IEEJ:August 2015

COUNTRYREPORTON
NIGERIA ENERGY SYSTEMPRESENTED BY:
ENGR SAMSON UBOGU, MNSEMINISTRY OF ENERGY, ASABA,DELTA STATE, NIGERIACOUNTRY REPORT ON NIGERIA ENERGY SYSTEM
1.

GENERAL INFORMATION ON NIGERIA

1.1. Country Overview

1.1.1. Governmental System
Nigeria is a constitutional democracy and operates a federal system of government. The
Nigerian federation consists of a Federal Government at the apex and thirty-six states, aFederal Capital territory which includes the administrative capital, Abuja. There are also 774
Municipal Councils or Local Government Areas in the federation. The Federal Government
has the exclusive responsibility for foreign policy, national security, defense, monetary policy
and national planning. Nigeria operates a presidential system of government similar to theAmerican system. At the federal or national level, there is an Executive President elected
popularly on the platform of a political party. The president forms a government of Ministers(Secretaries). The federal legislature consists of the Senate and House of Representatives ofelected members. Each state has an elected Executive Governor and members of the State
House of Assembly while the Local Governments elect a Chairman and councilors. The
three-tiers of government share revenues and allocate responsibilities according to theprovisions of the Constitution. The official currency is the Naira (N1 = 100 Kobo).
1.1.2. Geography and Climate

Nigeria is located on the west coast of Africa. It is bordered on the north by the Niger andChad; on the east by Cameroon; on the west by the Republic of Benin; and is bounded on thesouth by the Gulf of Guinea and Equatorial Guinea. It has a total area of 923,766 square
kilometers of which the land area consists of 910,768 square kilometers, while the balance of
13,000 square kilometers is water, with a total coastline of 853 kilometers. The land areaspans over six ecological zones, ranging from swampy coastal rain forest of the South to thesemi-arid fertile grassland of the Eastern region, about 600 meters over the Northern region
and 300 meters over the Western region. The Coastal southern regions are the low-lying
grounds which are generally below 300 meters and are characterized by creeks and lagoons
on both sides of the Niger delta. The main drainage systems are the Niger-Benue Rivers, theLake Chad and the coastal river systems as shown in the map in Figure 1.

Figure 1: Map of Nigeria.
Source: UN Statistics Division

The official language is English, and the major indigenous languages are Hausa, Yoruba andIgbo. The main religions are Islam (50%), Christianity (40%) and Traditional (10%). The
main commercial and industrial cities are Lagos, Onitsha, Kano, Ibadan, Port Harcourt, Aba,
Maiduguri, Kaduna, Warri, Benin. Sea ports are located at Lagos (Apapa, Tin-can Island),Warri, Port Harcourt, Onne Deep Sea and Hub Port and Calabar (EPZ), while international
airports are at Lagos, Kano, Port Harcourt and Abuja. In the area of transportation, the road
network consists of over 15,000 km of intercity all weather paved roads, including dual
carriage express trunks. There are two main railway lines (South-West to North-East; SouthEast to North-West) inter-linked and terminating at Lagos, Port Harcourt, Kaura Namoda,
Maiduguri and Nguru; with major junctions at Kaduna, Kafanchan and Zaria. Gauge:
1067mm; and a total length of 3505 route km.
The vegetation is typical of what is obtainable in a tropical climate. There are four broad
vegetation belts: the Mangrove Swamp on the coast, the Rain Forest, the Woodland
Savannah, and the Guinea and Sudan Savannah in the North.
Temperatures across the country are relatively high with a very narrow variation in seasonaland diurnal ranges (22-38 degrees Celsius). There are two basic seasons: wet season whichlasts from April to October; and the dry season which lasts from November till March. The
dry season commences with the Harmattan, a dry chilly spell that lasts till February and isassociated with lower temperatures, a dusty and hazy atmosphere brought about by the NorthEasterly winds blowing from the Arabian peninsula across the Sahara; the second half of thedry season, February - March, is the hottest period of the year when temperatures range from33 to 38degrees centigrade. The extremes of the wet season are felt on the southeastern coast whereannual rainfall might reach a high of 330cm; while the extremes of the dry season, in aridity
and high temperatures, are felt in the north third of the country.
1.1.3. Population
Nigeria, with a population of more than 150 million, is a highly populated country with awide diversity of peoples. The population is made up of about 374 distinct ethnic groups.
Three of them, Hausa, Ibo and Yoruba are the major groups and constitute over 40 per cent of
the population. In fact, about 10 ethnic linguistic groups constitute more than 80% of the
population: the other large groups are Ijaw, Tiv, Ibibio, Kanuri, Nupe, Gwari, Igala, Jukun,
Idoma, Fulani, Edo, and Urhobo. The gender divide of Nigeria's population, as indicated by
the last census in 2006, reflects an unusual imbalance in favour of male dominance; 51%
male: 49% female. Tables 1 to 6 depict the national demographic, economic and energy
statistics.

