Minister of Petroleum, Dizeani Allison Madueke
Approval of the newly-drafted Petroleum Industry Bill (PIB) by the Federal Government and hope of its speedy passage by the National Assembly have rekindled investors’ confidence in the Nigerian Oil and Gas sector, a source at the Petroleum Ministry told THISDAY at the weekend.
Activities in the sector have been at very low ebb since 2009 due to delay in the PIB passage. Former Chairman, Senate Committee (Upstream), Lee Maeba disclosed last year that the industry had lost in excess of $28 billion in investments.
Most of these investments, he said had found their way into neighbouring countries including Angola, Ghana and Burkina Faso, which have more stable policies.
But the source hinted that potential investors from China, Korea and Russia have started approaching the Nigerian National Petroleum Corporation (NNPC) for discussions on possible investments in the petroleum sector.
THISDAY gathered that more companies are indicating interest to invest on various gas projects, while others that suspended their proposed investments, due to uncertainties in the oil reforms bill are seeking to renew interests on such projects.
The delay in the passage of the PIB had stalled the proposed $2.5 billion investment in Nigeria’s oil and gas sector by Gazprom, Russian gas giant and world’s largest gas producer.
The Memorandum of Understanding (MoU), which the gas giant signed with the NNPC in September 2008, covered petroleum, gas exploration and power. However, more than four years after, Gazprom is yet to make any commitment regarding those projects, scheduled to come on stream in 2015, due to the uncertainties in the reforms bill.
Gazprom Chief Executive Officer, Vladimir Ilyanin, had in 2010 blamed the delay in the take-off of the project, originally aimed to provide gas for power generation on the non-passage of the PIB. He said: “The delay in passing the bill is a major impediment. We need clear rules and a level-playing ground”, said Ilyanin.
Nigeria’s proven gas reserve is 187 Trillion Cubic Feet, with about 600(tcf) Trillion Cubic Feet additional in undiscovered gas potential. Nigeria is currently the world’s seventh largest in terms of proven gas reserves, but with the estimated undiscovered potential, could easily be within the world’s top three in gas reserves.
French oil giant. Total and Royal Dutch Shell were among the foreign oil companies that have shown interest in tapping into Nigeria's gas reserves.
Foreign investors are keen to exploit Nigeria's gas potential but are looking for more details on how they can balance the government's priority of developing its domestic infrastructure with their ambition of generating export revenue