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FG settled $120M Debts with Gas Suppliers for Electricity from Oct ’23 to Jan ’24.



FG settled $120M Debts with Gas Suppliers for Electricity from Oct '23 to Jan '24.
Wema Bank Alat

FG settled $120M Debts with Gas Suppliers for Electricity from Oct ’23 to Jan ’24.




The industry’s advancements were emphasized by Ed Ubong, the former president of the Nigeria Gas Association (NGA) and Coordinating Director of Nigeria’s Decade of Gas Programme, at the Nigeria International Energy Summit (NIES) in Abuja. He stated that Nigeria’s gas production has stabilized and is back to its pre-2021 levels, suggesting a promising future for the industry. With more than 20 projects able to produce more than 4.6 billion cubic feet (BCF) per day, Ubong also underlined the potential for significant growth. With plans to increase production by 20% this year, he expressed confidence that the industry can double its current gas production by 2030.



Ubong acknowledged the government’s efforts in addressing the outstanding arrears to gas producers and sellers, amounting to approximately $1.3 billion as of last year. He noted that $120 million has already been paid towards reducing this debt, with ongoing efforts to develop a framework to settle the remaining arrears.



Bala Wunti, the Chief Upstream Investment Officer of the Nigerian National Petroleum Company Limited (NNPC), emphasized the importance of oil and gas in meeting the energy needs of heavy industries, stating that renewables alone may not be sufficient. He underscored the significance of oil and gas in Nigeria’s energy landscape and highlighted the country’s substantial gas reserves, both proven and unproven, which can help meet energy demands.



Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized the need for Nigeria to capitalize on its abundant resources to meet both local energy demands and drive revenue through exports. He highlighted the importance of developing the sector to align with global energy transition goals.



Akachukwu Nwokedi, the NGA President and General Counsel and Company Secretary of Nigeria LNG, raised concerns about the impact of large debts on investor confidence in greenfield investments and critical infrastructure projects in the industry.



Overall, the discussions at the summit underscored the progress made in the gas-to-power sector in Nigeria, the challenges that still need to be addressed, and the potential for growth and development in the industry with the right strategies and investments in place.



“Africa’s real gross domestic product (GDP) is expected to nearly triple from $2.7 trillion in 2021 to $7.1 trillion by 2050. This potential for growth relies heavily on energy to provide the necessary amenities in line with the United Nations Sustainable Development Goals.



“With most of those discoveries located in Sub-Saharan Africa, Africa remains a vital part of the global natural gas network, with the continent estimated to hold around 10 percent of worldwide proven reserves.



“For the situation analysis, to achieve the projected level of growth in the natural gas trade, a huge upstream investment of $9.7 trillion is required by 2050,” he added.



Meanwhile, the NNPC has called for deeper collaboration among upstream operators, especially independent producers, to find solutions to the challenges hindering the effective development of divested assets in the nation’s oil and gas industry.



The company’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, made the call at a panel session at the ongoing 2024 NIES, held in Abuja.



Speaking on the theme “Innovation, Collaboration, and Resilience: Empowering Independent Producers in the Dynamic Energy Era,”  Eyesan stated that past experiences with divestments and how the assets were operated have left much to be desired, as most of them experienced a drop in production rather than growth.



“In the industry, if you want to measure success, there are some basic indicators that you use: production growth, reserve growth, and asset integrity. If I were to evaluate prior investment initiatives and scale the actors using these indices, I would be untrue to myself if I said everybody had done well.



“Yes, we acquired the assets; but today, we are worse off in terms of production than we were when we did the acquisition,”  the EVP lamented.



She, however, acknowledged that there were some success stories in the operations of the independent producers.



She identified some of the challenges as including insecurity, lack of finance, and lack of technological capacity, stressing that with collaboration among industry players, the challenges could be surmounted.


“Collaboration cannot be overemphasised. Somebody said we should be in a state of emergency, and I totally agree with that. It’s not by sitting here and talking about the challenges; I think we should have a war room where we raise the issues and set out concrete plans to resolve them rather than wait for stakeholders individually to take them on,” she added.

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