TABLE 1. POPULATION INFORMATION
Averageannualgrowth rate
(%)
2000
to
2000 2006* 2008** 2006
116.03 140..43 149.65 3.18

Year
1970
1980 1990
Population (millions)
61.86
75.55 86.97
Population
density(inhabitants/km²)
67
82
94
125
152
162
Urban Population as % of total
37
40
45
47
923.77, 923.77 923.77 923.77 923.77 923.77
Area (1000 km²)
* Latest available data from national census **Extrapolated data from 2006
Source: National Population Commission, Abuja

1.1.4. Economic Data
TABLE 2. GROSS DOMESTIC PRODUCT (GDP)

1970
1980
1990
2000
GDP (millions of current
7,392
32,45044,160US$)
75,910GDP (millions of constant2000 US$)18,181
59,12759,60975,910GDP
percapita(PPP*
US$/capita)
182
1248
1750
2333
GDP per capita (current
US$/capita)
119
671
718
994
* PPP: Purchasing Power Parity ** Latest available data

2005

2007**

Averageannualgrowthrate (%)
2000
to
2007

98,830144,0629.15

85,063

116,774

2935

3383

1,159

1626

Sources: Nigerian Federal Bureau of Statistics, Abuja; andhttp://www.economywatch.com/economicstatistics/Nigeria/GDP_Per_Capita_PPP_US_Dollars
1.1.5. Electricity Situation
In Nigeria, electricity is produced mainly from gas fired thermal plants and Hydro dams.
Other sources from which electricity can be generated include: Nuclear, Clean Coal, Solar
PV, Wind, etc. Solar PV, Wind and other Renewable sources of electricity generation holdmixed blessings of exciting prospects and challenges to be overcome.
Until the recent implementation of the power sector reforms and privatization of the Power
Holding Company of Nigeria ( PHCN ) assets, electricity power generation, transmission anddistribution were the exclusive responsibilities of the Federal Government of Nigeria which
national monopoly PHCN held absolute control.
Thus State Governments in the part only intervene in the provision of power distribution
infrastructure due to PHCN’s lack-lustre performance in connecting communities to thenational grid and/or expanding/maintaining existing power supply networks to meet growing
demands.
1.

CURRENT ENERGY POLICY AND MEASURES OF NIGERIA

Hitherto, existing policies in the energy sector have been those of individual energy subsectors such as electricity, oil and gas, and solid minerals. These have been developed fromlimited perspectives of each of the sub-sectors and had resulted in some cases to conflicting
policies and programs, to the detriment of the country as a whole.

The National Energy policy for Nigeria is the one released by the Energy Commission of
Nigeria April, 2003. The policy document covers the development, exploitation and supply of
all the Nation’s energy resources. It also covers key energy utilization sectors; energy related
issues such as environment, energy efficiency and energy financing and Energy Policy
implementation. It includes strategies for systematic exploitation of the energy resources, thedevelopment and effective use of man power, supply of rural energy needs, efficient energy
technology and use, energy security, energy financing and private sector participation.
The strategies are finally harmonized and grouped into short, medium and long termmeasures for easier implementation. The major objectives of the National Energy Policy
include:i.
To ensure the development of the nation’s energy resources, with diversified energy
resources option, for the achievement of national energy security and an efficient energy
delivery system with an optimal energy resources mix.
ii.
income.

To guarantee increased contribution of energy productive activities and to nationaliii.
To guarantee adequate, reliable and sustainable supply of energy at appropriate
costs and in an environmentally friendly manner, to the various sectors of the economy, fornational development.
iv.
resources.

To guarantee an efficient and cost effective consumption pattern of energyv.
To accelerate the process of acquisition and diffusion of technology and managerial
expertise in the energy sector and indigenous participation in energy sector industries, forstability and self-reliance.
vi.
To promote increased investments and development of the energy sector industries
with substantial private sector participation.
vii.
To ensure a comprehensive, integrated and well informed energy sector plans andprogrammes for effective development.
viii.
To foster international co-operation in energy trade and projects development inboth the African region and the world at large.
ix.
To successfully use the nation’s abundant energy resources to promoteinternational co-operation.

ENERGY SOURCES
Oil

Policies
i. The nation shall engage intensively in crude oil exploration and developmentwith a view to increasing the reserve base to the highest level possible.
ii. Emphasis shall be placed on internal self-sufficiency in, and export of,petroleum products.
iii. The nation shall encourage indigenous and foreign companies to fully
participate in both upstream and downstream activities of the oil industry.
iv. The nation shall encourage the adoption of environmentally friendly oil
exploration and exploitation methods.
v. The nation shall progressively deregulate and privatize the oil industry.
ix. To attract increased private sector capital inflow to the oil industry.
Natural Gas
Policies
i. The nation's gas resources shall be harnessed and optimally integrated into thenational economy, energy mix and industrial processes.
ii. The nation shall engage intensively in gas exploration and development with aview to increasing the reserve base to the highest level possible.
iii The nation shall put in place necessary infrastructure and incentives toencourage indigenous and foreign companies to invest in the industry.
iv. The nation shall put in place necessary infrastructure and incentives to ensure
adequate geographical coverage of the gas transmission and distribution
network.
Tar Sands
Policyi. The nation shall encourage tar sands exploration, exploitation and development
for full utilisation by the country.
ii. The exploitation of the tar sands resources shall be private sector driven, while
indigenous participation shall be actively promoted.
Coal
Policies
i. The nation shall pursue vigorously a comprehensive programme ofresuscitation of the coal industry.
ii. Extensive exploration activities to maintain a high level of coal reserves shallbe carried out.
iii. Private sector as well as indigenous participation in the coal industry shall beactivity promoted.
iv. The exploitation and utilization of the coal reserves shall be done in anenvironmentally acceptable manner.
Nuclear
PolicyThe nation shall pursue the exploitation of nuclear energy for peaceful purposes.
Hydropower
Policies
i. The nation shall fully harness the hydropower potential available in the country
for electricity generation.
ii. The nation shall pay particular attention to the development of the mini andmicro hydropower schemes.
iii. The exploitation of the hydropower resources shall be done in anenvironmentally sustainable manner.
iv. Private sector and indigenous participation in hydropower development shallbe actively promoted.
Fuelwood
Policies
i. The nation shall promote the use of alternative energy sources to fuelwood.
ii. The nation shall promote improved efficiency in the use of fuelwood.
iii. The use of wood as a fuel shall be de-emphasized in the nation's energy mix.
iv. The nation shall intensify efforts to increase the percentage of land mass
covered by forests in the country.
Solar
Policies
i. The nation shall aggressively pursue the integration of solar energy into thenation's energy mix.
ii. The nation shall keep abreast of worldwide developments in solar energy
technology.
Biomass
Policyi. The nation shall effectively harness non-fuelwood biomass energy resources
and integrate them with other energy resources.
ii. The nation shall promote the use of efficient biomass conversion technologies.

