By Abdul-Kadir Abdullah
The Edo State Government has called on the Federal Government of Nigeria to support investors in the natural gas industry so as to encourage investors in the industry as the state is already harnessing its gas potential with the aim to meet Nigeria’s energy needs in a responsible manner.
This was contained in a message by the Managing Director Edo State Investment Promotion Office (ESIPO)- Ease of Doing Business Secretariat, Mr. Kelvin Uwaibi while addressing journalists in his office in Benin City, the state capital recently.
“Edo is a hub for gas” Uwaibi noted.
Emphasizing the contribution of Edo State to the energy industry in Nigeria, he noted that Azura-Edo alone contributes 10% of the electricity supply to the national grid adding that the state currently accommodates about six different multinational companies which use natural gas to generate energy in the state.
According to him, “Azura-Edo is contributing meaningfully to the growth of the energy sector in this country. It contributes about 10% of electricity to the national grid. As you may know, it is located in Orhionwon Local Government Area. Seplat Energy has a gas processing plant which is located in Oben, also in Orhionwon Local Government Area. Duport Energy Park is located in Orhionwon too and it contributes 50MW to Edo’s energy pool. Ossiomo is located in Ologbo, Ikpoba Okha Local Government Area, Network Oil & Gas Limited is in Benin. These companies all use gas to generate energy. So, Edo is a hub for gas.” Uwaibi explained.
He used the opportunity to highlight some of the challenges investors face, calling on the Federal Government to address issues like sabotage, vandalism and oil theft to inp[robe investors’ confidence.
“With what we are seeing right now, this industry needs support from the federal government. Let me give you an example when Ossiomo power was shut down for five days in August last year, it was on record that this country lost over $1.9 million in just five days due to the disruption of gas supply to the Ossiomo Power Plant. And you will agree with me that some of the challenges faced by oil and gas companies in Nigeria include sabotage, oil theft, and vandalism. These are some of the reasons why the investors need support from the federal government.
“The business of the government is to create the enabling environment for businesses to thrive. And as it stands today, the oil and gas issue rests with the Federal Government. This is why we are calling on them for support. Is it in the area of review of existing policies to pave way for such support? Whichever way, let it happen”
“It is on record that as of 2022, Nigeria had the largest oil and gas reserves in the African region, with about 37 million barrels of crude oil and 5.5 trillion cubic meters of gas. Gas production has become a main focus for oil and gas companies. This is so because it is a way to respond to strong investment in gas to power projects.” the ESIPO MD conlcuded.
It is important to mention that the key laws that regulate oil and gas in Nigeria are: The Constitution of the Federal Republic of Nigeria 1999 (as amended); the Land Use Act, 1978; the Petroleum Industry Act, 2021 (the Act or PIA; Companies Income Tax Act, 2011; Federal Competition and Consumption Act, 2018 and Companies and Allied Matters Act 2020 (CAMA).
The key government agencies responsible for regulating the oil and gas industry are: the Ministry of Petroleum Resources headed by the Minister of Petroleum Resources responsible for policy formulation and issuing applicable licenses; the Nigerian Upstream Petroleum Regulatory Commission, which is responsible
for regulating activities in the Upstream sector; the Nigerian Midstream and Downstream Petroleum Regulatory Authority responsible for regulating activities of the midstream and downstream sectors; the Federal Ministry of Environment, responsible for issuing Environmental Impact Assessment Certificate; the Federal Inland Revenue Service (FIRS)that administers and collects FGN taxes, and the Nigerian Content Development and Monitoring Board, responsible for monitoring and management of Nigerian content in the industry.
Subnationals play a minimal role, hence the need for the federal government to support states driving investments into the gas sector.
