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IS IT A NIGERIAN GAS FLARE COMMERCIALISATION PROGRAM ?

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The Nigeria Gas Flare Commercialisation Programme (NGFCP) is a prime example of a project well concieved but poorly executed and unlikely to achieve most of its objectives despite its inherernt potential. That is because it has not been thought through properly. It is over beauracratic with complex and complicated processes, and lacks commercial clarity. For it to hope to achieve any degree of success investors must have a fair idea of the return the program provides. It is currently impossible to make such an assessment or to determine the risk of such an investment because there is no clearly defined commercial framework. We are led to believe that the use of the electronic evaluation tool somehow provided a more qualitative outcome as the program Director seems to be at pains to point out that the process of selecting the final qualified companies was done with rigour and according to best global practice. But what have they qualified for? A commercial proposition that lacks clarity and is ill defined in its attractiveness as an investment?

The Program Manager of NGFCP, Mr. Justice Derefaka speaking recently on a planned workshop, stated that it would be centred on, ‘regulatory framework, incentives, best practices and understanding the Request for Proposal phase’ to boost investors’ and qualified applicants’ appetite in the NGFCP". Surely this should have come prior to any bid. Derefaka went on to explain that the workshop would have a good number of industry resource persons to help the qualified companies get through the expectations of the programme. He sounds like a bureaucrat

Confusingly he conflates the work of the Facility for Oil Sector Transparency (FOSTER)with Conflict Sensitive Business Practices (CSBP) which he insists is necessary to help gas flare companies improve bankability of their projects.

“So, we want to showcase one of the CSBP tools, one of which is Macro-Level Conflict Risk and Impact Assessment (M-CRIA). For us at the NGFCP we believe this could be used in different stages: pre-feasibility, tendering or implementation of the NGFCP programme.”

Yet again it seems that the process has inverted itself to the extent that any such workshop should have been conducted prior to the qualification stage. This would have allowed interested companies to better formulate their commercial proposition, perhaps incorporating some of the practises suggested by the workshop. He outlined his rationale as follows

“Studies carried out in the Niger Delta have identified three major locations where violence had been instigated by conflict entrepreneurs, all because of their selfish and pecuniary interests, thereby frustrating laudable projects of national and international magnitudes in those host communities and FG through the NGFCP does not want a repeat of such hence we are keen on early stakeholders’ engagement with host communities to co-create, co-own and achieve a win-win for All.
“And to a great extent we are making inroads in this regard as some of the QAs are host communities,”

He seems to be providing a litany of dissuation for any serious investor by drawing attention to the rampant militancy in the Niger Delta and the difficulty the government have had in dealing with it.

What do you think?

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