Wind
Policies
i. The nation shall commercially develop its wind energy resource and integrate
this with other energy resources into a balanced energy mix.
ii. The nation shall take necessary measures to ensure that this form of energy isharnessed at sustainable costs to both suppliers and consumers in the rural
areas.
Hydrogen
PolicyThe nation shall integrate hydrogen as an energy source in the energy mix of thecountry
Other Renewables
PolicyThe nation shall maintain an interest in other emerging sources of renewable energy.
ENERGY UTILIZATIONElectricity
Policies
i. The nation shall make steady and reliable electric power available at all times,
at economic rates, for economic, industrial, and social activities of thecountry.
ii. The nation shall continue to engage intensively in the development of electric
power with a view to making reliable electricity available to 75% of the
population by the year 2020.
iii. The nation shall promote private sector participation in the electricity subsector,
while ensuring broad-based participation of Nigerians.
Industry
Policies
i. The nation shall ensure that an adequate supply of energy is made available tomeet the full requirements of industrial activities.
ii. Emphasis shall be placed on local sourcing of all the energy types to be usedby industries.
iii. Optimal utilization of the nation's available energy types for the various
industrial activities shall be pursued in an environmentally sustainable
manner.
iv. The nation shall promote energy efficiency and conservation in industry.

Agriculture
Policies
i. The nation shall ensure adequate and reliable supply of energy to theagricultural sector.
ii. The nation shall ensure that appropriate sources of energy are utilized
judiciously and efficiently for the overall agricultural activities, withminimum harm to the environment.
iii. The nation shall emphasize the use of affordable, adaptable, reliable andsustainable agricultural technologies, possessing flexible energy utilization
capabilities.
Transport
Policies
i. The nation shall vigorously pursue the development of an optimal energy mix
for the transport sector.
ii. The nation shall ensure regular and adequate availability of all fuel types forthe transport sector.
iii. The nation shall ensure the use of energy efficient and environmentallyfriendly technologies in the transport sector.
Households
PolicyThere shall be the provision of a mix of energy supply available for households for cooking,lighting, refrigeration, cooling and heating at affordable cost without let and hindrance toimprove the standard of living.
ENERGY ISSUES
Environment
PolicyThe nation’s energy resources shall be exploited in an environmentally safe andsustainable manner.
Energy Efficiency and Conservation
Policies
i. Energy conservation shall be promoted at all levels of exploitation of thenation’s energy resources.
ii. The nation shall promote the development and adoption of energy efficientmethods in energy utilization.

Research, Development and Training
PolicyThe nation’s energy resources shall be developed and utilized on a self-sustainablebasis through research, development and training.
Bilateral, Regional and International Cooperation
Policies
i. Nigeria’s energy resources shall be deployed in promoting and enhancing
regional and international co-operation for the overall economic andtechnological advancement of the nation.
ii. Nigeria shall lay emphasis on fostering and strengthening energy cooperationand integration within the ECOWAS sub-region.
ENERGY FINANCING
Financing
Policies
i. The nation shall explore and adopt all viable financing options from local andinternational sources for cost effective exploitation of its energy resources.
ii. Investments in the energy sector shall be accorded high priority within theeconomic sector.
iii. Government shall encourage private investments, both domestic and foreign, inthe energy sector.
Indigenous Participation
Policies
i. Indigenous companies and individual Nigerian citizens shall be fully andeffectively integrated into ownership participation in the deregulated andprivatized energy sector.
ii. The local content of value added in the energy sector activities shall be raised
to, and maintained at, a high level.
PLANNING AND POLICY IMPLEMENTATION
Policies
i. An integrated energy planning system shall be developed involving the energy
related programmes and activities of the various sectors of the economy.
ii. The energy planning system shall be comprehensive, covering the resource
exploitation, processing, and consumption activities.
iii. The energy plans and programmes shall be consistent with the overall national
development goals.

