By Vera Osokpo
An energy expert has expressed concern over the ability of the Nigerian National Petroleum Company Limited to achieve its ambitious gas-reserve and production targets by 2030.
NNPCL is targeting more than 600 trillion cubic feet of gas reserves and national production of 12 billion cubic feet per day by the end of the decade. However, industry observers say the targets will depend on resolving longstanding challenges involving policy stability, infrastructure, financing, gas pricing and payment discipline.
Speaking during an interview with CNBC Africa, Temi Kolade, Associate Director in the Energy, Mining and Maritime Practice at Andersen Nigeria, said Nigeria’s main challenge was not a lack of gas resources but the historical structure of its oil and gas industry.
He explained that the sector had traditionally been developed around crude-oil production, with gas treated largely as a by-product.
“People came into these operations with the mind of exploring oil, and it’s never been so much about the gas,” Kolade said.
He noted that gas flaring had dominated the industry for many years before government began introducing policies aimed at encouraging gas development and commercialisation.
Nigeria currently has approximately 215 trillion cubic feet of proven gas reserves, based on figures cited during the interview. Kolade said achieving NNPCL’s 2030 ambition would therefore require a substantial increase in reserves and production.
He added that the 12 billion cubic feet per day production target would require major investment in upstream development, gas-gathering systems, processing facilities and reliable offtake arrangements for both domestic and export markets.
Kolade acknowledged that recent fiscal incentives and government directives supporting gas development were positive steps. He pointed to Nigeria LNG as evidence that large-scale gas projects could succeed when supported by a stable policy environment and an appropriate commercial structure.
However, he warned that government must maintain policy consistency to give investors confidence.
“It’s also very important that these policies are sustained and that we don’t begin to have counter policies down the line,” he said.
According to him, frequent policy changes and conflicting regulations could discourage long-term investment in an industry that requires significant capital expenditure and often takes years to generate returns.
Kolade said Nigeria’s gas strategy should balance domestic requirements with export opportunities. He noted that gas would be essential to improving electricity generation, supporting industries and expanding economic activity, while Nigeria would also need to remain active in international energy markets.
On pricing, he said the country might have limited flexibility to operate outside global gas-market realities. He argued that investors were more concerned about whether they could operate in a predictable business environment, recover their capital and repatriate profits without administrative difficulties.
“What is more important, if you ask me, would be that we have a stable investment environment and we also ensure that investors can take out their returns very easily without any sort of bottlenecks,” he said.
Kolade also highlighted the potential of gas-swap arrangements to support domestic supply obligations. Such structures could match gas supply with offtake requirements more efficiently without requiring every producer to transport gas over long distances.
He said properly implemented swaps could reduce logistical challenges and support wider gas commercialisation.
The expert linked Nigeria’s gas ambitions to the weaknesses affecting the electricity market. He said the country’s power crisis could not be blamed on a single part of the electricity chain because generation, transmission, distribution and revenue collection were closely connected.
According to Kolade, generating companies were often willing to produce more electricity, but transmission limitations restricted the amount of power the national grid could absorb.
At the same time, gas-fired power generation was affected when gas suppliers were not paid on time. Distribution companies also faced weak revenue collection, technical losses and commercial losses.
“So it’s a value chain problem,” Kolade said, noting that transmission was often blamed even though the sector’s challenges extended across the entire chain.
He identified inadequate metering as one of the major weaknesses affecting revenue collection. Without reliable meters, he said, electricity providers could not accurately measure consumption or ensure that customers paid for the power they received.
Kolade said smart meters should be prioritised over conventional meters because they could improve visibility, reduce electricity theft and enable remote monitoring of supply and consumption.
“Smart metering is the way to go,” he said, adding that better metering would help ensure that whatever electricity was supplied was paid for and would improve cash flow throughout the power sector.
The interview also considered the Federal Government’s ₦729 billion Series 2 bond, issued under a ₦4 trillion power-sector debt-reduction programme.
Kolade said the intervention could help address legacy debts, including unpaid obligations owed to gas suppliers. However, he warned that such support would not be sufficient if the market failed to improve payment discipline.
He said the long-term objective should be to make the electricity sector financially self-sustaining by reducing technical and commercial losses, improving collections and ensuring regular payments from consumers to distribution companies, generators and gas suppliers.
Kolade also welcomed the reported addition of approximately five million off-grid electricity connections over the past year up to September.
He said the expansion of off-grid power, particularly solar energy, should be encouraged because Nigeria possessed substantial untapped solar potential.
He rejected the suggestion that off-grid electricity meant consumers were abandoning the national grid. Instead, he described it as part of a diversified energy system needed to meet the demands of a rapidly growing population and economy.
Kolade acknowledged that off-grid solar systems often require higher initial investment than conventional grid connections. However, he said lower maintenance costs and the possibility of avoiding recurring electricity bills could make them more attractive over time.
He said the success of Nigeria’s gas expansion plan would ultimately depend on its ability to align upstream investment, gas commercialisation and electricity-market reforms.
Without progress across these areas, he warned, the country’s ambitious reserve and production targets could remain difficult to achieve by the end of the decade.