy sector.
This was revealed at the Nigeria International Energy Summit (NIES) holding in Abuja.
Speaking at the CEOs panel at the Summit in Abuja, the panelists noted that constant attacks on pipelines have reduced oil and gas production to 60 per cent capacity in the past few years.
They tasked the new administration to ensure that investors such as gas suppliers to the power sector are paid for their investments in the sector.
The Chairman of Shell Companies in Nigeria, Mr Osagie Okunbor lamented that the government is still owing the company $200 million for gas supplied to the power sector.
While calling for the implementation of laws and policies governing the sector, he noted that the country is not short of frameworks and written documentation.
“What keeps me awake today is the story of my onshore business in Shell, is the fact that I simply cannot operate the pipelines. That’s what is responsible for the 60 per cent capacity.
“It aligns with how much gas we can supply because one of the key gas infrastructures, the Trans Niger Pipeline (TNP) is shut down for one year, from March to March. We removed 460 illegal connections from that line. We just reopened that line. We have lifted force majeure on Bonny and today we are struggling to catch up with our repairs programme.
“We think of this in terms of meeting up with our OPEC quota but an equally devastating implication is that we cannot supply the gas required to Nigeria LNG.
“So, if you ask me what the number one issue for the incoming administration is, it has to be the security of our oil and gas infrastructure. I think it is so existential to us that if we don’t fix it, we have a huge problem on our hands,” he added.
The Executive Director, Deepwater, ExxonMobil Nigeria who represented the Chairman/MD of ExxonMobil Nigeria Mr Oladotun Isiaka tasked the incoming administration to work on improving the ease of doing business for operators in rhe country.
The Managing Director, Nigeria NLNG, Dr Phillip Mshelbila explained that due to challenges in the sector, the company operated at 60 per cent capacity utilisation, urging the in-coming government to take urgent actions to improve the business environment in the industry.
Mshelbila noted that fixing the electricity supply sector must be a priority for the new administration as it remains the core of every energy effort.
He said, “The starting point is that we have the resources underground and the second point is we have the demand. They are starved of energy yet live directly above the reservoirs. It is really about that connection. How do we connect the two in a sustainable manner? And that has been our biggest challenge.”
“For example, we are a global business, six trains. In 2022, we operated roughly about 62 per cent, why? Because we couldn’t get that connection to work. Coming into the domestic market, roughly 4 Gigawatts of electricity for a population of 200 million people.”
“So while the Petroleum Industry Act (PIA) has done a great job, there are many things that remain to be dealt with. How do you make the gas-to-power sector work? For me, whatever we want to discuss energy for Nigerians in Nigeria if we don’t fix that value chain, you can pass 10 PIAs and all the other acts in the world it is not going to solve that problem.”
“How do you ensure that the person investing upstream in gas development, the person who is transporting it, the person who is building the power plant, the transmission and distribution systems, can all get paid at the end of the day?”.
He noted that the priority given to these issues by the next government would determine the success of failure or failure of whatever energy policy that they have going forward.
Addressing Nigeria’s readiness for the energy transition, Mr Austin Avuru, the Executive Chairman, AA Holdings stated that by 2025 the transition which I’d being spoken of will be hinged on independence and it will not be Nigeria’s making.
“It is happening and we are not paying attention to it. We are handling the transition by pointing to the one or two independent operators that are not doing so well to shrug it off.”
“The kind of support for independence that Nigeria should be showing in managing this energy transition we are not seeing it but we need it.”
“Domestic energy security will come from this independence we are waving away and it will come from the onshore and the Deep waters.”
“The LPG we are speaking about, we may not need the Nigeria LNG terminal 7 once the Seplat project is completed.”
“So, it is actually a national duty to come up with a programme of support to groom the capacity that this independent operators need. We need the support of the government to support the independent operators to serve this nation and this industry.” Austin declared.
