Petroleum Explorationists Advocate Fiscal Incentives to Boost Investments in Frontier Hydrocarbon Basins

•Want gas output raised to 8bcf to catalyse electricity generation for 90m people

Peter Uzoho and Oluchi Chibuzo

Ahead of its upcoming golden jubilee celebration, the Nigerian Association of Petroleum Explorationists (NAPE) has urged the federal government to introduce more fiscal and regulatory policies aimed at attracting new investments for oil and gas exploration and production in the old Niger Delta and frontier Basins of the country.

The association also stressed the need for the country to urgently revive its aging gas pipelines and distribution networks and raise gas productuon to eight billion cubic feet per day (8bcf/d) to enable Nigeria generate electricity 90 million people currently without power.

Speaking at press conference in Lagos, yesterday, President of NAPE, Mr. Johnbosco Uche, said growing Nigeria’s gas reserves should become a national imperative for energy sustainability and security.

With 50 percent of the country’s gas reserve being non-associated gas (NAG), he said the production must grow substantially to meet national aspiration of discovering the remaining 600 trillion cubic feet (tcf) still unproven.

Uche, maintained that growing Nigeria’s gas reserves had become a national imperative, hence expanding into frontier basins and exploring older rock sequences in the Niger Delta would be critical in unlocking this potential and achieving sustainable energy security with a cleaner fuel alternative.

He said Nigeria ranks number nine in the world in terms of gas reserve but not in the top 10 in terms of production, pointing out that that shows gaps that needed to be closed.

Responding to why the country has not been able to overcome its power issues, Uche expressed the need to review the value chain of gas transmission in the country.

“And where the issue is, is not necessarily the subsurface, it is the above-ground issues. And those above-ground issues start from infrastructure; some of the pipelines that we have are aging pipelines that need to be replaced, either sectional replacement or full replacement.

“The network of that gas distribution and the insecurity issues we have in the Niger Delta, which by the way, is improving, are also some of the challenges. And that’s why, for example, today, we do know that NLNG is not operating at full capacity because of the challenges of getting the gas from our subsurface underground to the destination. So it’s not about having the gas and it’s about how you evacuate it, and then the above-ground risks,” Uche explained.

He noted that the country was blessed with over 200tcf of proven and 600tcf unproven gas deposits which remain an opportunity that the nation can leverage to provide electricity to its citizens.

He further explained, “If you multiply how much amount of gas we need, today, we think that to serve these 90 million Nigerians that don’t have electricity, we need to generate or to be having about 30,000 to 40,000 megawatts of electricity.

“Today, we are doing under 5,000MW. So if we are doing under 5,000MW, if you have to take it to 40,000MW, if you do the mathematics, it takes about 200 million scf of gas to generate 1000MW of electricity.

“So when you do the mathematics, what you will find out is that we need at least 8bcf of gas per day,” Uche said.

“The challenge they have is the value chain issue. The Gencos (generation companies) need to get the gas at the right time that they need it. And if you don’t have the right infrastructure, they can’t get the gas.

“So they can only get the gas that is available and then when they even get the gas; it’s also the ability to transmit it to the distributing companies (Discos.

“So there’s also an issue in the transmission, right? Because one is to generate the gas, but when you generate that power, are you able to transmit?

“So most times those powers or energy are generated, but we’re not able to transmit them.

“And if you do the mathematics, then that will tell you that indeed, we have enough gas resources that are yet to be discovered, but the question is, do we have the capacity to transmit that gas to the Gencos?”

He recalled that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently confirmed Nigeria’s crude oil and condensate reserves at 37.28 billion barrels and gas reserves at 210.54tcf.