Policy Implementation
Policyi. All Government energy related policies will derive from, and be consistent
with, the overall National Energy Policy.
ii. The Energy Commission shall be the focal point for the monitoring andcoordination of the implementation of the national energy policy.
Prioritization of Strategies into Short, Medium and Long term.
The implementation process of the Energy Policy requires strategies that allow for anumber of factors including priority setting, policy continuity and a clear focus on key
issues. Accordingly, such strategies should be based on realistic targets, a defined time frame
as well as effective target evaluation.
The advantages of this approach are two-fold: i.) it will enable planners and implementing organs to include the cost of eachstrategy in their respective budgets, as they fall due; andii.) it will aid monitoring organs to assess the progress of implementation of thevarious strategies.
In this regard and, in line with usual planning horizon, it is expected that short-term
measures are those that could be evaluated within 1 to 2 years. A 5-year period is
advocated for medium-term activities. With this perspective, the recommended
activities are as indicated below.
Short Term Measures
General1) Prioritization of the policy strategies for implementation, with the setting ofrealistic targets and the effective monitoring and evaluation of theimplementation process.
2) Establishment of necessary guidelines and regulations on energy efficiency,
conservation, consumption, technology, fuel mix, information gathering, etc,
as appropriate.
3) Development and implementation of the necessary machinery for constantmonitoring of the implementation of the approved energy policy andcompliance with the guidelines and regulations on various energy matters by
all sectors of the economy.
4) Ensuring the implementation of fiscal measures necessary for the achievementof the set objectives of the energy policy.
5) Rehabilitation of refineries, petroleum products distribution infrastructure,
power plants, transmission and distribution networks.
6) Continuation of the promotion of the establishment of local services companies
for the oil, gas, electricity, etc sub-sectors and encouraging their patronage by
the energy companies in the private and public sectors.
7) Increased patronage of indigenous engineering and applied research groups inthe execution of projects right from feasibility studies.
8) Development and implementation of appropriate packages to enhance theutilization of renewable energy to solve rural energy problems and to makepossible the extension of commercial energy and the associated technology to
the rural sector.
9) Implementing energy audits in the agricultural and industrial sectors to identify
and quantify the structure of energy supply, demand, utilization patterns,
efficiencies and substitution potentials etc., for both the small scale and largescale
farming and industrial enterprises.
10) Strengthening of all relevant regulatory agencies in order to ensure theenforcement of appropriate set of standards and procedures, including inparticular standards and procedures on exploration, production and utilizationof energy.
11) Improving the living standard of people in energy resource producing
communities through the provision of socio-economic infrastructure.
12) Establishment of a programme for the liberalization and privatization of theenergy sector.
13) Development and implementation of appropriate and dynamic pricing andtariff structures for petroleum products, gas, electricity and other energy types,
which will encourage private sector participation, by ensuring a reasonable
return on investments while giving due attention to the needs of the target
markets.
14) Improvement of the effectiveness of energy planning and implementation by
establishing energy planning and implementation units at state government
levels and assigning responsibilities for energy related matters at local
government levels.
15) Establishment of a national energy information system which will involve
consistent data gathering and processing of energy resource inventory,
consumption pattern, energy technologies, and other relevant socio-economic
parameters.
16) Intensification of action on the development of an energy Master Plan.
17) Encouragement of interaction within existing fora for formal discussions andcollaboration between institutions in the energy sector.
18) Enabling of private sector participation in the energy sub-sectors through thereview of existing relevant laws and regulations.
19) Establishment of a strategy for the public awareness, education andparticipation in the realization of the goals and objectives of the energy policy.
20) Monitoring and assessment of technological developments in all energy areas
and development of capabilities to apply them, as appropriate in the various
sectors of the economy.
21) Establishment of a plan which will encourage increased placement of
Nigerians in all positions in the energy producing, service and processing
companies, including especially in key decision-making and technicalpositions in oil, gas, nuclear and other relevant energy industries.
22) Strong encouragement of the energy producing and processing companies to
set up R & D outfits in the country and to make use of R & D institutions inNigeria.
23) Increased funding to appropriate agencies for the provision of energy related
engineering infrastructure.
24) Easing of the constraints on the importation of essential but scarce materials
for the manufacture of engineering equipment's and spares.
25) Submitting of energy data and information, as may be required by the Energy
Commission of Nigeria to carry out its monitoring coordination and databanking functions, at specified intervals, by the sub-sectoral agencies thatgenerate or collect the primary data.
Oil26) Setting of medium term reserves and producibility targets.
27) Updating of the memorandum of understanding to ensure that it contains
appropriate incentives that will attract investments in intensified crude oil
exploration and development.
28) Maximization of petroleum production and processing efficiencies.
29) Improvement and promotion of the provisions put in place for theestablishment of export refineries.
30) Ensuring the use of locally available materials such as bentonite and barytes
for oil exploration.
Natural Gas
31) Review and improvement of existing incentives to producing companies toencourage them to gather and utilize associated gas in order to maximise
income from associated gas and eliminate gas flaring by 2008.
32) Review of existing penalties for gas flaring and ensuring that they achieve thedesired effect.
33) Establishment of appropriate arrangements to ensure the implementation of the
incentives and penalties to discourage gas flaring.
34) Monitoring the implementation of measures to achieve the termination of gas
flaring by 2008.
35) Establishment of appropriate guidelines, regulations and incentives for theparticipation of indigenous and foreign entrepreneurs in the establishment of
the infrastructure for, and business in, gas gathering, transmission anddistribution.
36) Provision of funding for the establishment of a nationwide infrastructure forgas gathering, transmission and distribution.
37) Review and sustenance of the implementation of incentives to industrial anddomestic consumers to use gas or change over to gas.
38) Sustenance and expansion of the measures presently in place for theestablishment of infrastructure and markets for the export of natural gas.
39) Formulation of suitable urban and regional planning regulations, which areneeded for the effective distribution of natural gas to domestic and industrial
consumers.

