President Muhammadu Buhari has stated desires to partner with Iran in gas utilization, technology, trade, agriculture and investments.
A statement by his Senior Special Assistant on Media and Publicity quoted President Buhari at a bilateral meeting held on the sidelines of the 5th Summit of Gas Exporting Countries Forum in Malabo, Equatorial Guinea, with Iranian Vice President for Economic Affairs, Mohammad Nahavandian that a binational commission will be set up to firm up the agreement.
He lamented at the slow pace of growth in Nigeria’s gas industry, stressing that instability and partisan politics has led to continuous gas flaring in the country.
“I will work very hard towards the joint commission. We will go back and identify sectors of common interest. In particular, we are interested in how you utilized your gas, with 95 per cent of your national population wired to gas.
“The evolution of our gas industry is too slow. We are still flaring gas. I will work with you on how to harness and utilize our gas. I am very impressed.”
The Federal Executive Council has agreed on new strategies to help in eliminating the problem of gas flaring in the country.
The Minister of Science and Technology, Dr Ogbonnaya Onu, while briefing journalists after the Federal Executive Council meeting presided over by Vice President Yemi Osinbajo on Wednesday at the Presidential Villa, Abuja, said one way to eliminate the problem was to convert the natural gas to methanol.
“One way to help us completely solve this problem of gas flaring is to convert the natural gas into methanol. Methanol is a liquid that finds use in virtually all sectors of the economy.
“You can use methanol for transportation,” he said.
“It can also be used to replace diesel for all these trucks that we find on our high way because it is cheaper and environmentally friendly so that all the problems that are associated with the use of diesel can be solved by the use of methanol.
“Also, our people in the rural areas can use methanol for cooking so that it would replace kerosene which creates sooth and darkens your pot but methanol does not have that. It is very clean”.
The House of Representatives is set to investigate allegations that the Federal Government has lost over $14 billion because of non-payment of gas flared penalties by international oil companies.
The sponsor of the motion which was adopted by the House, Johnson Agbonayinma from Edo State alleges that the amount is accrued between April of 2008 and 2016.
He said, “Let this house also be aware that the Deputy Director and head of upstream of the Department of Petroleum Resources, DPR while speaking at a conference in Houston, Texa, the United States of America, said Nigeria has lost $14.2billion between April 2008 and October 2016 in form of penalties for gas flaring, which the International Oil Company, IOC failed to pay.”
The House is also urging relevant government agencies to undertake a damage and post impact assessment of the environment involved and also direct the payment of compensation to the affected communities.
The Vice President of Nigeria, Professor Yemi Osinbajo, says Africa must prioritize development of its natural resources, including fossil fuels, ahead of concerns for climate change or risk losing millions of African lives to poverty and hunger in a much faster rate than climate change.
Professor Osinbajo is attending the African Development annual meeting focused on energy and climate change in Zambia.
He said that it was impossible for Africa to de-emphasize its natural resources which must first be exploited before economic development can spread across the continent.
He said that while climate change concerns were important, Africans cannot be compelled to take the greater burden of resolving the problem at the risk of its development which is still at a nascent stage and despite being the least contributor to the devastation of the environment.
President Muhammadu Buhari has assured oil companies operating in the Nigeria’s Niger Delta that the government is taking all necessary actions to protect strategic assets in the region from vandals and criminals.
President Buhari gave the assurance on Friday in Abuja at a meeting with the Global Director (Upstream) of the Royal Dutch Shell Group, Mr Andrew Brown.
He told the oil giant that he had directed the Chief of Naval Staff to re-organise and strengthen the military Joint Task Force (JTF) in the Niger Delta, to deal effectively with the resurgence of militancy and the sabotage of oil installations.
The President said that the operations of the JTF were also being enhanced with increased support and cooperation from the United States and Europe in the areas of training, intelligence, equipment and logistics.
“We have to be very serious with the situation in the Niger Delta because it threatens the national economy.
“I assure you that everything possible will be done to protect personnel and oil assets in the region,” he said in a statement by his spokesman, Garba Shehu.
President Buhari urged aggrieved persons, militants and communities in the Niger Delta to drop their confrontational stance and work with those who had been charged by the Federal Government to review the Amnesty Programme initiated by the Yar’Adua Administration for the benefit of all parties.
He praised the resilience and staying power of Shell in Nigeria, despite the operational challenges of the environment.
President Buhari urged the company to do its best to end gas-flaring in southern Nigeria as soon as possible and produce more gas for electricity generation to support manufacturing and job creation.
Mr Brown had appealed for an urgent solution to rising crime and militancy in the Niger Delta, just as the Shell executive dispelled speculations that the company was pulling out of Nigeria.
He said that contrary to such speculations, Shell was currently in discussions with the Nigeria National Petroleum Corporation (NNPC) on new joint oil and gas projects.
The bill for an act to provide for measures to address climate change has passed the essential second reading in the Senate.
The bill, which was sponsored by a federal lawmaker Senator Isah Misau, seeks to reduce greenhouse gas emissions to promote the use of renewable sources of energy.
