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Shell has disclosed that Nigeria is facing intense competition for investments in the oil and gas industry. According to Marno de Jong, Senior Vice President Nigeria at Shell, “We welcome the reforms by the Nigerian Upstream Petroleum Regulatory Commission, which have already improved crude oil production to about 1.75 million barrels per day as reported by the agency”.
De Jong emphasized that sustained reforms will boost production and generate better returns in the entire value chain of the industry. “Shell is determined to support the reforms as part of our general commitment to the development of Nigeria, dating back to over 60 years of operations in the country,” he noted.
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The reforms in the oil and gas industry have gained momentum following the enactment of the Petroleum Industry Act in 2021. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) aims to improve oil and gas production and reserves, achieve cost efficiency, and ensure stability in host communities through various initiatives.
De Jong highlighted that Nigeria is in stiff competition for capital and confidence. “Attracting the attention of investors will require a continued rethink of strategies and policies,” he said. “This will enable the country to leverage enablers like technology, cost efficiency, and manpower to ensure business growth and sustainability through the operations of international oil companies and independent producers.”
Ralph Gbobo, Managing Director of Shell Nigeria Gas, emphasized the importance of infrastructure development to promote the growth of domestic gas and monetization of the resource. “Infrastructure is the bedrock of a thriving gas industry,” he said. Gbobo cited the Escravos-Lagos Pipeline System as an example, which feeds the domestic gas market.
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Gbobo stressed that implementing regulations, such as the Network Code, and maintaining a stable network are crucial for attracting investors. “If we can fully implement our regulations… and maintain a stable network where investors can get their returns, I can guarantee that we will see more players come into this space,” he said.
Shell companies in Nigeria have invested across the entire gas value chain, recognizing the potential of gas to accelerate industrial and economic growth in Nigeria. The Shell Nigeria Gas (SNG) has led the way in providing gas infrastructure in Nigeria, building gas distribution systems in Rivers, Abia, and Ogun states.
According to Ralph Gbobo, Managing Director of Shell Nigeria Gas, “Our experience at SNG shows that the task of expanding the Nigerian domestic gas market is a collective responsibility and not to be done by just a few players. It requires inputs from the regulatory, upstream, midstream, and downstream sectors.”
Gbobo emphasized the importance of driving and implementing the right policies to unlock the potential of the domestic gas market. “The key to unlocking all these inputs is driving and implementing the right policies. The implementation of clear policies and incentives allows for more investors to come into the domestic gas market, be it in terms of gas production or infrastructural development. Investors must be assured of a stable regulatory and fiscal market where their investments are guaranteed,” he said.
Last year, Shell Nigeria Gas signed an agreement with the Oyo State Government to build a gas distribution infrastructure to deliver gas to businesses in the state and beyond. This project is expected to boost economic growth and development in the region.
In conclusion, Shell’s commitment to supporting the reforms in Nigeria’s oil and gas industry and investing in the development of infrastructure to promote the growth of domestic gas is a positive step towards unlocking the country’s economic potential.
As Marno de Jong noted, “Nigeria is in stiff competition for capital and confidence, and attracting the attention of investors will require a continued rethink of strategies and policies.” With Shell’s continued investment and commitment to Nigeria’s oil and gas industry, the country is poised for growth and development in the sector
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