• 37% of Nigerians lack electricity access, says NLNG
• PENGASSAN says regulatory uncertainty threatening investment, jobs
• FG to sanction GenCos as operators move to avert grid collapses

Industry experts in the oil and gas sector have blamed regulatory uncertainty, inadequate infrastructure and weak execution for the widening gap between the country’s resources and the value derived from them.

Meanwhile, the Nigerian Electricity Regulatory Commission (NERC) will in the coming days fine or possibly disconnect some power generating plants from the national grid following recommendations by the Nigerian Independent System Operator (NISO).

The Managing Director of NLNG, Adeleye Falade, said at the fifth PENGASSAN Energy and Labour Summit in Abuja yesterday that Nigeria had an estimated 600 trillion cubic feet (TCF) of gas potential but continued to struggle with gas-to-value and conversion issues.

Falade said more than 37 per cent of Nigerians lacked access to electricity as of 2024, even as substantial volumes of associated gas continued to be flared, and gas-based industries struggled to secure reliable supplies.

He said the central challenge was no longer whether Nigeria possessed sufficient gas resources, but whether the country could build the governance structures, infrastructure, commercial frameworks and human capacity required to convert those resources into economic value.

According to him, Nigeria’s gas resources could provide electricity for households, feedstock for industries, jobs for citizens, foreign exchange for the economy and wider prosperity, but resource abundance alone could not deliver those outcomes.

His argument dovetailed with concerns raised by PENGASSAN President, Festus Osifo, who warned that regulatory uncertainty could discourage investment and delay projects required to raise Nigeria’s oil and gas production.

Osifo said investors needed clear, predictable rules; operators needed certainty; workers needed protection; host communities needed confidence; and the government needed sustainable revenues.

He argued that Nigeria’s regulatory framework must therefore be predictable, transparent, efficient and fair.

According to him, changes to the regulatory architecture after the enactment of the Petroleum Industry Act (PIA) 2021, including moving some fiscal provisions to the Nigeria Revenue Act (NRA) and using an executive order to amend provisions of the petroleum law, could create uncertainty for investors.

Group Chief Executive Officer of Nigerian National Petroleum Company Limited (NNPCL), Bayo Ojulari, brought the regulatory debate back to the workforce, saying the effectiveness of any regulatory framework ultimately depended on the people who implemented it.

Ojulari said NNPCL was, therefore, focused on creating a human-centred organisation, where employees felt valued, heard and fairly treated.

The speakers were unanimous that for gas in particular, the challenge extends beyond reserves.

THE move by NERC follows attempts to enforce compliance with Free Governor Mode of Operation (FGM) requirement as part of measures to avert grid collapses, the Managing Director of NISO, Abdu Mohammed, said yesterday in Jebba, Niger State.

Mohammed, speaking at a grid stability workshop hosted by Mainstream Energy Services Limited at Jebba Hydropower Plant, warned that GenCos that fail to comply could face financial penalties, disconnection and suspension from market participation.

With years of economic haemorrhage caused by grid instability, a development which continues to affect the commercial stability of the power sector, as well as homes and businesses that are constantly turning to costly diesel and other self-generation, stakeholders at the workshop revealed that the industry had been operating without proper coordination.

The MD said the system operator had completed assessments of GenCos and submitted a report to NERC for enforcement. He said while some GenCos had complied with the requirement, others had requested extensions, while some remained non-compliant.

“We are at the stage where defaulting GenCos will be sanctioned,” he said, adding that NISO had communicated its findings to NERC and was monitoring compliance.

At the workshop, stakeholders stressed that grid stability could not be achieved by one segment of the electricity value chain alone.

At the event, NISO disclosed it was working on a Supervisory Control and Data Acquisition/Energy Management System (SCADA/EMS) project, which he described as critical to improving system operations and investment management.

Executive Director, Corporate Services, Mainstream Energy Solutions Limited, Usman Umar, said generation, transmission, distribution, regulators and market institutions must work collectively to deliver a stable and reliable electricity system.

The workshop, with the title, ‘Strengthening Grid Stability: A Collaborative Workshop for Industry Practitioners’, brought together representatives of NISO, Transmission Company of Nigeria (TCN), GenCos, DisCos, regulators and other market participants.