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The Chairman of the International Law Association (ILA), Dr. Tolu Aderemi, has discussed how Nigeria could seize opportunities arising from the Russia-Ukraine conflict to establish itself as a leader in the liquefied natural gas (LNG) sector.
Prior to the crisis, Russia held approximately 40 percent of the LNG market in Europe.
However, the explosions of Nord Stream 1 and 2 in 2022, along with other incidents, severely disrupted supply from Russia, prompting the United States to significantly boost its own LNG exports to fill the gap.
Experts suggest that, if not for Nigeria's inadequate investment in crucial infrastructure, the nation could capitalize on this situation to become a prominent player in the LNG market.
Aderemi spoke at a gathering of energy stakeholders organized by Perchstone & Graeys, a law firm, to discuss persistent challenges faced by Nigeria's energy sector.
The event, led by Aderemi, who is a partner overseeing the law firm’s Energy Group, was themed ‘Digitisation: A Catalyst for Energy Transformation in Nigeria’. Notable speakers included former minister of state for petroleum, Prof. Emmanuel Kachikwu, Dr. Yusuf Ali, a commissioner at the Nigerian Electricity Regulation Commission (NERC), and other prominent local and international private sector representatives.
In his opening remarks, Aderemi pointed out that the ongoing conflict between Ukraine and Russia, along with the European Union's move to phase out LNG imports from Russia, offers Nigeria a significant opportunity that the country seems to overlook. He mentioned that Nigeria has generated around $21 billion from its energy sector over the last two decades, particularly in the LNG market.
Aderemi expressed concern that Nigeria, despite being Africa's largest oil producer, continues to encounter various challenges in its energy sector, including theft, vandalism, and systemic inefficiencies.
He highlighted that according to the Nigerian National Petroleum Company (NNPC), oil theft results in losses of approximately $1.5 billion each year, adversely affecting the nation's capacity to meet its production targets as set by the Organisation of the Petroleum Exporting Countries (OPEC).
Nigeria has struggled to maintain its production levels and often falls below its OPEC quota of 1.8 million barrels per day (mbpd).
At present, Nigeria only contributes four percent to the EU’s LNG market, with stakeholders stressing the urgent need to increase this share.
Aderemi cautioned that if Nigeria does not effectively tackle issues of theft and vandalism, it may lose its chance to secure a significant position in the European energy market, stating, “This is a pivotal moment for Nigeria. We cannot afford to lose this market share.”
In his keynote speech, Kachikwu reflected on government initiatives to address oil theft and emphasized the necessity of leveraging technology to boost production capabilities.
He expressed optimism that with the right strategies and technology, President Bola Tinubu's administration could reach its ambitious goal of producing two mbpd. Ali, a commissioner at NERC, shared insights into government efforts aimed at curbing theft in the electricity sector, citing the Electricity Act and accompanying regulations designed to improve security and efficiency.
“The government is committed to reducing theft incidents in the electricity sector. However, we must also explore the integration of effective technology that can ease the burden on the national grid,” he noted.
The panelists unanimously recognized the importance of adopting sophisticated technological solutions to address these challenges.