Tar Sands
40) Undertaking of more detailed geological studies, exploration and exploitation
activities for the tar sands deposits of the country.
41) Establishing an appropriate regulatory institution for the tar sands sub-sector.
42) Putting in place necessary regulations and guidelines for the exploitation of tar
sands deposits.
43) Providing appropriate incentives to facilitate investments in the explorationand exploitation of tar sands resources.
Coal44) Development and implementation of appropriate measures for large scale
production of coal stoves at affordable prices and for the establishment of coalbasedindustries, by local entrepreneurs.
45) Provision of adequate funding to enable intensified coal exploration andproduction activities.
46) Re-introducing the use of coal for power generation.
47) Providing adequate incentives to indigenous and foreign entrepreneurs so as toattract investments in coal exploration and production.
Nuclear48) Intensification of Research, Development and Training in Nuclear Science andTechnology for peaceful applications.
49) Evolution of a rational nuclear development programme and institutionalarrangements.
50) Strengthening of the Nigerian Nuclear Regulatory Authority to ensure Nuclear
safety and Radiation Protection.
51) Commissioning of the pilot-scale gamma irradiation facilities for foodpreservation, sterilization and other industrial applications.
52) Commissioning the Nuclear Research Reactor.
53) Regular public enlightenment campaigns on peaceful applications of nuclear
technology.
54) Intensification of exploration activities for nuclear mineral resources.
55) Fostering of co-operation with the IAEA through encouragement of thenational counterpart agency to actively participate in all IAEA programmes.
56) Providing adequate resources to the Nigerian Nuclear Regulatory Agency(NNRA) for the enforcement of nuclear laws and regulations.
Hydropower57) Constant review and improvement of multilateral agreements for monitoring
and regulating the use of water in international rivers flowing throughthe country.
58) Increased patronage of indigenous entrepreneurs involved in the planning,design and construction of hydropower plants.
59) Establishment of appropriate fiscal measures as incentives to indigenous andforeign entrepreneurs for the local production of hydropower plants andaccessories.
60) Establishment of appropriate institutional arrangements, regulations, andguidelines for the development of small-scale hydropower plants.
Fuelwood61) Cultivation of fast growing tree species needed to accelerate the regenerationof forests.
62) Development of smokeless coal, sawdust, biogas and other energy
technologies as alternatives to fuelwood.
63) Improvement of the efficiencies and performances of existing improved
woodstoves and ovens.
64) Encouragement of the establishment of private and community woodlots forthe supply of fuelwood.
65) Ensuring the availability and effective distribution of kerosene as an alternative
to fuelwood in the interim.
66) Establishing training programmes on the use, maintenance and fabrication ofefficient woodstoves and other alternative technologies.
67) Promotional activities, such as extension and pilot projects, to disseminate
solar, biogas and other alternative technologies to fuelwood.
68) Establishing micro-credit facilities for entrepreneurs, especially womengroups, for the establishment and operation of commercial fuelwood lots andthe production of renewable energy devices and systems.
Environment69) Organization of systematic public enlightenment campaigns on the problems ofdesertification and soil erosion arising from deforestation.
70) Review and enforcement of forestry laws to effectively stop the willful fellingof trees in prohibited zones.
71) Dissemination of information on existing energy efficient and environmentallyfriendly technologies in the exploitation of various energy resources.
72) Development and implementation of guidelines and regulations on appropriatetechnologies for the exploitation of energy resources to minimize harmfulenvironmental effects.
73) Intensification of research and development in more efficient andenvironmentally friendly utilization of various energy sources.
74) Encouragement of the utilization of environmentally friendly energy resources
and technologies.
75) Setting appropriate targets for the attainment of definite progress in the
mitigation and control of major energy related environmental problems.
76) Putting in place appropriate programmes to ensure the attainment of the set
targets for the mitigation and control of the major energy related environmental
problems.

Solar, Biomass and Wind
77) Establishment of demonstration and pilot projects as well as holding
workshops and public education campaigns on solar energy, biomass, biogas,
wind and other renewable energy resources to ensure their adoption and market
penetration.
78) Establishment of appropriate fiscal measures as incentives for the utilization ofsolar, wind and other renewable energy systems.
79) Establishment of a set of regulations and guidelines to promote and sustain thelocal solar, biomass and other renewable energy industries.
80) Development and implementation of training packages for skilled craftsmen
and technicians on the production, operation and maintenance of solar, wind,biomass and other renewable energy systems.
81) Providing adequate incentives to producers, developers and suppliers of solar,
wind and biomass energy products and services.
Other Renewable Energy Resources82) Gathering information on the advances in less developed renewable energy
resources; Extension of the energy information acquisition, storage anddissemination activities to them.
Electricity
83) Completion of on-going short term projects designed to satisfy national
demand for electricity.
84) Expansion of the existing electricity transmission and distribution networks.
85) Intensification of research, development and training in alternative sources ofenergy for the generation of electricity.
86) Establishment and commencement of a programme for the liberalization andprivatization of the electricity sub-sector.
87) Development of appropriate infrastructure, guidelines, laws and regulations forthe management of a liberalized and privatized electricity sub-sector.
88) Commercialization of electric utility agencies and granting them managerial
and financial autonomy to enable them operates efficiently.
89) Establishing a reduced tariff regime for very low and especially handicappedelectricity consumers and a mechanism for funding the subsidy.
90) Review and strengthening of existing incentives for the encouragement of local
manufacture of electrical equipment and devices.
91) Establishment of effective measures to ensure the security of electricalinstallations and improving the operational efficiency of the electricity subsector,
particularly the distribution activities.
92) Providing appropriate financing facilities to support indigenous investments inthe electricity industry.

