Early in the year the Honorable Minister of State for Petroleum Resources, H.E. Chief Timipre Sylva, outlined five areas that he deemed critical to the success of the O&G sector in 2020 with gas playing a pivotal role. In conjunction with the Department of Petroleum Resources the Minister has wasted no time getting to work and formally inaugurated a new National Gas Transportation Network Code at an oil conference in Nigeria this week. Similarly, to other codes around the world, the new directive aims to ensure the consistency of gas flowing in the pipeline by maintaining its integrity and avoiding corrosion, as well as creating common standards for metering and third-party access. All of this should “stimulate the domestic gas supply market” and lead to the gas-industrialisation of the Nigerian economy. It is the type of common-sense approach and ’easy win’ the industry has been seeking and will encourage inward investment into the region’s gas pipelines.
The gas sector is already a major source of revenue and generates around N72.7 billion annually, but the news will be welcomed by an array of indigenous companies and international independents such as Savannah Petroleum, who are well placed to take advantage of renewed efforts to support smaller well managed players. If they can land access to better connected pipelines through the rights of third parties being guaranteed, it could unlock huge swathes of investment currently not being deployed due to the NGPTC’s monopoly on infrastructure.
Nigeria has some of the largest gas reserves in the world, but the sector remains largely undeveloped, with much of the gas currently flared despite huge reductions in the practice, or reinjected back into underground reservoirs.
It was also announced at the conference that Nigeria will pass the Petroleum Industry Bill by mid-2020. The minister discussed his growing optimism that both the Petroleum Industry Governance, Administration & Host Communities Bill and the Petroleum Industry Fiscal Bill will finally be passed. Strengthened by APC majorities in both chambers of the National Assembly this breakthrough could lead to much needed inward investment in the upstream Nigerian oil and gas sector.
The 10th Oil & Gas Council Africa Assembly, 23 – 24 June 2020, a permanent fixture in Paris for a decade where the Council will once again offer executives a chance to meet institutional investors, fund managers, buy-side analysts and other capital market actors who continue to remain bullish about the Africa hydrocarbon space. To find out more about the Africa Assembly please visit the website or download the brochure.