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Unclear policy on gas is responsible for gas flaring – Eterna Oil boss
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Ibrahim Boyi, managing director of Eterna Oil and Gas plc made this assertion yesterday in an exclusive chat with BusinessDay.
He said efforts by the government and oil companies to achieve zero flare would be a nullity until these issues were resolved.
“My view of the gas issue is twofold: First, the Niger Delta crises have not really helped investment in the gas sector of the industry. Most of the gas infrastructure you are likely to have in order to be able to convert these gas and monetise it are supposed to be onshore infrastructure. Now, if you have a very hostile community like we have been in the Niger Delta, I do not imagine that much can be achieved in that area,” he said.
The Eterna Oil boss pointed out that the crisis scare away investors who should build gas-gathering projects and other projects in the area.
“The fear of investors about the hostile environment and of not being able to carry out their businesses and ensure that their investment is secure, have accounted largely for the lackadaisical attitude in terms of investment in the gas sector. Another major problem has been the policy of government itself. We still do not have a very clear policy on gas development in Nigeria,” he added.
According to him, the Gas Act, which is still before the National Assembly, has not been passed, adding that there is no regulatory environment that exists today which gives the operators the comfort and assurance to bring in their investments.
He noted that a regulatory framework is required to assure foreign and local investors that their investments are protected.
Iboyi pointed out that investors could be encouraged in terms of risk of pricing or reliable supply of gas or other concessions that are there to enable them make reasonable returns on their investments in that area.
“We believe that with much government’s determination to sort out this problem, gas flare out can be achieved. But I can definitely say the 2008 deadline set by the government is definitely not feasible,” he said.
Meanwhile, the Flare Reduction Committee set up by the Federal Government meets in Abuja almost on a weekly basis.
The committee is currently working with consultants in the preparation of assessments on the environmental, health and financial impacts of ending or continuing routine Gas Flaring in the country after December 2008.
“The Government and industry remain fully committed to the elimination of routine flaring, and we share responsibility for not achieving bigger results, some progress in flaring reduction has been achieved but it is clearly not enough”, says Minister of State for Energy (Gas), Emmanuel Olatunde Odusina.
“That’s why we have created this Flare Reduction Committee to come up with a road map for elimination of routine flaring within a realistic timeframe, in a joint effort by government, industry and other stakeholders so we can attain bigger gas flaring reduction,” he added.
Most analysts say some of the major inhibitors to a faster gas flaring reduction in Nigeria include: lack of adequate infrastructure to transport the gas, inequitable gas pricing, lack of capital for gas utilization projects, security issues in the Niger Delta, etc.
He said efforts by the government and oil companies to achieve zero flare would be a nullity until these issues were resolved.
“My view of the gas issue is twofold: First, the Niger Delta crises have not really helped investment in the gas sector of the industry. Most of the gas infrastructure you are likely to have in order to be able to convert these gas and monetise it are supposed to be onshore infrastructure. Now, if you have a very hostile community like we have been in the Niger Delta, I do not imagine that much can be achieved in that area,” he said.
The Eterna Oil boss pointed out that the crisis scare away investors who should build gas-gathering projects and other projects in the area.
“The fear of investors about the hostile environment and of not being able to carry out their businesses and ensure that their investment is secure, have accounted largely for the lackadaisical attitude in terms of investment in the gas sector. Another major problem has been the policy of government itself. We still do not have a very clear policy on gas development in Nigeria,” he added.
According to him, the Gas Act, which is still before the National Assembly, has not been passed, adding that there is no regulatory environment that exists today which gives the operators the comfort and assurance to bring in their investments.
He noted that a regulatory framework is required to assure foreign and local investors that their investments are protected.
Iboyi pointed out that investors could be encouraged in terms of risk of pricing or reliable supply of gas or other concessions that are there to enable them make reasonable returns on their investments in that area.
“We believe that with much government’s determination to sort out this problem, gas flare out can be achieved. But I can definitely say the 2008 deadline set by the government is definitely not feasible,” he said.
Meanwhile, the Flare Reduction Committee set up by the Federal Government meets in Abuja almost on a weekly basis.
The committee is currently working with consultants in the preparation of assessments on the environmental, health and financial impacts of ending or continuing routine Gas Flaring in the country after December 2008.
“The Government and industry remain fully committed to the elimination of routine flaring, and we share responsibility for not achieving bigger results, some progress in flaring reduction has been achieved but it is clearly not enough”, says Minister of State for Energy (Gas), Emmanuel Olatunde Odusina.
“That’s why we have created this Flare Reduction Committee to come up with a road map for elimination of routine flaring within a realistic timeframe, in a joint effort by government, industry and other stakeholders so we can attain bigger gas flaring reduction,” he added.
Most analysts say some of the major inhibitors to a faster gas flaring reduction in Nigeria include: lack of adequate infrastructure to transport the gas, inequitable gas pricing, lack of capital for gas utilization projects, security issues in the Niger Delta, etc.
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