Industry93) Development and implementation of appropriate measures to encourage fuelsubstitution in industries.
Agriculture94) Intensive promotion of the utilization of renewable energy in agriculture
through demonstration, pilot projects, workshops, etc.
95) Intensification of research and development activities for appropriate
agricultural technologies that can use available and multiple energy resources,
including animal traction.
Transport
96) Periodic review of transport fuels storage capacity, in accordance with
developments in the transport sector, with a view to updating the storage
capacity guidelines and storage infrastructure.
97) Comprehensive study of the transport fuel distribution systems anddevelopment of recommendations for their improvement.
98) Initiation of discussion with relevant institutions in the transport sector to
identify appropriate energy-efficient transport systems, strategies andequipment that should be introduced.
99) Encouragement of the relevant agencies to introduce fuel-efficient transportmanagement systems.
100) Encouragement of the relevant agencies to improve and expand masstransportation and communication systems, countrywide.
Energy Efficiency and Conservation
101) Development of codes, standards, regulations and guidelines on energy
conservation and use of energy-efficient methods, appliances, equipment, machinery andtechnologies in homes, agriculture, industry, building design and construction, etc.
102) Establishment of appropriate institutional arrangements and incentives for thepromotion and monitoring of energy conservation and use of energy-efficientmethods.
Research, Development and Training103) Provision of increased funding to research institutes, centers and tertiary
institutions, who are undertaking R & D work on renewable, nuclear, coal andother energy resources to ensure productive R & D and the establishment ofappropriate infrastructure.
104) Development and implementation of a programme of R & D in energy
conservation and efficiency, including the development and manufacture ofenergy-efficient equipment and machinery.

105) Promotion of the development and introduction of integrated energy andenvironment curricula and disciplines into the programmes of tertiary
institutions.
106) Taking measures to ensure adequate institutional capacity for the production ofadequate numbers and quality of high level and skilled technical andmanagerial manpower for the energy sector.
107) Establishment of the necessary machinery to provide adequate funding fromconventional energy sub-sectors, such as the dedication of a certain percentageof the nation’s income from such sectors, to support research, development,
demonstration and training in energy.
108) Development and initiation of the implementation of an accelerated andeffective manpower development programme for the energy sector.

Finance109) Provision of appropriate measures to encourage prospective investors in theenergy sector.
110) Expansion of the scope of Venture Capital Financing (National Risk Fund Plc)
to embrace investments in the energy sector.
111) Encouraging energy firms to source development funds from the Nigerian
capital market.
112) Establishment of guaranteed and dependable repayment scheme for loans
invested in energy projects.
Indigenous Participation
113) Establishing a financing mechanism which will support indigenous
investments in energy sector industries.
114) Creating appropriate motivation through the Memorandum of Understanding
and/ or Operating Licenses in the energy sector, for increasing the local content
of value added in the activities of energy sector industries.
115) Setting aside significant percentages of the shares of privatised energy sector
industries for acquisition by Nigerians.
116) Putting in place schemes to ensure broad-based access by Nigerians to sharesin privatised energy sector industries.
.Medium Term Measures.
General1) Continuation of short-term activities.
2) Ensuring that the strategic plans and programmes of the energy sub-sectors areappropriately appraised with a view to ensuring consistency with the overallnational energy policy and plans and resolving conflicts arising from subsectoralplans and programmes.
3) Development of other potential sites for hydropower, gas and coal plants forelectricity generation.
4) Monitoring and ensuring the progress of the plan for achieving the placementof Nigerians in key decision making positions and other responsibilities in theenergy industries.
5) Establishment and sustenance of the implementation of a national energy
masterplan.
6) Continuation of the priority given to the provision of facilities for the
production of ferro-alloys and flats for the manufacturing industries.
Oil7) Ensuring the attainment of a reserve target of 35 billion barrels and a
production capacity of 3.5 mbpd.
8) Commercialization of the operations of existing refineries while taking steps topromote private sector participation in the refining business.
9) Expansion of the transmission and storage facilities for petroleum products toachieve the 45-day strategic reserves.
10) Ensuring adequate geographic coverage of petroleum products distribution
network.
Natural Gas
11) Termination of gas flaring.
12) Sustaining funding for the expansion of the infrastructure for gas gathering,transmission and distribution nationwide.
13) Intensification of promotional activities for the use of gas and change over togas by industrial and domestic consumers.
14) Implementation of urban and regional planning regulations for effective
distribution of natural gas.
15) Embarking on deliberate exploration for gas in all parts of the country.
Tar Sands
16) Continuation of detailed exploration activities and mapping and exploitation of
the Tar Sands deposits in the country.
17) Providing appropriate financing facilities to support indigenous investment in
tar sands development.
Coal18) Review, improvement and effective implementation of measures for the
production of coal stoves and the establishment of coal-based industries.
19) Establishment of smokeless coal pilot projects for the promotion of the use of
smokeless coal as an alternative to fuelwood.
20) Introducing clean coal technologies into coal utilization.

