Philip Mshelbila, Managing Director and Chief Executive Officer, Nigeria LNG, has warned of the harmful effects of illegal oil bunkering and refining on the nation’s oil industry.

Speaking as a member of a seven-man panelist at the day-two of the ongoing Nigeria Oil and Gas, NOG, local Content Conference 2022, in Lagos, Mshelbila said: “We have people who are participating in this activity, masquerading as though this is a community problem, and pretending to be immature modular refineries. That is not the case, this is criminality, its outright criminality, and it needs to be dealt with as such.”

He described oil theft and illegal bunkering as the major challenges mitigating against the full utilization of Nigerian oil and gas capacities.

According to him, even though there are many factors hindering Nigeria’s capacity to fully exploit its potential in the industry, the biggest one of them is crude oil theft and if not addressed, Nigeria will not get out of the present quagmire that it is in.

“This problem is gradually strangling our industry, and if we don’t fix it, it is the parasite that is going to kill its host,” he warned.

He noted that although the decade of gas mandate requires that 60% gas produced is retained for the local market, the reality is that 70% of the produce is exported because the local value chain is not working, and called on all relevant parties to sit and look at what needs to be done.

On the commercial side, Mshelbila said that the market, which is deregulated should be done in transition.

Although he noted that the NLNG has embarked on a decarburization process as a way of reducing the plight of people living in the oil producing areas by embarking on hydrogen production because according to him, the future is not necessarily natural gas, but hydrogen will also play a crucial role.

He also said that the challenges in the industry could only be solved through collaborative efforts.

He added that God has blessed Nigeria with enough natural resources; it is up to her to develop it.

In his contribution, E.D. Ubong, President, Nigeria Gas Association added that although the country has made some progress, it is currently experiencing gas scarcity leading to the high cost of the product.

According to him, the LNG boss may not want to mention it, but it is also looking for gas to export.

“Every sector you look at, export is the same story, which is the reality of where we are today.

“There is not enough gas for cooking, so the cooking gas price has gone up, there is not enough gas to fire the plants, so there is virtually no electricity,” he said.

“We are used to fuel scarcity, but we are also facing gas scarcity, and we all need to come together, there is a focused thing to do in the decade of gas, looking at how we are going to unlock it for the domestic market and for export.

He expressed optimism that Nigeria’s LPG demand will move to 10 million tonnes per annum.

“We need to manufacture those cylinders, we need gas moving in the line of local demand and unlink it to export so that people can afford it,” he said.

The panelists session centered on discussions around identifying the challenges of effectively implementing gas policies, the strategies that must be in place to ensure the effective implementation of these gas policies, how the Nigerian energy industry can open opportunities with floating LNG in the face of growing global demand, the levers that can enable the liberalization of the domestic gas market, as well as the investment and development opportunities arising from the expected operation of the AKK pipeline.

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