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Nigeria has lost gas export contracts running into billions of dollars due to low investment in the energy sector .
Findings showed that the lost gas export contracts were expected to run for several years.
It was learnt that numerous contracts, which ought to have been signed with foreign companies and countries in the last two years, were lost due to low investment in the sector especially new exploration, insecurity in the Niger Delta, and lack of good fiscal policies to drive investments.
While gas countries such as Qatar, the United States, Algeria, Egypt, and Iran are signing huge gas contracts, officials lamented that Nigeria has not been able to meet gas obligations to its international customers, thereby losing out on juicy contracts worth billions of dollars.
Part of the natural gas deals lost, The PUNCH gathered were mostly from Western European countries as the continent seeks to ramp up imports from Africa and cut off imports from Russia due to the country’s ongoing war with Ukraine.
Experts presently put Europe’s natural gas needs at about 40 per cent of total global consumption.
In an effort to achieve that, Europe had reportedly sent several delegations to Nigeria to discuss ways of increasing importation.
However, the country’s inability to meet expectations due to low exploration and part-implementation of the Petroleum Industry Act has dashed the hope of increasing earnings from its huge reserves which sit at 209 trillion cubic feet.
According to BP’s Statistical Review of World Energy, 2021, Russia has the world’s largest reserves of natural gas, followed by Iran and Qatar, accounting for half of the world’s natural gas reserves in 2020.
The International Energy Agency in 2021 stated that European imports of gas from Russia were more than 380 million cubic metres per day via pipelines and totalled about 140 bcm yearly while an additional 15 bcm was delivered in liquefied natural gas form.
The EU had announced a two-thirds reduction of Russian gas by the end of 2022.
Nigeria is the fourth gas supplier to Europe- at least 40 per cent of the Nigerian LNG is currently exported to Europe.
It was further gathered that European delegations were sent to the ex-Minister of State, Petroleum, Timipre Sylva; the Group Managing Director of the Nigerian National Petroleum Company Limited, Mele Kyari; and the midstream/downstream authority.
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The delegation which met with Sylva included the European Union Ambassador to Nigeria and the Economic Community of West African States, Samuela Isopi, and the French Ambassador to Nigeria, Emmaunelle Blatmann.
Others were the Spanish Ambassador to Nigeria, Juan Sell; Portuguese Ambassador, Luis Barros, and Italian Deputy Head of Mission, Tarek Chazli.
Sources told The PUNCH that at the meeting, Sylva had told the delegations that although Nigeria was ready to supply Europe, however, “the continent has to encourage its oil and gas companies such as Shell, Eni, Total Energies among others to scale up investments in the gas sector in Nigeria.”
Aside from visits to Nigeria, the Italian Prime Minister, Mario Draghi, also visited Algeria for the same talks.
Algeria supplies 30 per cent of the gas required by Italy, while 40 per cent comes from Russia, according to official figures.
Draghi’s visit was a prelude to that of the Chairman of the Italian energy group Eni, Claudio Descalzi, during which he met with Toufik Hakar, the president of Sonatrach, the Algerian hydrocarbons agency, with whom he reviewed the state of the bilateral partnership.
Egypt and the EU have also held a meeting between Prime Minister, Mostafa Madbouly and Frans Timmermans, the EU’s climate chief, in Cairo.
Other diplomats from the European delegation on the visit were the Ambassador of Portugal, Barros; Ambassador of Spain, Sell; Ambassador of Italy, Stefano De Leo and Deputy Head of Mission (France), Olivier Chatelais.
It was also learnt that a delegation from the Netherlands led by Ewout de Wit, the Counsellor/Deputy Head of Mission, Embassy of the Kingdom of the Netherlands to Nigeria, visited the Nigerian Midstream and Downstream Petroleum Regulatory Authority on the possibility of increasing gas supply from Nigeria.
It was gathered that if the discussions had gone well, Nigeria would have tied down about a 20-year deal for itself.
At the just-concluded conference of the Nigerian Gas Association held in tandem with that of the Federal Government’s Nigerian International Energy Summit in Abuja, Managing Director, Nigeria LNG Limited, Dr. Philip Mshelbila while also speaking at the conference, said Nigeria’s gas supply to its international customers had got “so bad” in the last two years.
According to him, demand has outweighed supply.
“Let me get specific about exports. We started this decline in gas supply, it really got bad within the last two years in particular. During that time, we had COVID, and we then had the Ukraine-Russia crisis. NLNG is currently not meeting its gas export obligations to customers, not to talk of signing new long-term gas export contracts,” he said.
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