Leading the debate, Senator Misau, said that in spite of Nigeria’s participation in conferences and seminars on global warming, not much had been done to tackle the problem of greenhouse emissions, gas flaring and other harmful environmental practices.
He said that if nothing was done to stop gas flaring and other harmful environmental practices that deplete the ozone layer, the effect on Nigerians would be enormous.
With the support of the National Assembly, Nigeria intends to sign the United Nations Agreement on Zero Routing Gas Flaring by 2030, according to the Vice President, Prof. Yemi Osinbajo.
He was speaking on Monday at the opening of the 6th African Petroleum Congress and Exhibition where he represented President Muhammadu Buhari.
The Vice President, who declared the conference opened, said that ending gas flaring was an imperative for African oil producers considering the amount of waste involved, adding that the Nigerian government had set an earlier national target of 2020 to end gas flaring in the country.
While calling on African countries to take advantage of the gas-to-power potentials, he observed that “there is also the gas-to-power challenge in many member-states and the paradox of much gas but precious little gas to fire power plants.”
“It’s time to take a much further stand on gas flaring, both from environmental and a waste-of-needed-resources perspectives,” the Vice President stated to the gathering composed of oil and energy ministers from several African countries and chieftains in the oil and gas sector.
The Vice President explained that the incremental use of gas in Africa’s energy mix has become an imperative, stressing that “if Africa must meet her future energy needs, the issue of the development of a robust gas infrastructure must be jointly addressed.”
According to him, of the over 150 billion cubic metres of associated gas flared annually in the world, “Africa flares an estimated 40 billion cubic metres, while about half of that is flared by Nigeria.” He further observed that Nigeria has the 7th largest deposit of gas in the world with reserves estimated at over 185 trillion cubic feet (TCF), and also the highest quality.
Addressing legislators, policy makers and oil and gas industry experts from around the continent at the International Conference Centre in Abuja, Prof Osinbajo observed that with the present volatility in the industry, the coming years would be defining for African oil and gas producing countries.
He suggested that developing local content initiatives and policies would be very useful for the sector, while also adding that “a common approach to local content will ensure that the whole of Africa benefit from economy of scale associated with vast resources.”
Besides, he said with the current oil prices and the challenges faced in the industry, the relevance and creativity of the African Petroleum Producers Association “is being tested.”
Vice President Osinbajo gave the assurance that the continent has all the resources needed to transform African countries stating that “there is no reason why the African oil and gas industry should remain attached to the apron springs of industries elsewhere.”
Expressing the need for African oil producing countries to take their destiny in their hands, Prof. Osinbajo challenged African Petroleum Producers Association (APPA) member-countries to recognize the latent and huge resources in Africa and develop the strategy for the development of domestic refining capacity in the oil and gas sector critical for sustainable economic growth.
“We must explore mechanisms to expand regional refining capacities in an efficient and cost effective manner”, he submitted, recalling Nigeria’s active involvement in the West African pipeline project expected to deliver clean, safe natural gas from Nigeria to countries in the sub-region.
While commending the organizers of the conference, the Vice President described the theme of the meeting – “Positioning African Petroleum for Global Development and Value Addition” as apt because hydro carbon accounts for a significant proportion of government revenue and could help address the challenge of gas-to-power for energy generation.
In his welcome remarks, Nigeria’s Minister of State for Petroleum Resources, and President of APPA, Dr. Ibe Kachikwu, stated that the conference was timely, coming at a critical period when the industry was experiencing price volatility.
He observed that the situation is of global concern threatening oil and gas investments, but also creating opportunities for new energy sources.
At the opening ceremony of conference were members of the National Assembly, Ministers and members of the Federal Executive Council, FEC, from Nigeria including the Communication Minister, Mr. Adebayo Shittu, the Minister of State for Health, Dr. Osagie Ehanire, and the Secretary to the Government of the Federation, Mr. Babachir Lawal.
The Executive Secretary of the association, Mohaman Gaya, envoys, as well as local and international petroleum industry chieftains and experts were also in attendance.
It appears that Government’s intervention in the gas sector is paying off, as the Nigeria National Petroleum Corporation, NNPC, says gas flaring in Nigeria has reduced from 25% to 11%.
The NNPC Group Managing Director, Mr Andrew Yakubu, announced this at a conference organized by the Senate Committee on Gas in Abuja.
The World Bank had listed Nigeria as Africa’s biggest in terms of gas flaring, while a report published by the Organization of Petroleum Exporting Countries, OPEC, also ranked Nigeria as the second highest gas flaring nation in the world.
The Federal Government has, meanwhile, been setting and shifting deadlines to end gas flaring for years, but despite the expiration of several deadlines, the most recent being the December 31, 2013 deadline, gas flaring still continued in Nigeria.
The NNPC Group Managing Director, however, said that some progress has been made in reducing gas flaring in the country, as many international oil companies are fast approaching full flare out in the country.
