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Shell asks Nigeria to pay $1.3b debt to gas producers

Shell Petroleum Development Company (SPDC) of Nigeria, Managing Director, Mr. Osagie Okunbor, urged the Federal Government to settle the $1.3billion debt owed gas producers.

Speaking with reporters on the sidelines of stakeholders' consultative meeting in Abuja involving international oil companies (IOCs), oil marketers, gas producers, among others, on Tuesday, he lamented the impact of the debt on their business.

There has been a reduction in electricity generation in recent weeks owing to gas constraint.

Okunbor however said, due to the huge debt overhang, no businessman would want to commit additional funds into the country's gas initiative.

He said: "At the last count we are owed about $1.3billion for gas that has been produced and sold in the past. If you are owed that kind of money across board, you can imagine the impact. I work for Shell and my colleague here with me works for Chevron, and I think between us we are owed probably the largest share of this.

"So it doesn't create the environment for you to want to put in more and it is a key issue for the Decade of Gas discussions that we are having. How do we crack this problem so that you incentivise people to make investments.

"How do we build the infrastructure? You heard the minister talk about key infrastructural projects that are under construction such as the AKK (Ajaokuta-Kaduna-Kano pipeline project) and others."

Meanwhile, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said the Federal Government is implementing measures that will reduce the price of Liquefied Petroleum Gas, otherwise called cooking gas.

According to Ekpo, the Federal Government had decided to focus on three priority areas to ensure sustainable development in the country's gas sector.

He said: "We will intensify efforts to increase upstream gas production, to bridge the significant gas supply gaps which continue to hamper our strategic economic sectors (gas to power and gas-based industries, as well as gas for export).

"It is imperative that we work together to unlock more resources to provide gas for power, gas-based industries, LNG export, and domestic use, fostering economic growth, ensuring energy security and eradicating poverty, which is a cardinal objective of President Bola Tinubu’s Renewed Hope Agenda.

"We will prioritise the domestication and penetration of LPG and implement measures to significantly reduce the price of cooking gas for our people, ensuring it becomes more accessible, available, and affordable for our citizens."

Ekpo further stated that "we are dedicated to the completion of major gas midstream infrastructure and projects, including the AKK Gas Pipeline Project, the OB3 Gas Pipeline Project, and the ANOH Project, as well as enabling flagship projects like the Brass Methanol Project, to enhance the efficiency and capacity of our gas sector."

He described Nigeria as one of the leading gas-rich countries in the world but had yet to unlocked the full potential of this valuable resource.

"This underperformance can be attributed to issues such as gas flaring, inadequate infrastructure, pricing concerns, policy and regulatory gaps, limited funding, environmental concerns, the growing urgency for a smooth energy transition as well as a lack of comprehensive gas development blueprint.

"It is my belief that by acknowledging these realities, we can proffer solutions. I am confident that the discussions and deliberations over the course of this engagement will not only lead to developing a comprehensive roadmap but will also strengthen the bonds between the public and private sectors.

"Together, we shall overcome challenges, unlock opportunities, and build a gas sector that stands the test of time and provides our nation the platform to be the regional industrial hub and powerhouse it is meant to be," Ekpo stated.

Heads of stakeholders bodies that were at the meeting and made presentations included; Oil Producers Trade Section (OPTS), Independent Petroleum Producers Group (IPPG), Nigerian Gas Association (NGA), Nigeria Liquified Petroleum Gas Association (NLPGA), Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), Liquefied Petroleum Gas Retailers (LPGAR), Independent Petroleum Marketers Association of Nigeria (IPMAN) and Association of Local Distributors of Gas (ALDG) among others.