Dr Ernest Azudialu-Obiejesi, the Group Managing Director of Nestoil Group, has called on the Federal Government to allow market forces to determine the cost of gas to encourage investment in the sector.
Azudialu-Obiejesi gave the advice at the ongoing Nigerian Oil and Gas Conference in Abuja.
He said that the regulation of the sector was discouraging investment and negatively affecting the country’s power generation.
Azudialu-Obiejesi, who was represented by Mr Chukwueloka Umeh, the Executive Director of Nestoil, said that a willing-buyer-willing-seller scenario would open up the sector for sub-sectors such as power to thrive.
He expressed regret that Nigeria had continued to generate less than 4,000 megawatts of power in spite of it being the 9th largest country with proven gas reserves in the world.
“For instance, South Africa without Nigeria’s natural gas reserves produces over 40,000 megawatts of electricity for a population of only 57 million people.
“Nigeria’s power deficit will not improve if the government does not take the drastic step of completely allowing market forces to determine cost of gas.
“A willing-buyer-willing-seller scenario that allows gas producers to sell to off-takers at commercially viable rates is what will encourage investment in the gas sector,” he said.
Azudialu-Obiejesi said the successful deregulation of the telecommunications sector in Nigeria was a good case study that the oil and gas industry should emulate in order to stimulate growth in that sector.
According to the Nestoil group managing director, the telecoms sector is growing in Nigeria because the government has relaxed its regulations to allow competition to drive rate prices and products being offered.
He also called on Federal Government to invest more in gas infrastructure rather than crude oil because the world had embraced cleaner forms of energy.
“Many countries in Europe are at the forefront of this energy revolution and with time, African countries including Nigeria, will be dragged along.
“It is time now to embrace the shift and change Nigeria’s energy focus squarely from crude oil to gas,” he said.
Azudialu-Obiejesi gave the example of China which significantly turned around its fortunes in over 20 years by investing in power and other infrastructure.
He said the primary catalyst for China’s growth was the country’s strong stance on investment in robust infrastructure.
“With these power plants that run primarily on coal, China is able to produce goods at competitive prices,’ he said.
