Russia-Ukraine War: Nigeria Ready to Step in as Alternative Gas Supplier to Europe, Says Sylva

Russia-Ukraine War: Nigeria Ready to Step in as Alternative Gas Supplier to Europe, Says Sylva


*NEITI: Export of 85% of Nigeria’s solid minerals to China poses economic risk
Emmanuel Addeh in Abuja

Following the war between Russia and Ukraine, which is threatening the supply of gas to European countries by Russia, the Minister of State for Petroleum Resources, Mr Timipre Sylva, has revealed that Nigeria is ready to offer its services as an alternative gas supplier to Europe.
He urged the European Union (EU) to increase investments in gas and hydrocarbons in Nigeria to enable the country to meet the bloc’s energy needs.


This is coming as the Nigeria Extractive Industries Transparency Initiative (NEITI), has declared that the emergence of China as almost the sole destination for Nigeria’s solid minerals resources export poses a risk to the country’s economy.


NEITI advised the federal government to develop a business relationship with other countries to reduce over-dependence on China.
Sylva spoke when he received a delegation led by the EU Ambassador to Nigeria and ECOWAS, Samuela Isopi on a courtesy call to his office in Abuja.
The minister’s call comes on the heels of the festering war between Ukraine and Russia, which threatens gas supply to European countries.


Russia currently supplies about 30-40 per cent of the EU’s gas needs.
In a statement issued yesterday by his Senior Adviser – Media and Communications, Mr Horatius Egua, the minister said Nigeria was ready to step in as an alternative gas supplier to Europe, urging the EU to encourage its oil and gas companies such as Shell, Eni, and Total Energies to scale up investments in the Nigerian gas sector.
“One of the things we warned against earlier was the speed with which EU was taking away investments in fossil fuels.


“We warned that the speed was faster than they were developing renewable energy. You can see now that what we were warning against is what is happening now,” the minister said.
He told the delegation that what stunted growth in the development of gas in Nigeria was the lack of fresh investments, and called for a change of attitude on the part of the EU if its requests to increase supplies to Europe would be realised.


According to the minister, one of the biggest challenges the sector has is a lack of investments.
“In the last 10 years, over $70 billion worth of investments came to Africa, but sadly less than $4 billion came to Nigeria.
“Surprisingly, we are the biggest in Africa. If we cannot attract investments to Nigeria, you know where we are heading.


“You have been our longtime friend. As of today, our gas reserve is one of the biggest in the world. We have a proven gas reserve of 206 tcf and if we focus on gas exploitation we can get up to 600 tcf.
“We are already building gas infrastructure such as the Ajaokuta-Kaduna-Kano (AKK) pipeline project, expected to take gas to Algeria, and the West Africa Gas Pipeline project designed to take gas to Morocco,” Sylva explained.
The minister further said that after the Russia-Ukrainian war, the EU must have a buffer or an alternative source of gas, and collaboration with Nigeria in that regard was paramount.


He reiterated Nigeria’s commitment to working with the EU to bridge the gap in terms of gas, adding that from the Russian-Ukranian crisis, it was evident that gas had been weaponised and unless it created an alternative, it would only get worse.


He reassured the EU diplomats of Nigeria’s readiness to be an alternative supplier of gas to the EU but urged its companies operating in the country to invest more here.
“We would like to be reliable partners to solve the energy problem in Europe and we can only achieve this by working together. It is only when investing in these areas is increased that Nigeria can meet that obligation,” Sylva said.


While emphasising the need for the transfer of technology in gas and renewable energy, he said Africa must be allowed to continue to exploit its hydrocarbon deposits to develop the continent.
In her response, Isopi urged Nigeria to take advantage of the opportunity offered by the present crisis in Europe to shore up gas supplies to Europe.

NEITI: Export of 85% of Nigeria’s Solid Minerals to China Poses Economic Risk

Meanwhile, NEITI has declared that the emergence of China as almost the sole destination for Nigeria’s solid minerals resources export poses a risk to the country’s economy.
With at least 85 per cent of the country’s total export going to the Asian country, the NEITI’s audit report covering 2020, observed that Nigeria’s export line is prone to danger in the event of disruptions in relations between both countries.


Due to the dominance of the country, NEITI stated that for instance, Nigeria’s export fell from N124 billion to N17.53 billion between 2019 and 2020, as China began to shut down its industries in 2020 at the peak of the COVID-19-induced restrictions.


