Share Gas or be Punished

Nigeria's government on Thursday threatened to impose stiff penalties against foreign oil companies that fail to provide a certain amount of natural gas to the domestic market by the end of the year.

President Umaru Yar'Adua, under increasing pressure to rehabilitate a shoddy power sector, indicated he will soon declare a power emergency that would oblige international oil companies to share more of their gas.

The power crisis is one of the biggest brakes on growth in Africa's most populous country.

"Once the emergency is declared in the power sector, there will be stiff sanctions if they fail to meet their obligations and all of this will be clearly spelled out as pre-conditions for continued operations in our country," Olusegun Adeniyi, the president's spokesman, told reporters.
Nigeria warned that it could penalise oil firms via their exports if they do not abide by their domestic requirements.

"We have told ... Shell, Chevron, Agip and all the gas-producing companies the amount of gas they must supply to us before they can even export the gas," said Gas Minister Emmanuel Odusina.

He declined to elaborate on the specific requirements imposed on the oil companies
Nigeria's power problem has become so severe that much of the country goes without mains electricity for weeks, plunging neighbourhoods without private generators into darkness every night and heightening frustration among its 140 million people.

This is despite Nigeria having the seventh-largest gas reserves in the world, estimated at about 180 trillion cubic feet.

Nigeria's generation capacity has plunged to less than 1,000 megawatts from 3,000 MW a year ago, largely due to a lack of maintenance at power stations. South Africa, with a third of Nigeria's population, has over 10 times that capacity.

(Reuters)