Nigerian joint venture hailed
June 28, 2009
Nigeria's joint venture with OAO Gazprom would help boost the its earnings from natural gas, said Mohammed Barkindo, the chief executive of Nigerian National Petroleum.
Gazprom, Russia's gas export monopoly, on Wednesday signed an agreement in the capital, Abuja, to form a firm called NiGaz Energy that will invest in gas production, transportation and infrastructure in Nigeria.
"This is a laudable feat that will go a long way to monetise Nigeria's huge gas reserves as well as boost the revenue base of the country," said Barkindo.
Nigeria has been seeking to diversify the sources of its income in an attempt to reduce shocks caused during periods of low oil prices. Revenue from crude declined to $1 billion (R8bn) in January from a monthly average of $2.2bn last year as a result of lower prices and fighting in the Niger Delta region, said Remi Babalola, the Minister of State for Finance.
Oil exports from the country, Africa's largest producer, have been cut by more than 20 percent since 2006 as a result of the fighting.
Crude made up 37 percent of the gross domestic product in sub-Saharan Africa's second-largest economy after South Africa, 83 percent of fiscal revenue and 98 percent of exports, Babalola said.
Nigeria has the largest gas reserve on the continent and is the world's seventh-largest producer. In addition to known reserves of 187 trillion cubic feet, there may be undiscovered gas of between 150 trillion and 400 trillion cubic feet, Petroleum Minister Rilwanu Lukman has said.
The government also plans to use gas to triple electric generator capacity to 10 000 megawatts by next year and pipe the cleaner fuel through the Sahara Desert to consumers in Europe. - Bloomberg
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