BEING A KEYNOTE ADDRESS BY TONY ATTAH, MD/CEO NIGERIA LNG LIMITED AT NIGERIA LPGA & LPG SUMMIT 2019, ON 27TH NOV, 2019 AT FEDERAL PALACE HOTEL, LAGOS
Captains of industry, eminent Nigerians, distinguished ladies and gentlemen,
I feel privileged to speak to this outstanding industry group about the critical issue of our development and growth as a nation in Africa.
Conversations about Nigeria’s development generate several models and theories on the way forward without commensurate action to achieve the stated goals.
Our nation has enormous human and vast natural resources that should instigate and even sustain our development and growth, but these conversations have persisted because we are yet to get there. The question then is, what do we need to do to get there? Intuitively, I agree with the theme of this summit that we need to harmonize our resources to get to our desired destination.
NIGERIA’S ECONOMIC TRENDS
This country has a long history of transitioning from one notable economic strength to another, starting from the era when agriculture was the mainstay of our national income, accounting for 64.5% of export earnings and an average of 57% of the Gross Domestic Product (GDP) in the 1960s.
At that time, our nation was notable for exporting cash crops such as rubber from the south-south region; groundnut, hides and skins from the northern region; cocoa and coffee from the western region; and palm oil and kernels from the eastern region of the country.
Nigeria’s groundnut pyramids and the massive cocoa plantations which carved an identity for the country before the advent of crude oil soon dwindled and became history on the pages of textbooks as the discovery of crude oil in 1951 and the eventual commencement of production in 1957 marked a new era for our economic development.
ADVENT OF CRUDE OIL
By 1960, the year of our sovereignty as a nation, we had recorded the export of about 847,000 tonnes of crude oil and ever since, Nigeria has been recognized globally as the tenth most petroleum-rich nation, Africa’s largest oil producer and by far the most affluent in the continent.
This transition came on the back of the quest for more efficient source of energy or fuel to power industries around the world. Most of us here may be conversant with the transition from the era of coal which was also significantly abundant in Nigeria’s Eastern region to the era of crude petroleum product as more efficient fuel. That was the quick win for our nascent economy which blossomed with the oil boom in the 1970s.
The world has since gone in search of alternative energy sources; not just for efficient fuel, but for cleaner sources of energy.
For instance, by 2010, Nigeria supplied over 10% of U.S. crude oil imports and ranked as the fifth-largest source for oil imports in the U.S, but that changed by 2014 with America’s shift to Shale production as a better alternative. Nigeria lost that market share and the trend is growing around the world as more and more countries are exploring and embracing better alternatives. This is happening even among crude oil exporters.
Today, India stands as the largest consumer of Nigerian oil, a situation that foreshadows the end of another dispensation in our economic advancement.
NATURAL GAS ERA & NLNG
The good news however, is that the world transitioned from crude oil to natural gas and our nation, thanks to nature is richly endowed with natural gas estimated to be three times as substantial as our crude oil reserves.
Clearly, that makes Nigeria a gas nation with reasonable amount of crude oil.
Without delving into other valuable assets that can be utilized to drive our development and growth as a nation, the theme for this summit points to a compelling need for every stakeholder to explore effective ways to harmonize our national resources to drive our advancement.
We have the comparative advantage in the global energy sector to reap all the dividends that the market offers. For instance, in the global crude market Nigeria’s oil is dubbed “light” and “sweet”, as the oil is largely Sulphur-free, and thus, the preferred option.
Recognising the advantage of our vast natural gas resources also, Nigeria LNG (NLNG) is determined to change the narrative about Nigeria and Africa by setting a world-class pace through our business model built on integrity, professionalism and reliability.
We are a solid and proud Nigerian brand at home and abroad, quietly and successfully competing globally, thus paving the way for other Nigerian brands and companies to be taken more seriously on the world stage.
This is the result of keen devotion by our 100% Nigerian Management Team and 95% indigenous workforce, to build a success story in a high-tech industry that is obtainable in the advanced nations of the world.
Our sustained success in 20 years of operation and 30th year of incorporation (the anniversaries which we proudly commemorated this year) as the LNG giant in sub-Sahara Africa, is indicative of the fact that as a nation, we can achieve whatever we set out to do towards our development and growth if we, indeed, are commit to it.
As the foremost natural gas exporter in the country, helping to power industrialized nations of the world, Nigeria LNG has a vision of being a global LNG company, helping to build a better Nigeria. I expect that everyone in this auditorium should have similar sense of commitment as well, because, in the long run, growing our businesses translates into growing our economy as a nation.
