Oil & Energy

OGFZ And The Challenges Of FDI In Nigeria

Published

16 years ago

October 10, 2010

The Federal Government of Nigeria recognizes trade as the driving force of the economy. For this reason, it has developed a national trade policy aimed at keeping pace with global trends and standard in the facilitation of commerce and industrial activities across borders.

To showcase its vast potential in the energy sector for investment opportunities in the country, the Federal Government established the Onne Oil and Gas Free Zone Authority (OGFZA), in Eleme Local Government Area of Rivers State, as an investment promotion agency saddled with the responsibility of attracting direct foreign investment into the oil and gas sector of the nation’s economy.

With about 37 billion barrels of crude oil reserves and 187 trillion cubic feet of natural gas reserves, Nigeria has a vast energy resource base. This is why it is seen generally as the single largest market in the Sub-Saharan Africa.

The Onne OGFZ is therefore, a tax-free centre for the processing, manufacturing and assemblage of goods, which ultimately encourage the acquisition of skills, promote transfer of technology, boost local content development, enhance foreign exchange earnings, and facilitate backwards integration of the country.

Indeed, the Onne OGFZ falls under the jurisdiction of the Federal Ministry of Commerce and Industry, and is expected to leverage incentives from the ministry to attain its set objectives. But the question is: Has the Onne OGFZ taken advantage of the litany of windows provided by the various policies of the ministry in a bid to meet set targets?

Well, it was to ascertain the agency’s efforts to realize its mandates that the Minister of Commerce and Industry, Senator Martins Kuye, recently paid an official visit to the headquarters of the oil and gas free zone at Onne, for an on-the-spot assessment of achievements made so far, and challenges facing the free zone. Kuye, who was accompanied by top functionaries of the ministry during the visit, recognized that to unlock the potentials of the country, “strategy had to be added to policy to make it deliverable”.

Perhaps, it was to show the strategic steps taken to add value to government policy, that the Chairman, Governing Board of the Onne Oil and Gas Free Zone Authority, Ambassador Adamu Aliyu, in his address during the visit, listed the fundamental challenges faced by the authority in course of its operations. Although the free zone has recorded scores of achievements within the short period of its existence, the board chairman disclosed that the free zone has faced some basic problems such as confusion over jurisdiction of land.

He stressed that across the globe, the concept of free zone is anchored on the premise that once an area is declared a free zone by the government, powers over management of the entire land mass so declared are vested on the free zone authority. However, he noted that at the Onne free zone, there was confusion on who has jurisdiction over the zone’s land in view of the non-implementation of the provisions of section 7 of the law establishing the authority, and appealed to the minister to wade into the matter, and ensure the justice is done.

Other teething problems faced by the free zone, according to Aliyu, are the dearth of standard infrastructure, such as durable roads and a solid link bridge to Ikpokiri Island, which is a designated part of the free zone. He described the inaccessible Ikpokiri Island as the most suitable site of the free zone for most downstream industrial projects, such as refinery, petrochemical and fertilizer plants. To fully develop the Ikpokiri Island to the desired standard, the chairman said a deal has been sealed with the Rivers State Government, which has also shown considerable interest in the partnership arrangement with the free zone to develop an energy city in the island.

According to the free zone’s chairman, the non-streamlining of the functions of the Nigeria Export Processing Zone (NEPZ) and that of the Oil and Gas Free Zone (OGFZ), is one of the lingering problems impeding effective operations of the authority. To address this conflict, the free zone authority is seeking the interpretation of laws establishing both NEPZA and OGFZA to specifically identify the designated duties of the respective agencies.

“He noted thus: “We wish to inform the minister that despite the interpretation given by the Federal Ministry of Justice, nothing has been done substantially to sort out the issues raised in respect of the distinct roles of the two agencies”. To structure the fee zone to enable it achieve its strategic goals, the board also requested government support in the provision of power supply and telecommunications infrastructure to aid rapid industrialization.

