• Friday, July 12, 2024
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Nigeria’s LNG sales fell 18% to N622bn in first quarter of 2023

$1.3bn owed to IOCs halts new gas investments

Nigeria earned N622 billion from exporting Liquefied Natural Gas (LNG) in the first quarter of this year, the lowest in five quarters according to a new government data and analysts blame security challenges.

According to the National Bureau of Statistics (NBS), Nigeria’s LNG sales dropped by 18 percent from 757 billion in the third quarter of last year.

“Incessant attacks on oil and gas facilities, the rising cost of oil and gas production, need for newer drilling technology, and community issues reduced the amount of associated gas, which serves as feed gas for LNG companies to purify, liquefy and ship for export,” said Olufola Wusu, partner and head of oil and gas at Megathos Law Practice.

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“Other reasons include the migration from onshore to deep Offshore fields by the IOC’s, the maturity of the fields leading to a decline in output, the seeming unwillingness to drill new wells, and the initial delay in setting up a bid process to allocate new oil and gas blocks.”

Wusu added that the delay in expediting drilling for non-associated gas, in natural gas wells in the prolific deep offshore fields also contributed to the dip in natural gas sales.

According to NBS, Nigeria earned N622 billion, N704 billion, N757 billion, N735 billion and N655 billion in Q1 2023, Q4 2022, Q3 2022, Q2 2022 and Q1 2022, respectively. The report also stated that natural gas sales account for 9.59 percent of the total export share in the first three months of this year.