Nuclear21) Acquisition of nuclear research facilities and expansion of their applications in
manpower training, agriculture, medicine and industry.
22) Completing the accelerator project and industrial irradiator.
23) Commencement of the exploitation of the nuclear mineral resource deposits in
Nigeria.
24) Enforcement of Nuclear Safety and Radiation Protection Regulations.
25) Establishing a nuclear radiation surveillance programme for the protection of
the environment.

Hydropower
26) Introduction of alternative technological options to reduce the impact of water
shortage on hydropower plants.
27) Encouraging the private sector in the establishment and operation ofhydropower plants.
28) Establishment of basic engineering infrastructure for the production ofhydropower plants equipment and accessories
29) Establishment of mini - and micro- hydropower plants.
Fuelwood30) Ensuring the availability and effective distribution of kerosene and other viable
alternatives to fuelwood.
31) Conferment of reserve status on greater acreage of forest and establishment ofan effective system of forest regeneration.
32) Development of appropriate pricing structure to encourage substitution fromfuelwood to alternative fuel types.
Environment33) Implementation of programmes for the attainment of set targets for the
mitigation and control of major energy related environmental problems.
Solar, Biomass and Wind
34) Continuation of the establishment and monitoring of renewable energy pilot
projects and other overflow short-term activities.
35) Establishment of pilot projects to assist local entrepreneurs in the manufactureof biomass energy conversion devices.
36) Enabling the establishment of facilities for the manufacture of renewableenergy equipment and devices such as solar cells, PV panels and systems, windenergy equipment and biogas generators, etc.

Other Renewables
37) Continuation of data gathering, storage and dissemination activities while
encouraging R & D activities in the less developed renewables with a view topossible exploitation.
38) Prioritizing the level of need, technological developments and viability ofemerging renewable energy resources.
Electricity
39) Implementation of the programme for the liberalisation and privatisation of theelectricity sub sector.
40) Encouraging off-grid generation and supply of power in remote or isolatedareas.
41) Establishing a Rural Electrification Fund to facilitate electrification in the rural
areas.
Agriculture42) Ensuring wider adoption of animal traction and simple agricultural
technologies that can use multiple energy resources.
43) Training of existing extension personnel in the effective dissemination of the
newly developed energy technologies for agriculture.
Transport
44) Rehabilitation and expansion of the road, rail and river transport network as
well as port facilities for the handling of coal.
45) Development and implementation of appropriate strategies to attract
investments in natural gas pipeline networks and to promote conversion tonatural gas for road, river and rail transportation.
46) Encouragement of the building of natural gas filling stations as part of road,river and rail networks.
47) Implementation of the approved recommendations of the study of the transport
fuel distribution system.
48) Implementation of the approved recommendations from the investigations on
the appropriate energy efficient transport systems, strategies and equipment.
Energy Efficiency and Conservation49) Implementation of the codes, standards, regulations and guidelines on energy
conservation and use of energy- efficient methods, equipment, machineries andtechnologies in agriculture, industry, building design and construction, etc.
50) Establishment of expanded use of energy efficient mass transportation andcommunication systems.

Research, Development and Training51) Establishment of a National Electricity Research, Development and Training
Institute to undertake R, D & T activities in generation, transmission anddistribution of electricity, and Zonal Training Centres for the training ofvarious cadres of professional and skilled manpower for the electricity sub
sector.
52) Development, through adequate funding, of the capabilities of the petroleum
training institutions to include R & D activities on oil and gas related issues
and on tar sands for the production of lubricants and other heavy oil products.
53) Adequate provision of equipment for the energy related research, development
and training institutes and centres to enable them provide the necessary
facilities and services needed by enterprises involved in the development of theenergy sector.
54) Establishing training programmes for the development of specialized energy
manpower.

Finance55) Establishment of a special risk fund scheme for the commercialization of new
and emerging energy technologies, such as renewable energy technologies.
56) Encouraging the attraction of long-term financing from international financeinstitutions comprising international capital markets and brokerage firms andallowing international brokerage firms to establish and operate in Nigeria.
57) Encouraging the establishment of offshore banking units to attract regularinflow of off-shore funds.
Indigenous Participation
58) Putting in place other incentives, appropriate to each energy sub-sector, which
will promote indigenous private sector participation and competitiveness in the
sub-sector.
59) Encouraging the establishment of energy sector production and service
industries by indigenous investors.
Long Term Measures
General1) Review, improvement and sustenance of medium-term measures.
2) Effective Nigerianization of the personnel in the energy industries.
3) Review, strengthening and sustaining of the implementation of the nationalenergy masterplan.
4) Full integration of renewable, nuclear and conventional energy resources into
an optimal energy mix.

Oil5) Ensuring the attainment and maintenance of a minimum crude oil andcondensate reserve of 40 billion barrels and a production capacity of at least 4
mbpd.
6) Complete privatization of the petroleum processing industries.
7) Further expansion of the transmission and storage facilities for petroleum
products to achieve at least 90-days strategic reserves.
Natural Gas
8) Putting in place an effective nationwide infrastructure for gas gathering,transmission and distribution, and for the export of natural gas.
Tar Sands
9) Continuation of exploration activities to identify and quantify areas with tar
sands deposits in Nigeria.
10) Establishment of a tar sands production and processing industry in the country.
11) Development and implementation of a strategy for discouraging theimportation of heavy crude oil.
Nuclear12) Planning the introduction of nuclear power into the national energy mix.
13) Designing, constructing and commissioning of nuclear power plants.
Hydropower
14) Encouragement of the wide-spread construction of mini- and microhydropower
plants.
Solar, Biomass and Wind
15) Encouragement of the wide spread production and installation of renewableenergy systems.
Electricity16) Establishment of the infrastructure for the local manufacture of electricalequipment, devices and materials.
Finance17) Internationalization of Nigeria's capital market to enable Nigerian corporate
units stocks, listed in the international stock exchanges to attract inflow offoreign investment capital.

