Nigeria’s Gas Sector: Why is Nigeria Not Making a Lot Of Money From Gas?

Must Read

List of First Bank of Nigeria Sort Codes in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...

Burger King Announces Grand Entry In To Nigerian Market, Promises First Restaurant In August 2021

Allied Food and Confectionary Services Limited announced exciting plans to launch and grow the Burger King® brand in Nigeria,...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...
- Advertisement -

Nigeria is known as a crude oil giant, relying heavily on the black gold to shore up revenues and FX reserves. However, one narrative is often downplayed – ‘Nigeria has more gas than oil’. According to the latest data from the Department of Petroleum Resources (DPR), Nigeria has proven gas reserves of 200.8tcf – equivalent to 35.8tn barrels of oil, about 1,000x higher than the country’s proven oil reserves of 37.0bn barrels. This begs the question, ‘Why is Nigeria not making a lot of money from gas?’

Analysing data from the NNPC, Nigeria’s monthly gas production has remained static, below
300bcf. Notably, gas investments have slowed, partly due to the capital intensive nature of capturing and transporting gas. Also, given that gas is an associated product of crude oil, the nonfunctional status of several oil-fields across the country, have limited the prospects for gas production. Again, under-utilisation of power generating capacity has limited the demand for gas in Nigeria, as the power sector only takes 8.8% of annual gas produced. Finally, gas flaring continues to be a major obstacle. Over 2019, using the Domestic Supply Obligation price of $2.5/mscf, gas worth $517.1mn was flared. Clearly, the goal of eliminating routine gas flaring or reducing it to 2.0% by 2020, through the Nigerian Gas Flare Commercialization Programme, has to remain unachieved.

Read Also:  Ford - Packing Heat: How Ford's Latest Tech Helps Police Vehicles Neutralize COVID-19

Nigeria’s Gas Sector: Why is Nigeria Not Making a Lot Of Money From Gas? - Brand Spur

As 2020 unwraps, several positive recent developments have come to fore. The DPR has shortlisted 200 firms, to capture and commercialise gas flared from 45 sites. Also, the Final Investment Decisions (FIDs) on Nigeria’s LNG Train 7 project, as well as the FG’s electrification roadmap, will create massive demand for gas. However, gas infrastructure remains a key obstacle, in cementing the sector’s profitability.

- Advertisement -
Read Also:  Airtel, Avaya Partner to Enable Remote Work, Learning in Nigeria

United Capital Research

- Advertisement -
Nigeria’s Gas Sector: Why is Nigeria Not Making a Lot Of Money From Gas? - Brand SpurNigeria’s Gas Sector: Why is Nigeria Not Making a Lot Of Money From Gas? - Brand Spur

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Nigeria’s Gas Sector: Why is Nigeria Not Making a Lot Of Money From Gas? - Brand SpurNigeria’s Gas Sector: Why is Nigeria Not Making a Lot Of Money From Gas? - Brand Spur

Latest News

How The Trump Plaza, Atlantic City, Came to be Demolished

It is not so often nowadays that a building is simply demolished, particularly not one of this scale. We...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -Nigeria’s Gas Sector: Why is Nigeria Not Making a Lot Of Money From Gas? - Brand SpurNigeria’s Gas Sector: Why is Nigeria Not Making a Lot Of Money From Gas? - Brand Spur