Akachukwu Nwokedi, the President of the Nigeria Gas Association (NGA), emphasized the crucial role of gas in driving Nigeria’s energy transition during a panel session at the 2023 annual international conference of the Association of Energy Correspondents of Nigeria in Lagos.
Nwokedi stressed that given the limited access to electricity for many Nigerians, gas must take the lead in the country’s efforts to transition towards cleaner energy sources. He underscored the significance of prioritizing the maximization of Nigeria’s abundant gas resources, especially considering its status as a gas-rich nation with relatively limited oil reserves, as the country targets achieving net zero emissions by 2060.
Nwokedi said, “Gas has to be the main driver of our energy transition.”
As stated by the President of the NGA, Nigeria faces significant challenges, including security issues, asset vandalism, and community unrest. However, it’s worth noting that the Petroleum Industry Act is actively working to address these concerns.
Nwokedi stated gas challenges concerns
He stated that the challenges of upholding the sanctity of contracts are another issue afflicting the industry and hindering potential investors. It is imperative that the government takes steps to establish Nigeria as an attractive investment destination, with a strong commitment to respecting contractual agreements and a robust fiscal and commercial framework. This approach is essential to unlock the full potential of the country’s gas industry.
He noted that while the Nigeria Upstream Petroleum Regulatory Commission has performed satisfactorily in terms of fiscal terms, there is a need for an improvement in its efforts. Currently, it falls short of fully realizing the immense potential of the gas industry.
He added that It is essential to unlock the supply side and establish a sustainable supply and demand equilibrium to drive the gas sector. Additionally, the energy transition presents a significant opportunity to tap into the substantial potential of the sector and propel it forward.
He emphasized that capital and investment funds gravitate towards locations that embrace them, and a stifled investment environment, coupled with stringent regulations and inadequate legal protection, can deter potential investors. As a government, the key policy objective should be to bolster and streamline the business environment to make it more attractive.
The impact of the PIA
Furthermore, he pointed out that the recent Memorandum of Understanding signed by the Nigerian Content Development and Monitoring Board, the Nigerian National Petroleum Company Limited, and the International Oil Companies (IOCs) to reduce project timelines is a positive and advantageous development for the industry.
The Petroleum Industry Act (PIA) introduces an appealing tax structure that is expected to bolster and attract investors.
Furthermore, Nwokedi emphasized the importance of optimizing the industry’s functionality for operators to unlock the nation’s full potential, all while ensuring favorable fiscal terms. Simultaneously, addressing the deficit and debt issues in the power sector remains a priority.
Regarding gas pricing terms, he stressed the importance of establishing a robust commercial framework to ensure the market’s efficiency, all the while comprehensively tackling the issue of insecurity.
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