The Managing Director of the authority, Dr Noble Abe, took the session through a thorough explanation of the objectives of the free zone vis-à-vis, the challenges of direct foreign investment. He said the OGFZ, Onne enjoys an unrivalled strategic position in West Africa and the world at large, and stressed that there was need to exploit the comparative advantage of the vast oil and gas resources to attract investment to the zone.

According to the managing director, the free zone, which became active in early 1997, has attracted the major oil field operators, who recognized the apparent advantages and tax benefits associated with the unique facility. From a humble beginning of eight registered companies, the free zone boss explained that the OGFZ now can boast of more than 122 functional companies.

Although the OGFZ has the prospect of being the largest growing and dedicated free zone in the world, Abe said such potentials, which are anchored on the vast natural energy reserves can only yield the desired impact if the necessary logistics and incentives are provided. For him, “the mere use of the term free zone without employing our area of comparative advantage can not lead us to achieving our strategic goals. Nigeria is the largest producer and exporter of oil and gas in Sub-Saharan West Africa. Nigeria is the natural hub for distribution of oil and gas materials in the sub region while in Nigeria; Onne is at the heart of the oil and gas industry, with all necessary facilities in place. The free zone authority has the potential to attract great investments and creating job opportunities for the people”.

Excited by what he saw on the ground, the Minister of Commerce and Industry, Senator Martins Kuye, commended the board and management of the free zone for their strategic vision in transforming to realistic terms the objectives of the free zone. He emphasised that the concept of free trade in Nigeria should be made attractive to woe potential investors to not just the zone and Rivers State but also the Niger Delta and the country at large.

The minister lamented the poor state of infrastructure at the free zone, and assured that the federal Government would make provision in next year’s fiscal allocation to revamp the area, and make it attractive for foreign direct investment. He described the oil and gas free zone as a veritable tool for the development of the nation, which must not be allowed to droop into palpable decay and institutional rot.

But in a show of the state’s commitment towards the realization of the goals of the free zone, the Rivers State Commissioner for Commerce and Industry, Mr. Ogbonna Nwuke, assured that the state government would complement the efforts of the federal Government to promote investment drive in the oil and gas free zone, essentially through the creation of enabling environment for business to thrive. Nwuke explained that Rivers State Government’s commitment to make the free zone succeed was reflected in the already existing partnership between the government and the free zone authority in the Ikpokiri Island development project.

However, the extent to which the free zone will succeed largely depends on government determination to fully implement policies that directly fast track the achievement of set targets for the free zone authority. To be seen to have taken a lead in this direction, government needs to take a bold step in providing the desired logistics and incentives to accord the free zone the required international colouration in operations and standards.

Besides, the government needs to address, frontally, the burning question of conflict of duties between the OGFZA and the NEPZA, so that there is a clear cut distinction in functions and duties. The issue of jurisdiction over land also deserves urgent government intervention to remedy the spectre of confusion already enveloping the area, and which, of course, is capable of creating doubts in the minds of stakeholders on the sincere objectives of the free zone.

The issue of upgrading of infrastructure in the free zone to meet international standard is very crucial if the zone is desirous of attracting more foreign direct investment into the area.

This is because companies in the industry are looking for investment opportunities that give them the cutting-edge advantage to rake in quick returns on investments.

And given the competitive zest that the discovery of oil and gas in other parts of Africa, including West Africa provides, Nigeria needs to create and sustain a template that is unique for investors, esepcially by the demonstration of government’s commitment to ensure the safety and security of their investments while guaranteeing stability in economic policies. This way, it is possible to expect the flurry of foreign direct investments to the free zone, and efficient and quality service delivery to Rivers people in particular and Nigerians in general.

Beemene Taneh

Oil & Energy

‘Revamping Moribund Refineries ‘ll Address Rising Cost Of Petroleum Products’

Published

1 month ago

September 21, 2026

The Tide

An Energy Expert, Dr Joseph Obele, has called on the Federal Government and the management of the Nigerian National Petroleum Company Limited (NNPCL) to urgently restart the government – owned refineries insisting that it would help in curbing the rising cost of petroleum products.