“This makes the country over-reliant on China for mineral export, putting the country at risk in the event of a breakdown in a business relationship and natural occurrences.
 “For instance, export in 2020 significantly declined by 86 per cent falling from N124.23 billion in 2019 to $17.53 billion in 2020 as a result of the covid-19 pandemic that affected economic activities and forced major minerals consumers or destinations such as China to reduce import drastically,” it stated.


NEITI advised the federal government to mitigate the risk of over-dependence on one country for its mineral exports by developing strong business relationships with other countries that may require the country’s solid minerals.
It advised the government to promote or support industrialisation and other policies that encourage local industries and local use of the minerals.


“This will reduce over-dependence on export for revenue or increased revenue from the sector.
“The major destination of Nigeria’s mineral export was China. The country accounted for 80 per cent and 85 per cent of the total export volume and value respectively during the year,” it added.
Out of the 102 companies covered by the audit, the initiative stressed that 96 complied well by providing most of the requested information and data representing 94.12 per cent.


In contrast, it said that six companies did not comply at all as they failed to provide any data. “The material revenue implication of their non-responsiveness was N54.2 million or 1.99 per cent,” it stated.
 The audit report noted that royalty receipts from some states – Nasarawa, Plateau and Enugu – was materially low, notwithstanding that the states are known to have large minerals deposits, including high-value minerals such as columbite, tin ore, lead/zinc, etc.


“The production of these high-value minerals is below expectation,” it added.
The report expressed concern that some of the minerals already identified by the federal government as strategic remained untapped and lacked serious investments.


While the quantity of lead produced in 2020 was 53,988.36 tonnes, the total export of mineral ores and concentrates was 8,776,199.50 tonnes during the period.
Similarly, 58 exploration licences were issued for iron ore, while the total number of valid mineral titles across the country during the year was 187.


“Nigeria has huge deposits of barite cutting across various states -Nasarawa, Plateau, Taraba, Adamawa, Benue, Ebonyi and Cross River – in commercial quantities.
“However, it was observed that companies still import these minerals. 147 barite titles have been issued but production level during the year under review did not reflect this,” it noted.


In addition, Dangote cement accounted for 31.95 per cent of total production and 24.5 per cent of total royalty payment in 2020 while Lafarge Plc was second and accounted for 17 per cent and 12 per cent of total production volume and royalty receipts, respectively.


The report disclosed that 38 different minerals were produced in Nigeria in 2020, with granite, limestone, sand and laterite having a combined contribution of 90 per cent and 87 per cent of total production volume and royalty receipts, respectively.
“The implication is that barite, coal and other precious minerals such as gold, have remained very low in terms of investments,” it stated.


To underscore the low level of activities in the solid minerals sector,  the report revealed that out of the 850 companies that were in operation during the year, only 102 met the materiality threshold of N3 million for the audit and accounted for 90 per cent of total royalty payments.
The report also noted that during the period under review (2020) there was no active state-owned enterprise operating in the sector.


The audit report disclosed that in the last five years, 7,605 mining titles were issued in the solid minerals sector. However, as of 31 December 2020, only 6009 were valid.
“A breakdown shows that 2,795 exploration licences, 123 mining leases, 1,082 small scale mining leases and 981 reconnaissance permits were issued. Out of the 7,605 mining titles issued in the sector in the past years, 1,482 of them were issued in 2020.


“During the period under review, there was no consolidation or revocation of licences. However, 26 licenses were transferred,” it stated.
It said that the revenue generated from the sector was below expectation due to the attitude of small scale miners towards filing their monthly production returns.


In addition, it pointed out that there was weak monitoring of mining activities due to insufficient or lack of manpower at the states’ mine offices, poor deployment of technology and security challenges.
 The report established that Nigeria has a huge bitumen deposit of about 42.74 billion metric tonnes that spreads across Lagos, Ogun, and Ondo, states with just 71,151,029.89 tonnes of the commodity valued at N3,106,582.236 produced in 2020.


During the period under review, there were 1,273 solid minerals operators within the six geographical zones of the country, with South-south having 146, South-east, 170; South-west, 182; North-east, 184; North-west, 236; and North-central, 355.


She appealed to Nigeria to step into that gap supply chain as an alternative to Russia, adding that the country must not allow the opportunity to pass it by.

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