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Gastech 2018: How Nigeria’s $20bn FDI target hit brickwall

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Posted on September 24, 2018

Nigeria’s quest to attract about $20 billion in Foreign Direct Investment (FDI) to boost its ailing economy yet suffered a major setback on Monday; when it again failed to get represented at a global gathering of oil and gas investors.
The event was the 30th edition of Gastech Exhibition and Conference which held from September 17–20, 2018 in Barcelona, Spain where Nigeria was to speak on the topic ‘‘The role of NOCs and IOCs in Delivering Global Energy Security Gastech is regarded as the most significant meeting place for up-stream, midstream and down-stream gas and LNG professionals, where they convene to do business.
But, the absence of Nigeria ought to have been represented by the Nigerian National Petroleum Corporation (NNPC) at the Global Leaders Panel was a huge setback to the country.
The Executive Secretary of the Nigerian Investment Promotion Council (NIPC), Yewande Sadiku, had said Nigeria was targeting about $25 billion in FDI by 2020.
For some years, the oil and gas sector contribution to the country’s Gross Domestic Product (GDP) has been on the decline.
The National Bureau of Statistics (NBS) recently disclosed that the decline in Nigeria’s oil production has slowed the country’s GDP to 1.5 percent in the second quarter of 2018 (Q2’18). But to shore up investments in the oil and gas sector, the Federal Government has been encouraging FDI through incentives, tax holidays and attendance of local and international conferences Group Managing Director (GMD) of the Nigerian National
Petroleum Corporation (NNPC), Mr. Maikanti Baru, who had been scheduled to canvass fresh investment opportunities for the country was however not present.
Baru, had been slated to speak with other CEOs on the global leaders’ panel on the theme The Role of National Oil Companies (NOCs) and International Oil Companies (IOCs) in Delivering Global Energy Security at the just concluded Gas- tech 2018 Exhibition and Conference in Barcelona, Spain.
For over 45 years, Gastech is regarded as the most significant meeting place for upstream, mid- stream and downstream gas and LNG professionals, where they convene to do business.
Achieving energy security in Nigeria
Only recently the Senate President, Dr. Abubakar Bukola Saraki, listed steps that need to be taken to achieve energy security in the country that would lead to safe economic well-being of the people.
Saraki gave the recommendations in his speech at a one day workshop on the State of Energy Security in Nigeria, organised by the Konrad Adenauer Stiftung (KAS) climate policy and energy security programme for sub-Saharan Africa in Lagos.
He said that the country must look inwards to provide the required capital to invest in energy infrastructure by reforming the administration of current major source of revenue, improving other revenue generating sectors and instituting an economic diversification framework that could initiate a step-wise transition to a green economic development pathway.
Represented by his Chief of Staff, Hakeem Baba Ahmed, the Senate President, said it was key for the country to deepen strategic partnerships with countries that have more experience and resources to build capacity for policy coherence and technology transfer in order to generate made in Nigeria energy access innovations to grow the Naira.
He said while the 8th National Assembly firmly holds that the supply of adequate and affordable energy mix is essential, it should be a complimentary means to achieve energy security.
“Nigeria must deepen strategic partnerships with countries that have more experience and resources to build our capacity for policy coherence and technology transfer to generate made in Nigeria energy access innovations to grow the Naira.
The global perspective
President Gas, Renewables and Power and Executive Vice President, Total, Mr. Philippe Sauquet, said ‘‘ It is clear we have to work on the link between supply and demand to make sure there is a good connection. This is what we are doing more and more. We have been working on going more and more downstream over the last few years.
Recently we decided to enter into electricity, which is the end of the gas chain,’’. He explained that the company
for now has more than four billion customers in Europe, adding that, in doing this, Total was well positioned to make sure it understands the need of customers who want to get more and more clean energy.
‘‘We can now deliver electricity sourced from renewable sources but also from gas as we need reliability of supply. Gas is the means of meeting this reliability. Our gas and LNG power supply has to be low-cost. We have been in the Middle East for long time. We are also starting in the U.S. and of course working with our partner Novatek in Russia with our Yamel LNG project,’’
He disclosed that climate is growing in importance and at the same time renewable are becoming more prominent with gas being part of the equation for a long time.
‘‘What we do in Total is we continue to invest and develop new projects in order to make sure our customers have enough supply. This year we have started Yamal LNG in Russia.The biggest thing we could offer Novatek was market access. It is very difficult in the current world to sign long-term contracts. We can offer a portfolio that has security of supply. Coal is our economic enemy and we want to make sure gas prevails,’’ he assured.
For his part, the Chief Operating Officer (COO), CEPSA, Mr. Juan Vera, talked about the vital importance that the supply of gas from Algeria has played.
He said: “Our biggest partner in terms of gas is Algeria, which was the first sender of methane to Spain. Algeria has been a constant and reliable partner for Spain for many years.
The supply of gas from Algeria accounts for more than 50 per cent of natural gas consumed in Spain. It has always been the buffer of any increase or decrease in demand we have had in Spain.
“Spain’s other advantage is that we have had the luxury of having great infrastructure. Enagas and Reganosa have a lot of capacity and this allows the Spanish market to be flexible. Our regasification plants give us the flexibility and provide our energy security.”
He added: “Spain is a wonderful showcase of what might happen in the future. We are looking to get into Portugal and France. The debate is about partnerships with whom and where.”
A lost opportunity
But, while other members of the panel which included; Sauquet, Vera and Head of Gas Market Analysis Department, Gas Exporting Countries Forum (GECF), Mahd-jouba Belaifa, had all been seated, the moderator, CEO of E treanor Media, Eithne Treanor, announced the shocker that Baru would not be available for the session.
As soon as they received the news of the absence of Baru, majority of the guests seated who are apparently potential investors started leaving the hall to attend to other business engagements of the day.
Some of the stakeholders including investors, foreign media, oil and gas consultants expressed disappointment, saying they had travelled from other parts of Europe to enable them listen to the GMD and possibly seek an audience with him since it was much easier to get him outside the county than in Nigeria to guide them in their investment decisions.
Sources close to the office of the GMD confirmed to Daily Sun that the NNPC boss was indeed present in Barcelona, but surprisingly could not attend the event.
Other efforts made to salvage the situation by getting a representative to stand in for the GMD when it was apparent that he won’t be attending the session proved abortive as the Group Executive Director/ Chief Operating Officer (COO) Gas, NNPC, Mr. Saidu Mohammed, was said to be in transit in London.
Nigeria with a proven gas reserve of 197 trillion cubic feet (tcf) is seeking investments into its gas sector to help the country tap the unutilised gas to develop other critical sectors of the economy.
More troubling was the fact that Nigeria accounts for 40 percent of flared gas annually in Africa amounting to about $7 billion in wasted opportunities.
Source: http://sunnewsonline.com/gastech-2018-how-nigerias-20bn-fdi-target-hit-brickwall/


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