GCEO Highlights FX Stability Initiative and Energy Security Concerns in Nigeria
The Group Chief Executive Officer (GCEO) commended a new policy by the Nigerian President aimed at stabilizing foreign exchange for importers, stating it could resolve half of Nigeria’s import-based exchange rate issues. “This is a significant move, and credit is due to the President for introducing such a transformative initiative,” he remarked.
However, he noted that Nigeria still lacks true energy security. According to the GCEO, half of the Nigerian population lacks access to electricity, while over 70 percent do not have access to clean, affordable fuel.
“When people think of energy security, they often only think of fuel availability,” he explained. “But energy security encompasses much more. Currently, over 50 percent of Nigerians are without reliable electricity, and over 70 percent don’t have access to clean fuel. This isn’t a new issue; we’ve been discussing it for years.”
He added that while there has been notable progress toward bridging this energy gap, the Nigerian National Petroleum Company (NNPC) is bearing the responsibility for driving these efforts. “NNPC is taking on this challenge, and we’re doing it proudly as NNPC Limited,” he stated.
The GCEO observed that the oil and gas sector was traditionally structured to prioritize exports and profits over domestic energy needs. “The industry was built on a model that emphasized production for export. Investors focus on oil and gas production primarily for international markets,” he said. “But as NNPC, we are tasked with ensuring there is also sufficient supply for the local market. This includes making petroleum products and gas available domestically.”
Resolution of $2.4 Billion Debt
In other key developments, the GCEO announced that NNPC has cleared its long-standing cash-call debt of $2.4 billion owed to international oil companies operating in Nigeria. This debt settlement was made possible by the recent removal of fuel subsidies.
Historically, cash-call debts arise from funding commitments NNPC makes with its joint venture partners—Chevron, Shell, Mobil, TotalEnergies, and Agip—to finance operational and capital expenses for oil and gas projects. As of May 2022, NNPC had reduced its debt from $4.68 billion to $873.34 million, though subsequent reports indicated an increase to $2.4 billion by 2023.
The GCEO explained that the subsidy burden had often forced NNPC to redirect funds, resulting in defaulting on cash calls to joint venture partners. “With the subsidy burden lifted, we can now focus on our core operations in the upstream sector. Subsidies forced us to reallocate resources, leading to these financial shortfalls,” he noted, while praising the President’s decision to end subsidies, which he acknowledged as a tough but necessary choice for the industry’s long-term health.
Investment in CNG and LNG Infrastructure
Looking to the future, the GCEO revealed that by early 2025, Nigeria will have 12 new Compressed Natural Gas (CNG) stations across the country. “By the first quarter of 2025, we’ll have at least 12 CNG mother stations operational,” he announced. In addition, a new mini-Liquefied Natural Gas (LNG) facility will be established to supply gas for power generation and sustain CNG distribution for smaller power projects.
This infrastructure expansion is part of an effort to offer cleaner and more affordable fuel options to Nigerians while making better use of domestic resources.
