Nigeria, Africa’s biggest oil producer, plans to issue separate leases for gas assets in order to attract more investors to boost output of the fuel, the state-owned oil company said.
“Gas, over the last few years, has become a very prominent commodity on its own, which requires a life of its own,” David Ige, group executive director for gas and power at the Nigeria National Petroleum Corp., said in a May 15 interview in Abuja, the capital. The nation needs companies such as Russian exporter OAO Gazprom and Centrica Plc, the U.K.’s biggest energy supplier, to enter the market to “drive our gas agenda aggressively,” he said.
Almost all of the West African nation’s reserves of 184 trillion cubic feet of gas, the world’s eight-largest, were found in the course of searching for crude. The new plan seeks to provide opportunities for companies specifically exploring for gas, according to Ige. More than 80 percent of Nigeria’s hydrocarbon reserves are in leases held by Royal Dutch Shell Plc, Chevron Corp., Exxon Mobil Corp., Total SA and Eni SpA, whose priority continues to be oil, Ige said.
These companies run joint ventures with the state-owned NNPC that pump most of the country’s crude. Nigeria currently produces about 9 billion cubic feet a day of gas, half of which is exported as liquefied natural gas. While 1 billion cubic feet a day is flared in the course of oil production, another 1 billion cubic feet is reinjected into oil wells daily for pressure stability. Some 2 billion cubic feet a day is supplied to industries and power plants, where demand is estimated to more than double to 5 billion cubic feet a day in two years.
Source: Bloomberg