Page 4 - AfrOil Week 03 2021

AfrOil COMMENTARY AfrOil

(Image: NBET)
(Image: NBET)
Assessing Nigeria’s “Year of Gas”

The West African state’s grand plans were disrupted but not derailed by the pandemic

WITH respect to hydrocarbon production, and associated gas, at 180 trillion cubic feet (5.1
Nigeria has historically put far more emphasis trillion cubic metres), are the ninth largest in
WHAT: on crude oil than on natural gas. But in recent the world. Additionally, they stem from expec-
Nigeria has been trying years, the West African state has tried to shift tations that additional resources will be discov-
to devote more attention focus. ered as upstream operators explore new acreage
to the development of its This change has already had concrete conse- in the deepwater sections of the country’s off-
ample gas reserves. quences. For example, it has led the government shore zone.
to promote domestic gas consumption in the Even so, the path to success is sure to be
WHY: business and residential sectors. (It has also led rocky.
The COVID-19 outbreak Abuja to take steps to reduce the flaring of asso-
undermined assumptions
about production, con- ciated gas in order to support these programmes Unfortunate timing
sumption and investment, by making new sources of supply available.) For one thing, Nigeria’s “Year of Gas” also
while leaving policy ques- Government officials have also spoken happened to overlap with the advent of the
tions unanswered. openly about the push to encourage the use of coronavirus (COVID-19) pandemic. This was
gas. For example, Timipre Sylva, Minister of unfortunate, in that the pandemic led govern-
WHAT NEXT: State for Petroleum Resources, dubbed 2020 the ments around the world to adopt lockdowns and
Abuja’s focus on using “Year of Gas,” saying that the time had come to other restrictions for the sake of public health,
gas to build up domestic emphasise gas development and consumption. and those restrictions led, in turn, to a decline in
demand is a positive sign. Likewise, industry executives have also high- global demand for energy.
lighted the potential of gas, with Tony Attah, the The pace of this decline was swiftest in the
head of the Nigeria LNG (NLNG) consortium, spring of last year – right around the time crude
describing his country as “a gas nation with oil prices crashed because Russia and Saudi
some oil” rather than an oil producer that also Arabia allowed the OPEC+ agreement to lapse
has some gas. and entered into a war for market share. Mean-
Statements along these lines are not just while, these supply increases and price crashes
public relations ploys. They are grounded in occurred at a time when global storage capacity
the fact that Nigeria’s known reserves of natural was scarce because of low energy demand.

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