#OTC2017: Nsima Ekere’s Speech | Innovation: Key to unlocking wealth in the Niger Delta
The Niger Delta is one of the most promising locations in Nigeria covering 9 states with a population of about 32 million people, 40% of whom are below 25 years. The region is the focal point for the Oil & Gas region with over 37 billion barrels of proven reserves and numerous other mineral deposits such as granite, barites, marble, clay, gypsum, phosphate rock, feldspar, limestone sand and gravel. Before the advent of Oil the region exported coal, gold, tin, columbite, tantalite, lead and zinc. With over 750,000 hectares suitable for fish/shrimp farming and 500,000 hectares of arable land for farming, the region is a diversified portfolio of opportunities.
For a region with such potential the challenges have been enormous. Over the last 15 years after the return to civilian rule in 1999, the perceived imbalances in wealth distribution led to agitations in the region for a more even distribution, which snowballed into armed insurgency in the creeks, destruction of Oil installations, reduction in production capacity, and eventual cessation of hostilities with an amnesty offer embraced by militant agitators, thereby calming the region.
The Federal Government is continuing its efforts to reposition the Niger Delta as an investment destination not just for Oil & Gas activities but also for investments in agriculture, consumer goods, ICT and other growth areas. Specific policy initiatives targeting the root cause of the agitations in the region are been prepared for rollout by this administration. These will tackle security and law and order, infrastructure, investment in modular refineries and investment in people.
What are the opportunities we see? Gas is a big one. Nigeria is sometimes described as a gas giant with some oil. The country has 192 TCF of proven gas reserves with the potential to develop up to 600 TCF, according to the US Department of Energy. This can provide feedstock for up to 20 GW of thermal power generation and 64 MTPA of LNG for at least 36 years.
To increase our reserves we need to expand the areas for exploration for gas. There are about 200 oil and gas open acreages for allocation across different terrains in the country with 34 blocks located in the Niger Delta that need to be explored further.
In response to the current challenges and in preparation for the emerging new vision for the region, investors are been encouraged in the following areas of opportunity:
- Gas-to-power projects: are required to provide gas for at least 20 GW of thermal power generation over the next 10 years. Investments in exploration, gas gathering and pipeline networks are currently available;
- Domestic LPG market: with per capita consumption of 1Kg compared to Ghana (4kg), South Africa (8.5kg), Egypt (85kg) and Indonesia (24kg), Nigeria is sitting on a lot of latent demand. There are opportunities for investment in production and supply of gas, bulk transportation with shallow draft vessels, bulk storage, inland transportation and distribution, cylinders and accessories and retail outlets;
- Power generation: with an energy deficit estimated at over 5GW, Nigeria needs more power plants, especially if the vision of moving the economy beyond Oil is to materialize. Investments in green-field power plants are required to close this gap and start the industrialization of the economy;
- Agriculture: as of 2016 Nigeria imported about N1.2 trillion ($3 billion) worth of wheat, rice, sugar and fish. With over 750,000 hectares of acreage suitable for fish and shrimp farming, the Niger Delta offers great incentives for investors;
- ICT: with a large youth population, 18 universities and numerous other tertiary institutions coupled with fibre interconnect within the 9 states, the region is open for tech-related investments. We are supporting an ecosystem of tech incubators to prepare the environment for investors.
“The race is not for the swift but who can endure the obstacles and challenges to stay focused in the face of adversity”.
Speech Delivered at the ongoing Offshore Technology Conference OTC in Houston, Texas, USA