He insisted that bringing back the moribund public refineries would further serve as a direct response to the plight of Nigerians as far as petroleum products is concerned.

Obele, who is also the Public Relations Officer (PRO) of the Petroleum Products Retail Outlets owners Association of Nigeria (PETROAN) and Lecturer at the Ignatius Ajuru University of Education, Port Harcourt, while reacting to the cost of petrol said the immediate and practical approach to addressing the current increase in petroleum prices is to restore production at the government-owned refineries and maximise every available refining capacity in the country.

“The immediate approach to the recent rise in petroleum prices is to restart the government-owned refineries”, he said.

Obele insisted that restoring functional government-owned refining capacity would increase domestic supply, reduce dependence on imported refined petroleum products and contribute to greater stability in the downstream petroleum market.

He urged the federal government to maximise all available refining capacity while continuing to encourage responsible private-sector Investment and healthy competition within the downstream petroleum industry.

Obele expressed concern over the continued rise in crude oil prices amid the ongoing tensions involving the United States and Iran and concerns around the Strait of Hormuz, warning that sustained supply risks could continue to put pressure on global petroleum prices.

He noted that Brent crude closed at about $105.83 per barrel on 16 September 2026, while WTI closed at about $102.43 per barrel.

The impact, the expert said, is already being felt in the Nigerian downstream market, with Premium Motor Spirit (PMS) reportedly selling in the range of ?1,400–?1,500 per litre in some locations, while Automotive Gas Oil (AGO) is selling above ?2,000 per litre.

“The immediate approach to the recent rise in petroleum prices is to restart the government-owned refineries”, Obele said.

According to him, restoring functional government-owned refining capacity will increase domestic supply, reduce dependence on imported refined petroleum products and contribute to greater stability in the downstream petroleum market..

He warned that a prolonged increase in petroleum prices would have a wider economic impact, particularly on transportation, food, medical services and other essential commodities.

“The continuous increase in the cost of petroleum products will invariably affect the prices of virtually all commodities and services. It will create additional inflationary pressure and deepen the financial hardship being experienced by Nigerians”, he stated.

Obele noted that the prolonged dormancy of government-owned refineries has had serious economic and employment implications across the petroleum value chain, affecting workers, contractors, marketers, transporters, businesses and other dependants of the sector.

According to him, a functional Port Harcourt and Warri Refinery would stimulate activities across the petroleum value chain, support employment and restore confidence among industry stakeholders.

In his words, ‘the Port Harcourt Refinery should become a measurable demonstration of government’s commitment to the welfare of Nigerians”

He further noted that the Port Harcourt Refinery had previously recorded production activities arguing that the focus should now be on resolving operational challenges and returning the facility to sustainable production.

“The time to restart the Port Harcourt Refinery is now. Nigerians cannot continue to bear the unbearable cost of petroleum products when domestic refining capacity is available. Every viable refinery should be optimally utilised in the national interest”

Obele emphasised that the objective should not be to undermine private-sector refineries but to ensure that all viable refining assets—government and private—contribute to national energy security, adequate supply and a competitive downstream petroleum market.

Lady Godknows Ogbulu

Oil & Energy

The Race To Cut Methane Emissions Is Exposing A Global Divide

Published

1 month ago

September 21, 2026

The Tide

Several countries worldwide have been working to reduce methane leaks, with some states making significantly more progress than others. The establishment of the Global Methane Pledge in 2021 at the COP26 climate summit has helped accelerate cleanup efforts; however, many countries are still falling behind on their methane-cutting pledges. Now, one of the world’s biggest methane polluters – Turkmenistan – is aiming to plug its mega leaks, which would help reduce global methane emissions and could encourage other countries to do the same.

The United States and the European Union led the Global Methane Pledge, which has since been signed by 159 countries that together contribute around 45 per cent of global human-caused methane emissions. The pledge aims to reduce methane emissions by at least 30 per cent below 2020 levels by 2030.

