‘Effective incentives will boost development of Nigeria’s gas potential’
The Chief Executive Officer, Frontier Oil Limited, Dada Thomas, has called for an improved fiscal regime relative to gas development by incentivizing the indigenous gas operators.
He added that strong political will, enabling policy, commercial and regulatory framework are the key things that must be put in place if the country must fully tap into the 192TCF (trillion cubic feet) gas potentials.
Dada who gave this assertion at the 17th yearly general meeting of the Nigerian Gas Association in Lagos last week, stressed the need for government to exercise strong political will for the development of the country’s oil and gas sector.
Dada, who was elected as the new President of the association at the meeting, said that the future for gas is bright and the government would need to give support to indigenous operators who have contributed over 53 per cent of local gas consumption in Nigeria.
Specifically, he called on the federal government to give indigenous gas companies the necessary backing by giving them access to the abundance of gas currently in the possession of the international oil companies (IOC’s).
He said: “The Federal Government needs to ensure that more gas access, most of which are locked up in the hands of the IOC’s is released so that indigenous operators can get to them.
“If the Government could give incentives to IOCs in the past then surely it is only fair and equitable that they should also give similar incentives to indigenous operators to undertake domestic gas projects which will help Nigeria meet its power and other gas related requirements”.
Apart from the incentives, Dada also called for the quick implementation of the willing buyer, willing seller policy as against the present regulated policy. “I assure you that as long as we keep regulating the gas pricing, because the bulk of the gas used in this country is by power sector which is a regulated industry, then we have a problem. If an investor carries out a due diligence on a project and his numbers are not attractive enough, no lender will be willing to lend him money for him to carry out the project”.
Added o this, according to him, is the issue of infrastructural development which he described as very critical to the sector. “We need to develop the infrastructure to move gas molecules from the producers to the consumers easily”, he said.