Mr Yakubu said that in the past three years, the Federal Government had begun an aggressive implementation of a nationwide gas infrastructure blueprint with the Government’s intervention beginning to generate a change in the direction of gas in Nigeria.
But while some progress is being made in improving gas infrastructure, the utilization of domestic gas in Nigeria still remains a major issue, and this is according to the Chairman Senate Committee on Gas,Senator Nkechi Nwaogu.
Senator Nwaogu said that an increased use of cooking gas would not only lead to huge savings in billions of dollars on subsidy but would also help cut down greenhouse gas emissions which contribute greatly to global warming.
The newly drafted Petroleum Industry Bill (PIB), which is now close to being finalised, mandates that oil firms must stop flaring gas by the end of this year, and that if they don’t they can be fined. The Federal Government has long pledged but failed to end flaring, and although officials say it has fallen in the past decade, Nigeria remains the world’s second biggest burner of gas associated with crude oil production after Russia. Many see the new target date to end flaring as unrealistic.
“Natural gas shall not be flared or vented after 31st December, 2012, in any oil and gas production operation, block or field, onshore or offshore, or gas facility,” except under exceptional and temporary circumstances, says a new draft of the long-awaited Petroleum Industry Bill (PIB).
“Any licensee who flares or vents gas without the permission of the Minister in (special) circumstances … shall be liable to pay a fine which shall not be less than the value of gas.”
Nigeria flared some 30 billion standard cubic feet of gas in January, according to the latest figures from Nigeria National Petroleum Corporation (NNPC), published by the national news agency. That is equivalent to a third of the annual consumption of an industrialised country like the United Kingdom.
Of that, ExxonMobil topped the list, flaring 9.85 billion cubic feet out of 38.64 billion produced, while Chevron flared 8.25 billion cubic feet out of 19.23 billion.
Leading operator Shell, which runs Nigeria’s liquefied natural gas (LNG) plant, flared 5.44 billion cubic feet, a relatively small part of the 76.4 billion it produced.
All have been criticised by environmental groups, but the oil majors retort that they would be happy to trap all of the gas if the government provided them with a market for it.
SHOW ME THE MONEY
The bright orange flares that light up the night sky over the swampy Niger Delta, home of Africa’s biggest energy industry; have long been a major complaint of its inhabitants.
The global ramifications are also damaging.
The World Bank estimates that 5 trillion cubic feet of gas was flared globally last year, releasing 360 million metric tons of carbon dioxide (CO2) into the atmosphere, equal to France’s total emissions or 70 million cars’ worth.
Most campaigners admit this bill’s deadline is unrealistic.
“We are almost in June and the bill still has a distance to go before it becomes law. I do not therefore see the goal to be achievable within the stated time frame,” said Letum Mitee, president of the Movement for the Survival of Ogoni people, whose homeland is where oil was first discovered in Nigeria.
Oil companies say trapping associated gas is not profitable enough without a market. Global gas prices are at record lows and though Nigeria desperately needs it for electricity, its power sector is not organised enough to make much use of it.
“Harnessing gas is only half of the story; gas needs customers as well,” Shell says on its Nigeria website.
“To encourage further investment and to boost the supply of gas to domestic consumers, Nigeria needs a comprehensive and flexible gas infrastructure that allows for distribution.”
More radical campaigners urge stopping the flaring anyway.
“Where there’s no infrastructure to convert the wasted gas into power, production of crude … can simply be shut down,” said Nnimmo Bassey of Friends of the Earth, Nigeria.
That seems highly unlikely from a government dependent on oil for 95 percent of its revenues. The oil companies warn they would have to turn off the oil taps for a bit just to stop the flaring, but no Nigerian official has dared suggest they do.
The Chief Executive Officer of Royal Dutch Shell Plc, Peter Voser said on Wednesday that the company is looking at investing a further $4 billion in its operations onshore Nigeria in efficiency projects aimed at both raising production and minimizing harmful natural-gas flaring. In remarks to investors published on Shell’s website, Mr Voser said Shell’s oil production in Nigeria rose to about 800,000 barrels a day in 2011. However, he also highlighted the dangers of working in the country, where two of its contractors were killed by gunmen last year.
The company, which is the dominant foreign oil company operating in Nigeria, has struggled to boost production in the region for years, held down by militant activity in the Niger Delta region.
Nigeria is by far Shell’s most important region, accounting for about 16% of its worldwide production of oil and liquid gas from 2006 to 2010. While production ticked higher to 19% in 2010.
Nigeria, an OPEC producer nation, accounted for around 10% of Shell’s total global output last year.
Shell’s CEO said the company’s investment in natural gas would support efforts to cut down on gas fires currently burning at oil wells. Nigeria flared off the second most gas in 2010 behind only Russia.
Environmentalists say the fires, known as flaring, are one of the largest sources of greenhouse gases which cause global warming. They can also sicken those living nearby.
Shell said it expects to complete those investments between 2014 and 2015, pending approval by partners and the tangible security environment.
Nigeria, an OPEC producer nation, accounted for around 10% of Shell’s total global output last year.