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Nigeria: Seplat and Ardova herald the new gas era

By Nicholas Norbrook
Posted on Thursday, 6 January 2022 12:51

President Buhari signs into law the Petroleum Industry Bill in August 2021
President Buhari signs into law the Petroleum Industry Bill in August 2021/REUTERS

A new policy landscape in Nigeria is being seized on by home-grown companies to supply gas to the growing local market, on a retail and industrial scale. Companies like the London-listed Seplat and the inheritor of BP's assets in Nigeria, Ardova, are well placed to benefit.

There is an old saw about Nigeria’s energy sector: while it has been pumping oil for decades, it is really a gas giant, with a relatively small amount of oil in tow.

Certainly, with gas assets of more than 200 trillion cubic feet (tcf), Nigeria is the eighth-­largest natural-gas reserve on the planet, coming just after the United Arab Emirates’ 215tcf.

“That is the paradox this administration decided to confront when we declared the Decade of Gas in Nigeria,” announced President Muhammadu Buhari in March. He said that gas development and utilisation “should be a national priority to stimulate economic growth, further improve Nigeria’s energy mix, drive investment and provide the much-needed jobs for our citizens.”

That gas will come in useful to fix Nigeria’s Achilles’ heel: the country has the highest energy costs in the world, at $0.52/kWh, according to consultancy Wood McKenzie, since much of it comes from small diesel generator sets.