Page 5 - AfrOil Week 26 2021

AfrOil COMMENTARY AfrOil

He pointed out that the country’s gas reserves the right to commercialise associated gas pro-
already stood at 206 trillion cubic feet (5.834 tril- duction, attracting bids from 800 organisations
lion cubic metres). Additionally, he noted, these and short-listing 200 potential investors, all by
reserves were found almost unintentionally, February 2020. It also stressed, though, that
while local and foreign companies were looking DPR had made no progress since then.
for oil instead.
“[This] 206 tcf reserve was found while look- Further delays?
ing for oil, so it was accidentally discovered,” The department was supposed to name the win-
Sylva remarked. “We were actually going to look ners of the first bidding round last June but did
for crude oil and we found gas, and in that pro- not do so, citing problems related to the pan-
cess of accidentally finding gas, we have found demic. “What is holding [up] the programme
up to 206 tcf.” is COVID-19,” explained Sarki Auwalu, DPR’s
This track record raises strong hopes about CEO. “Because [the bidders] need access to the
future exploration campaigns, which will be flare points ... They have to go and see [them]
more targeted, Sylva said. “[The] belief is that if physically.”
we really aim to look for gas dedicatedly, we will Auwalu said at the time that the government
find up to 600 tcf [17 tcm] of gas,” he stated. had pushed the end date in the bidding round
If Sylva’s prediction turns out to be true, back by six weeks and would take the next step at Abuja will need
the new discoveries would make Nigeria’s gas the appropriate time. So far, though, no further
reserves not only the largest on the African con- progress has been made. Just a few weeks ago, to convince
tinent but also the fifth-largest in the world. (The Auwalu acknowledged that Abuja had not gone
West African state is currently in ninth place.) beyond shortlisting the 200 companies. He did investors to
not reveal the factors underlying the additional stay and spend
Disappointing track record delays.
But size alone is not enough to draw investors. Presumably, the pandemic is one of the main vast amounts
Abuja will also need to take steps to convince reasons DPR has not yet been able to move
investors to stay and spend the vast amounts forward. The world economy at large and the of money on
of money that will be needed to transform this energy industry in particular are still recovering
country through gasification, gas-to-power and from the ravages of 2020, and the emergence of gas projects to
industrialisation initiatives. This is already a new variants of COVID-19 around the world transform the
tough sell, given that Nigeria is still working to has continued to make travel difficult.
establish domestic gas transportation and dis- But there may be other issues in play – such country
tribution networks, as well as fully functional as, for example, the fact that the government has
domestic gas markets. still not succeeded in securing the passage of the
It may be even tougher in light of Nigeria’s Petroleum Industry Bill (PIB), which is designed
disappointing track record on this front. The to establish a new legal and regulatory regime for
country has, for instance, been slow to realise the domestic oil and gas industry. The PIB may
the potential of its associated gas resources. turn out to be a crucial element in the success
Last week, the Leadership newspaper drew of NGFCP and other gas-related initiatives, as it
attention to the fact that the Nigeria Gas Flare provides for the creation of a new state agency to
Commercialisation Programme (NGFCP) had oversee commercial, operational and technical
not accomplished much since its launch in 2016. operations in the downstream and midstream
Leadership pointed out that Nigeria’s Depart- gas sector. If so, the first bidding round for com-
ment of Petroleum Resources (DPR) did suc- mercialisation of associated gas may not be con-
ceed in launching the first round of bidding for cluded until the legislation is approved. ™

NNPC MD explains Dangote plans

Nigeria’s NOC has explained its intention to invest in the mega-refinery being built by Dangote Group

NIGERIAN National Petroleum Corp. (NNPC) a project of such scale.
managing director Mele Kyari this week pro- The refinery is being built in Lekki Free Trade
vided further detail on the intentions behind its Zone (FTZ) near Lagos and is expected to begin
plan to acquire an equity stake in the new Dan- commissioning by the end of the year, with Dan-
gote Refinery. gote Group saying recently that construction
Speaking to Nigeria’s Channels Television, had reached 79% completion.
he said that the investment was driven by the Last month, NNPC was in talks with the
650,000 barrel per day (bpd) plant’s potential African Export-Import Bank (Afreximbank) to
to generate profits as well as the need for the borrow around $2.5bn to buy a 20% interest in
national oil company (NOC) to be involved in the Dangote Oil Refining Co. (DORC).

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