Nigeria not a good destination for investment – Gas suppliers

– Stakeholders in Nigeria’s oil and gas industry have passed a verdict on Nigeria

– According to them, Nigeria is no longer a good destination for investment in the sector

– This is as a result of the the slash in domestic gas supply by more than half due to the Niger Delta crisis

Speaking at a special session of the 2016 conference organised by energy reporters in Lagos recently, Nigeria’s major gas suppliers passed a verdict on Nigeria as an investment destination, Thisday reports.

They declared that with the renewed attacks on oil and gas infrastructure in the Niger Delta, Nigeria’s operating environment has become a high-risk environment that is not suitable for investment.

Speaking at the conference, the Chief Executive Officer of Frontier Oil, suppliers of gas to Calabar, Alaoji and Ibom power stations, Mr Dada Thomas said the only solution to the Niger Delta crisis was good governance, which he said was lacking in Nigeria.

Thomas, whose company’s gas supply to the domestic market accounts for 450 megawatts of power generation, advocated for both the use of the full weight of law and the involvement of the political leadership of the oil-rich region in resolving the crisis in the Niger Delta.

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His words: “A high-risk environment like Nigeria is not a destination for investment. We are not a fantastic investment destination.

“Good governance is the only answer to vandalism but this is lacking in Nigeria since independence. The short-term solution is to apply the full weight of law.

“When you reward criminality, you create more criminality. But the government should also get the political leadership involved in the negotiating table.” 

Also speaking at the conference, the chairman of Geometric Power Limited and a former Minister of Power, Professor Bart Nnaji said Nigeria must secure gas infrastructure to guarantee electricity supply.

“Gas-to-power is critical for electricity generation. Brazil generates 100,000 megawatts. If Brazil has 100,000 megawatts and we aspire to be like Brazil by 2020, then a lot has to be done on gas-to-power,” Nnaji said.

The group managing director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru who was represented by the managing director of National Engineering and Technical Company Limited (NETCO), a subsidiary of the corporation, Mr Siky Aliyu told participants at the conference that militant attacks have curbed gas supply to the domestic market by more than a half.

According to him, the current supply of about 700 million standard cubic feet per day is less than the domestic supply before the militants first bombed the gas infrastructure in February this year.

A recent report in the media indicates that Nigeria has lost over N1.1 trillion in oil revenues since the resurgence of militancy in the oil-rich Niger Delta region.

The report stated oil installations in the region has been attacked 28 times between February 10, 2016 and end of last month by the rampaging militants.

This figure does not include losses in gas revenues resulting from disruptions in gas supplies to domestic power and industrial plants as well as export markets.

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Nigeria is currently struggling to maintain its crude oil production following a spate of militant attacks. Militant group, Niger Delta Avengers continue to disrupt oil production which in turn, affects the Nigerian economy.

Nigeria is largely dependent on proceeds from oil to fund the budget but the resurgence of militancy in the Niger Delta region has affected the country’s finances.

The 2016 budget is based on daily crude production of 2.2 million barrels per day but the attacks pushed output down by about a third between April and August 29.

Meanwhile, renowned economist and businessman, Mr Atedo Peterside has predicted that the recession currently experienced in Nigeria will last for a long time.

Peterside who is also the President & Founder of Anap Foundation said business confidence is low and investors are holding back on investing in Nigeria.

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