The Osita Izunaso led Senate Committee on Gas paid a working visit to NAPIMS and the JV Companies recently. The Chairman described the visit as a partnership between NAPIMS and the
National Assembly to foster the good of the nation. Their primary objective was to find out the performance of the 2007 budget on gas and the thrust of the 2008 budget in view of the fact that
gas is in the front burner in the global energy market. He further stated that such first hand information would help them to be better equiped in appropriating the budget and also enacting the enabling legislation on gas.
In her presentation, NAPIMS stated that total revenue from crude oil and gas as at September 2007 stood at
$18,233.34 billion while the projection for 2008 stands at $20.9 billion. The distinguished Senators however raised issues about what they called the dismal performance of gas in the previous year and wondered what could be done to improve on the record.
NAPIMS explained in details that unlike oil, the development of gas requires a long gestation period. The
need for a secure market of not less than 25 years is also a major factor as gas is not storable unlike oil. Poor pricing mechanism is also another factor that has hampered returns on investments in the gas sector.
The honourable members also wondered why Nigeria has not acquired the capacity of developing major projects rather than engaging in Joint Ventures.
NAPIMS however explained that the arrangement is inevitable because of the huge funds and enormous risk involved in oil exploration. With the joint venture in place, the government is relieved of the burden of solely financing the projects and bearing the risk of non discovery. Beyond the Joint Ventures, there are also the Production Sharing Contract, the Service Contract, the Alternative Funding Arrangement and the Indigenous.
The distinguished Senators sought to know the efforts being made to harness gas in the frontier regions and the Benue trough. Responding, NAPIMS highlighted some of the activities that have taken place in the various Basins over the years which are now being reviewed and where necessary further studies being carried out in order to find better ways of realizing Government objectives.
The Committee Chairman informed that more funds had been allocated for further studies to be carried out in the Basins. He enjoined NAPIMS to be proactive and learn to partner with the Legislature when taking major steps, they are poised to review critically all major issues in the oil and gas sector.
The Group General Manager, NAPIMS Dr. M. K. Baru expressed profound gratitude to the Senators for
finding time in their schedule to visit NAPIMS. He pledged the readiness of NAPIMS to respond to them
whenever called upon. He seized the opportunity of their visit to request for a better accommodation
for the NAPIMS staff who have been working under unsafe work conditions for several years. Dr. Baru was represented at the occasion by A. Y. Gumai - General Manager, Services. “A receptive face is better than a red carpet reception” the senators stated, while appreciating NAPIMS Management and staff for their warm reception.
