Neconde Seeks Liberalisation of Gas Prices to Attract Investment

Emmanuel Addeh in Abuja

Indigenous oil and gas company, Neconde Energy Limited, has urged the federal government to remove the cap on gas pricing in the country to attract more local and foreign investment into the sector.

In an interview on the sidelines of the Nigeria Oil and Gas (NOG) Week in Abuja, the company’s acting Managing Director as well as Gas Asset Manager, Chichi Emenike, noted that aside from distorted gas pricing, the federal government also needs to ramp up its ‘Ease of Doing Business” efforts.

While the government is still trying to figure out how it will attract financing on its side, she noted that most of the current funding in the sector has been coming from the private sector, explaining that the investing firms do not have free money to waste.

On ease of doing business, Emenike mentioned operational bottlenecks that need to be resolved if Nigeria is serious about attracting investment, with various rents and fees exceeding 500 in number currently.

Lamenting the proliferation of agencies in the sector, the Neconde acting chief executive further stated that there’s multiplicity of fees which must be paid in dollars, describing them as stifling.

“Sometimes it gets very stifling and  if you are not careful as a business person, you can get discouraged. But I must commend the current administration. Things are beginning to be a bit different, especially with some of the changes that have been made.

“There are initiatives that the president has announced, some of the changes that have been made at the Nigerian National Petroleum Company Limited (NNPC) top. But you know these things must trickle down, if truth be told. There are ways we need to sit down and look at the speed of doing things,” she added

Stressing that Nigeria has not scratched the surface of both its oil and gas resources, she argued that the country has to be intentional about its development by doing what is right.

On gas pricing, she stated: “There is what we call a willing buyer, willing seller situation. Someone borrows money, you don’t know how he got the money, he went through trouble to get it. You don’t come and put a ceiling and say you are going to sell at this amount or this is what you will sell. So that means I have to start working the mathematics.   Some things will suffer in the business,” she argued.

Maintaining that the gas business doesn’t have the kind of room that crude oil has, she lamented that the Petroleum Industry Act (PIA) still prescribes a ceilidh for the pricing of gas in the country.

“But the pricing, the PIA still has a hand in pricing. So we are saying, release that price, allow people to do their business and bring in this gas and do upstream development. For all the resources we have, most of it is still in the ground. Today, officially, we stand at 210 TCF. That needle hasn’t shifted in a long time,” she stated.

Speaking on Neconde as a company, she stated that the firm’s asset is the heart of the Niger Delta and spans approximately 814 square kilometres.

“We are averaging in the region of 50,000 barrels per day or thereabouts. And, I mean, we started out with smaller volumes of about 10,000 barrels per day. In recent times, there were some few operational efficiencies, things that we’ve done better, including replacement of some of the pipelines that we have,” Emenike who earlier spoke on a panel stated.