Nigeria: Shell Says Multiple Regulations Frustrating Investment Decisions In Nigeria

…..Forced To Shut Down Power Turbines Due To Transmission Constraints

Yemisi Izuora

Oil major, Shell has seriously complained that it has problems taking investment decisions owing to Nigeria’s unregulated environment.

The company also observed that dearth of infrastructure and improper alignment of the nation’s power sector value chain is creating inefficiency to its power generating plant.

Mr. Vincent Chukwueke, who represented Mr. Philip Msheliba, general manager (Gas), Shell Petroleum Development Company, SPDC, at the just concluded Natural Gas Business Forum organized by the Nigerian Gas Association, NGA, in Lagos, disclosed that due to transmission sector failure most times the firm is asked to shut one or two of its power turbines.

He said Shell is involved in power generation, deepwater oil exploration and Liquefied Natural Gas production, but often frustrated by several environmental challenges and legislation issues.

“In some cases where we have 4 turbines due to transmission constraint we are asked to shut down down one or two, so it frustrates investment and moving the sector forward because the turbines are made to run consistently and generate power at installed capacity”, he said.

In the upstream area, Msheliba said the company is into Joint Venture partnership with government and other operators and so in taking investment decisions, all partners are expected to make input adding that in the face of all the seeming challenges, the company carries out due diligence and considers possibility of economic return before making any decision.

For instance, he said it may not be profitable to venture into the gas project because the commodity is sold in advance.

He also urged that pricing of gas should be revisited so that investors should be encouraged as the domestic market is currently starved of gas. “We need to address the security of critical infrastructure because we have had experiences with the Forcados which has impacted local gas production.

Msheliba also advised that efforts should be made to resolve the power sector insolvency, huge debts settled and key power projects funded, tariff reviewed now that funding in the upstream sector is firming up.

Add Comment