NLNG’S CONTRIBUTION TO THE ECONOMY
Towards actualizing our vision of helping to build a better Nigeria, NLNG has spent over $200 million on Corporate Social Responsibility (CSR) projects in the Niger Delta and the country as a whole. Recently, Nigeria LNG committed to paying 50% of the cost of construction of the N120 billion, 38 kilometer Bonny-Bodo road to link its host community, Bonny Island to the main land and Rivers State capital, Port Harcourt. The road when completed is expected to open up opportunities for rapid socio-economic development of the area and impact on the lives of the millions of Nigerians living in Bonny Island and neighbouring Niger Delta communities including Ogoni, Okrika, Eleme and Andoni.
To-date, our six-train plant has generated more than US$100 billion in revenue and has paid over US$16 billion dividends to the Federal Government of Nigeria, through the Nigerian National Petroleum Corporation (NNPC)’s 49% shareholding in NLNG.
Nigeria LNG has paid a total of over US$6 billion in taxes comprising of Companies Income Tax, Tertiary Education Tax, Withholding Tax, Value Added Tax; and other payments to Government including PAYE, state and local government taxes, as well as regulators’ levies and fees totalling over N51billion.
We have also paid over US$13 Billion to the Federal Government of Nigeria for feed gas purchases
Our operation has helped to reduce about four trillion cubic feet of previously flared natural gas thereby improving Nigeria’s gas flaring profile from about 65% percent in 1999 to less than 25% today.
OUR LPG INTERVENTION
We have also undertaken the role as a major influencer of the domestic LPG market in Nigeria, dedicating 350,000 metric tonnes of LPG to the market; an effort that focuses on deepening the penetration of cooking gas to support environmental and human protection through the use of cleaner energy.
Early in the month, we commenced the direct supply of LPG in Port Harcourt, the Rivers State capital. Our aim is to ensure product availability, accessibly and affordability. The company has recently began to explore the possibility of delivering LNG in addition to the LPG to the domestic market in line with the Federal Government’s aspirations on gas based industrialization in Nigeria. With product availability and accessibility, we expect that more people will be employed in the value chain from the off takers to the major distributors and eventually retail outlets that get the products into the nooks and crannies of the nation. Ultimately, more and more Nigerians will begin to appreciate the value that cooking gas has over other unhealthy cooking fuels and they will embrace the commodity.
EXPANDING OUR OPERATIONS
Our focus is to ensure that Nigeria does not miss out on the opportunities for more economic growth, and for a more central role in the global energy supply field. To this end, Nigeria LNG is set to take final investment decision (FID) to increase its production capacity through its Train 7 expansion project.
Actualisation of Train 7 will re-assure the world that Nigeria LNG is a leading and reliable supplier of LNG with the increase of our production capacity by 35% from 22 Million Tonnes Per Annum (MTPA) to 30 MTPA. The increase will further boost the country’s GDP significantly.
The Train 7 project will bring immense benefits including immediate employment opportunities for more than 10, 000 Nigerians, and will attract foreign direct investment of about US$25b to the country.
It will be a great achievement if such achievements can be replicated across the country as we believe the country has the resources, but need the industrial will-power by the private sector to make it happen, even if it happens gradually, but steadily. The onus is on those of us in the private sector to find ways to independently or collaboratively help the public sector to reinforce our growth.
As a visionary company, Nigeria LNG’s projection in the next 30 years is to achieve and maintain top quality performance in the LNG industry. This way we will ensure we continue to deliver for our staff; shareholders and stakeholders as well as inspiring a whole new generation of Nigerians to believe that they each can conquer the world in their spheres of endeavour.
We will also continue to support the advancement of our people and the Nigerian society through our sterling CSR initiatives some of which include our commitment to the Bonny-Bodo road project, our top rated Nigeria Prize for Literature, and the Nigeria Prize for Science, our three tier scholarship initiatives, to mention but a few.
Keeping up with our success rating at home and abroad promises to be of great economic benefit to the nation’s development and growth and it behooves all captains of industry here present and in the country to ensure that our operations benefit not just their investors, but also our nation.
Nigeria needs our commitment to initiatives that support national development and growth. The theme of this summit requires us to harmonize our resources and assets with our needs – development and growth. That is what we should focus on. LPG is a valuable resource especially in view of the growing conversation about combating global warming with the use of cleaner fuel. We must explore avenues that enable us to maximally utilise this resource to drive our industries, our homes and save our environment from pollution and desertification caused by the use of wood for cooking and other bio-degradable.