PETAN Refocus On Gas To Attract Investment Into Nigeria
By Margaret Nongo-Okojokwu
Gas utilisation is a primary goal of Nigeria’s petroleum and energy policies. This is because, with a proven reserve of 260 trillion cubic feet of natural gas, Nigeria’s gas reserve is triple the nation’s crude oil resources. Hitherto, associated gas encountered during the normal course of oil production has been largely flared. Nigeria is reputed to be the largest gas-flaring country in the world. By not fully harnessing its gas resources, Nigeria loses an estimated 18.2 million U.S. dollars daily.
It is therefore in the light of the above that the Petroleum Technology Association of Nigerian, PETAN’s participation in this year’s Offshore Technology Conference, OTC, held at the Reliant Park, Houston Texas, in the United States, is hinged on attracting more investments in Nigeria’s gas sector. The refocus on gas development follows the recent crash in the price of crude at the international oil market.
“For the OTC 2015, we are carrying the message that we, as an industry, can work together to fix the challenges and are creating new opportunities for investment in Nigeria, said Engr. Emeka Ene, PETAN’s President. “For example, our theme for the topical panel session at this year’s OTC is “Natural Gas development in Nigeria – A compelling investment frontier in a turbulent oil market.”
“We believe that Nigeria still offers an attractive opportunity for investments in the oil and gas industry, particularly in the gas sector. There are potential opportunities for investing in gas infrastructure development, gas to power and cooking gas.
According to the President, OTC pavilion has become a very viable platform for exhibitors to showcase what they are doing in the industry, and also to attract investors to the Nigerian oil and gas industry. “It is a very good platform for striking new business deal. Apart from that, it has really portrayed Nigeria in a very positive light,” he said.
Ene stated that the conference has created opportunity for people to meet and interact with serious Nigerian players, business men, entrepreneurs and technocrats who have been in business for over two decades, adding that this is why PETAN is taking this extra step to bring Nigerian companies to exhibit and make new business negotiations.
He said: “I think that technology in itself and various technologies grow in phases. Technology is not one word; it derives from the application of knowledge to get things done. What has happened in the industry is that it’s being done in multiple phases. We had the phase of creating opportunities for Nigerians to provide service, now that it has started maturing with the Nigerian Content Act, to the phase of actually manufacturing. Now that is driving the phase of Research and Development, R&D. We have had a few instances of Professors in universities collaborating with private companies to create solutions including services, in fabrication; in process engineering, we have seen a lot of that already beginning to happen.
“PETAN members and Nigerian companies are encouraging further collaboration and value-added partnerships with the IOCs, independent producers; marginal field operators and of course the private investor community.
During the OTC week, we are also collaborating with the U.S. Embassy commercial department to set up match-making business sessions not just between Nigerian companies and US companies, but also involving Angolan and Mozambican business men and women. One is curious about this refocus on gas, we both know that the federal government has been singing this gas monetisation song for a long time without much success.
“The success of the gas monetisation drive will ultimately depend on private sector engagement powered by local content. Local companies can build gas infrastructure, create a viable market for gas, expand the market for technical services, pool resources and attract more investment into the industry”.
The Group Managing Director, NNPC, Dr Joseph Dawha, has said it was leading a drive to attract massive global investments into the nation’s gas sub-sector.
Dawha noted that with its immense gas potentials, Nigeria “needs not be and must not be a victim of price drop, instead we should position to benefit from it”.
The GMD said for the nation’s gas sub-sector to benefit from the drive, industry players must brace up for the challenges ahead.
“The Nigerian gas sector has seen tremendous focus in the last few years. We have grown capacity at a pace of 18-20 per cent with supply now at about two billion cubic feet of gas per day in the domestic market from a humble start of about 300 million cubic feet per day a few years ago.’’
The GMD said that based on projected growth demand anchored on growing industrial requirements, the sub-sector needed to grow further to some six billion cubic feet of gas per day. He noted that in spite of the annual investment of millions of dollars in the last four years in gas supply and infrastructure, there was need for significant addition to infrastructure and supply development.
“For example, we have built over 500km gas pipelines and we are building an additional 120km currently; but we need to build many more kilometers of pipelines to connect new markets and gas sources.
“We need investments in gas processing, micro-Liquified Natural Gas, Compressed Natural Gas (CNG) as well as upstream Non-Associated Gas (NAG) development. Therein lie the compelling investment opportunities,’’ he said.
He said the theme of the session was not only apt but in tandem with the aspiration and projection of the NNPC for the oil and gas industry.
“It brings to our collective consciousness the potential in Nigerian domestic gas sector.
“We can turn the gloom inherent in low price into a breakthrough for gas based industrialisation of Nigeria,’’ Dawha stated.
PETAN, which has been the coordinator of the Nigerian Pavilion at the OTC, said the conference “avails attendees an opportunity for engagement with key players in the industry.”
Nigerian delegation to this year’s conference includes the Nigerian National Petroleum Corporation, NNPC, international oil companies, IOCs, independents, international and indigenous service companies, investors as well as representatives of government agencies.
PETAN is an association of Nigerian technical oilfield service companies in both the upstream and downstream sectors, which promotes the development of technology in the Nigerian Oil and Gas industry. It does this by mobilising active participation of indigenous firms in international conferences, seminars and workshops, training young graduates through internship programmes.
It also engages in active consultations with the legislative arm of government for enabling policies, its enforcement, and enhancing indigenous companies’ participation in major projects through robust engagements with the IOCs.
OTC is where energy professionals meet to exchange ideas and opinions to advance scientific and technical knowledge for offshore resources and environmental matters. The conference offers key insights by global experts on technological advances, safety and environmentally focused solutions, and economic and regulatory impacts.
The conference and exhibition is an annual gathering of scores of thousands of people from around the world with interest in oil and gas, comprising policy makers, operators, professionals, manufacturers, business executives, entrepreneurs and visitors.
Generally, the collapse of the job market for the oil industry as-well as currently low oil prices led to low attendance numbers for the 2015 OTC at NRG Park Houston. According to Fuelfix.com, attendance fell 12.5 percent this year to 93,400, from a record 108,300 attendees in 2014. The 2015 total is the lowest since 2012, when 89,400 attendees came to the conference, but is still the fifth-highest total attendance figure since OTC began in 1969. About 140,000 oil and gas workers have lost their jobs since the price of oil began to fall from its high in June 2014.
Despite the industry downturn, OTC still grew in the number of organisations attending. The OTC reports that these attendance numbers still represent one of the largest gatherings in the conference’s 47-year history. There was 695,005 feet of indoor and outdoor exhibits which was up from 2014 numbers of 680,025 feet. There were 2,682 exhibitors this year compared to 2,568 last year as-well as 37 countries represented. Forty-two percent of the exhibitors were from international companies.