Many governments had already made ambitious pledges to reduce carbon emissions, but some had not previously sought to cut methane emissions, which heat the planet up to 80 times more than carbon dioxide over two decades. Methane has contributed around 30 per cent of the increase in global temperatures since the Industrial Revolution, and fossil fuels contribute around one-third of the methane emissions from human activity. Record production of oil, gas, and coal, combined with limited mitigation efforts, has kept emissions above 120 million tonnes (Mt) annually, according to the International Energy Agency (IEA).

The IEA’s annual Global Methane Tracker shows how much methane is emitted each year and tracks progress and failures. In 2024, abandoned wells and mines accounted for roughly 8 Mt of methane emissions, demonstrating the severity of leaving them unplugged. It is extremely hard to track methane emissions as they are widely underreported. Some parts of the world have little or no measurement-based data on methane emissions.

Therefore, the IEA has to rely on data from scientific studies, measurement campaigns, and large emissions events detected by satellites to estimate emissions each year. Some regions of the world, such as Europe, report their methane emissions far more accurately than other parts. The IEA estimated that global energy-related methane emissions are about 80 per cent higher than those reported by countries to the UN Framework Convention on Climate Change.

Some countries contribute heavily to the world’s methane emissions, particularly oil-rich countries that have not effectively decommissioned fossil fuel operations for decades, including Turkmenistan, the United States, Russia, Iran, and Venezuela. A 2023 Guardian assessment revealed that Turkmenistan was the worst country for methane mega-leaks. Some of Turkmenistan’s “super-emitters” leaked tonnes of methane every hour, from a single valve or pipeline, which is more than the emissions from an entire coal-fired power station. The assessment showed that the methane emissions alone from Turkmenistan’s two main fossil fuel fields contributed more to global heating in 2022 than the United Kingdom’s entire carbon emissions. The findings have led to significant public backlash and put pressure on the government to address the problem.

This year, Turkmenistan approved a massive clean-up project, as the country started plugging its mega-leaks. Turkmenistan has halted eight leaks by repairing corroded pipes, faulty wells, and failing flares, according to data from the United Nations. However, significant work is needed to reduce the country’s methane emissions. The UN Methane Alert and Response System (MARS) has delivered 192 alerts of methane plumes to Turkmenistan over the last year. According to the system, Turkmenistan had nine of the world’s top 50 worst methane leaks of the last six months.

Turkmenistan has improved its reporting systems in recent years and responded to around 20 per cent of the alerts with on-the-ground information about the leaks and potential plans to fix them. By comparison, the United States was sent 138 alerts and did not respond to any. The worst detected methane leak came from Mexico’s offshore oil and gas operations and measured a huge 37 tonnes per hour, equivalent to the emissions of over 7 million SUVs. Although Mexico responded to all 23 MARS alerts, it has yet to fix the leak.

Meghan Demeter, the programme manager of MARS, stated, “These mitigation cases are a proof point of what can be done with satellite data, especially in situations like Turkmenistan, where there are a lot of detections… This is a breakthrough in terms of having real documented mitigation action. But it is not yet a breakthrough in the overall magnitude of emissions. Eight cases is an incredible first step, but there are also a lot more sources in Turkmenistan that need to be addressed. We are in pretty constant communication, and the response rate is growing month by month. We’re seeing steady progress.”

UN tracking has also encouraged other countries in the region to plug leaks, with Kazakhstan, another former Soviet republic with ageing oil and gas infrastructure, stopping eight leaks following alerts. To date, Mexico, Brazil, and Argentina have 100 per cent response rates to MARS alerts, while Libya and Azerbaijan have high response rates. Meanwhile, the United States, Iran, Russia, and China failed to respond to any alerts.

By Felicity Bradstock for Oilprice.com 16

Oil & Energy

Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid

Published

2 months ago

September 7, 2026

The Tide

The Delta State Government has intensified efforts to boost electricity generation and supply in the state with plans to add 120 megawatts (MW) to the national grid through a partnership with Supply Power.

The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.

Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.

He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.

According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates

The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.

Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.

He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.

He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.

Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics

He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.

The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.

He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.

On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans

He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.

The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.

He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.

Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.