Mr. Mike Sangster, Managing Director/ Chief Executive and Country Chair, Total Companies in Nigeria
Total E&P Nigeria Limited is one of the successful International Oil Companies (IOCs) in Nigeria with focus in the energy value chain. The company is the only IOC left operating in the country’s downstream space with various projects to its credit.
The Managing Director/ Chief Executive and Country Chair, Total Companies in Nigeria, Mike Sangster, disclosed at the Nigerian Association of Petroleum Explorationist (NAPE) Management Session that Total is the only fully integrated oil and gas company, involved in the growth of all streams of the industry: upstream, midstream and downstream.
Sangster spoke on the topic “Gas Monetization in Nigeria – Need for Concise Strategy.” He said the ambition of the IOC is to become a “Responsible Energy Major” which is the meaning of its motto “committed to Better Energy”. This ambition challenges the multinational to provide more reliable, affordable and clean energy to the world’s growing population.
Sangster extolled NAPE’s conference which brought together petroleum experts, business leaders, investors, academics, and other players in the Nigerian oil and gas industry.
The Total boss submitted that “Nigeria is Africa’s top oil producer and when industry experts assemble in Nigeria to discuss any aspect of the oil and gas business, it’s definitely a very good idea to join that conversation.” This is evident in the quality of industry leaders and experts assembled in the conference especially at the Management Session.
The Total Group has been present in Africa for more than 80 years and has been involved in exploration activities in Nigeria for 57 years. The company has a broad and diversified portfolio in Nigeria, with activities spanning onshore, conventional offshore, deep water and Liquefied Natural Gas (LNG). Total has developed a strong partnership with the Nigerian National Petroleum Corporation (NNPC) and other partners.
Speaking further at the Management Session, Sangster said, Total’s upstream branch plays a significant economic and social role in Nigeria, operating nearly 15% of the country’s production. “Nigeria, as one of our core areas of activities, is also crucial to the Total Group, accounting for 12 % of its equity production. In the last five years, Total has invested approximately 10 billion US dollars in the country”, Sangster added.
The Total Managing Director and Country Chair said the company is proud to be associated with NAPE, which is the largest professional association of petroleum geologists and related disciplines in Nigeria and indeed Africa. NAPE is a very important part of Total. Its staff have occupied senior positions of responsibility in NAPE and continue to do so because the company identifies with the ideals and objectives of this important and strategic professional association.
Total shares the concern and commitment of the global community on global warming, which is why the company came up with a strategy to vigorously expand its presence in the gas sub-sector. Natural gas is a growing market for the future. Natural gas is twice as clean as coal for generating power hence the company is going after it for both environmental and business reasons.
Sangster revealed that Total has achieved 100% gas flare out on its Ofon Field in December, 2014 and the gas is currently monetised. In 2015, Total E&P Nigeria received the World Bank – Global Gas Flare Reduction Partnership (GGFR) Excellence Award. This is a major milestone in line with the aspiration of government, which is why its Ofon flare out achievement has been proposed as part of Nigeria’s Nationally Determined Contribution (NDC) to greenhouse gas emissions reduction. The company is committed to achieving zero flaring in all its operations.
Similarly, Total flagship deep water Egina Field, which came on stream in December 2018, was also commissioned with zero flare out and has added 10% to Nigeria daily oil production. In fact, since 1999, all Total projects in Nigeria are sanctioned on a no-flaring policy.
The Total MD recalled that in 2016, the NNPC -Total E&P Nigeria Limited joint venture commenced the supply of gas to Alaoji Power Plant in Abia State. This became possible after the completion and start-up of Obite-Ubeta-Rumuji (OUR) Pipeline and the Northern Option Pipeline projects by the NNPC/TEPNG JV in August 2016. The completion of these pipelines is an important milestone in the activities of Total in Nigeria. The NOPL is unique and strategic in meeting the federal government’s objectives of gas supply to the domestic market.
Sangster said Total partnership with NLNG is well known. Total is an NLNG partner with 15% stake in the company, which has a liquefaction capacity (Trains 1- 6): 22 MT/Y of LNG. But the planned Train 7 will increase NLNG capacity from 22 to 30 MTPA.
Explaining to participants at the Management Session of NAPE, Sangster opined that Total is committed to the Nigerian Gas Master Plan – reducing flaring and monetizing gas. The IOC is committed to the supply of additional gas to NLNG train 7 for increase of NLNG capacity. It has signed three Gas Supply Aggregation Agreements (GSAA) and takes its domestic gas supply obligations under these agreements quite seriously.
However, Sangster said the company is aware that challenges remain in the areas of infrastructure; legal and regulatory framework; commercial framework (pricing policy) via the National Domestic Gas Supply & Pricing Regulations of 2008 vis-à-vis the new National Gas Policy approved by the Federal Executive Council (FEC) in 2017.
There is also the question of funding mechanisms for the sector because the public is in the know that investments in PSC oil projects are recovered from oil but no mechanism is currently agreed for cost recovery or profit sharing for investments in gas projects.
The Total MD advised stakeholders and operators including speakers and panelists to engage in robust and rigorous discussions such that will address some of the well-known challenges to gas monetization in Nigeria. There is urgency of the need for a harmonised strategy.
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