Environment18) Ensuring adequate environmental standards for all energy production andutilization processes.
1.

PAST ENERGY DEMANDAND SUPPLY OF NIGERIA

The past Energy demand and supply of Nigeria could be understood looking at
publication released by the US Energy Information Administration, in a systematic order:

the

Nigeria, Africa’s most populous country, is experiencing its longest period of civilian rulesince independence from the United Kingdom in 1960. The country had not held successful
elections under a civilian government since independence.
Oil Production
Nigeria is the largest oil producer in Africa and the tenth largest producer of crude oil in theworld. In 2005, total Nigerian oil production, including lease condensates, natural gas liquids
and refinery gain, averaged 2.6 million bbl/d (of which 2.4 million bbl/d was crude oil). With
the help of new projects coming online, the Nigerian government hopes to increase oil
production to 3 million bb/d in 2006 and 4 million bbl/d by 2010.

In recent years, Nigeria has experienced increased pipeline vandalism. In October 2005, apipeline fire in the south-western Delta State of Nigeria resulted in the deaths of about 60
people. This was followed by a December attack, in which armed men in speed boats
dynamited Shell’s pipeline in the Opobo Channel. In January 2006, a pipeline attack from theBrass Creek fields to the Forcados terminal forced Shell to announce a force majeure on
Forcados commitments to end-February. Additional attacks made on the pipeline and the
Forcados terminal in Februarymade it necessary for Shell to extend the force majeure beyond the end-February date. Shellestimates that 455,000 bbl/d of its oil production is currently shut-in because of the attacks. A
February 2006 attack on the Escravos pipeline, that supplies oil to the Warri refinery, caused
the refinery to shutdown. Officials are unsure of how long it will take to repair the damage.
Nigeria had re-commissioned the Excravos-Warri pipeline in January 2005 after 18 monthsof repairing the damage caused by sabotage during the 2003 Niger Delta Crisis. In addition to
pipeline vandalism, Nigeria has seen an increase in kidnappings of expatriate oil workers in
the Niger Delta region. In January 2006, four foreign employees of Royal Dutch Shell were
kidnapped and then held for 19 days before being released on “humanitarian grounds”. In
February 2006, nine additional oil workers were kidnapped in the Niger Delta region. The
Movement for the Emancipation of the Niger Delta (MEND) is taking responsibility for the
kidnappings and for blowing up a crude oil pipeline owned and operated by Royal Dutch
Shell. As of March 3, 2006, six of the nine hostages were released, but MEND has stipulated
numerous conditions that must be met before the remaining three hostages will be released.
Chief among the conditions is the release of Ijaw prisoners and the establishment of a United
Nations inquiry that would assess the Niger Delta problem.
Despite the recent attacks on Shell's oil facilities, the company’s deepwater Bonga field
began producing oil at the end 2005. Bonga is estimated to hold recoverable reserves of 600
million barrels of oil. At peak production, the field will produce around 225,000 bbl/d and
150 million cubic feet (MMcf) of natural gas. Oil from the field will be stored in a floatingproduction, storage and offloading (FPSO) unit, with a capacity of 2.0 million barrels.
ExxonMobil produces around 750,000 bbl/d of oil in Nigeria. The company plans to invest$11 billion in the country's oil sector through 2011, with the hope of increasing production to
1.2 million bbl/d. The majority of the increase will occur at the 150,000-bbl/d Erhadevelopment, which is located on Block OPL 209. First production is expected in March
2006, with output increasing to 200,000 bbl/d by the end of the year. Oil from Erha will be
stored in a FPSO, with a capacity of 2.2 million barrels oil. Very Large Crude Carriers(VLCC), capable of holding up to 300,000 deadweight tons will be used for exporting the oilfrom the terminal. ExxonMobil also operates the Yoho field, with current full-field output ofaround 150,000 bbl/d. Yoho contains around 400 million barrels of oil reserves. Yoho will be
re-injected with associated natural gas to maintain field pressures and to eliminate natural gas
flaring. The $1.2 billion field is located in the shallow waters of Block OML 104.
ExxonMobil's Bosi, and Eti/Asasa fields with capacities of 120,000 bbl/d, and 25,000 bbl/d,
respectively, are scheduled to come online between 2006 and 2007.
Total, Chevron, Agip, and ConocoPhillips are also involved in the Nigerian oil sector. Output
at Total's Amenam field reached 120,000 bbl/d in January 2005. The Amenam field contains
reserves of around one billion barrels of oil equivalent. Total's Akpo field is expected tocome online in 2008, with estimated output capacity of 225,000 bbl/d. In 2004, Chevron
produced an average of 366,000 bbl/d of oil, while Agip produced 255,000 bbl/d of oil.
In past years, the amount of oil that Nigeria produced has led to disputes with theOrganization of Petroleum Exporting Countries (OPEC), as Nigeria frequently exceeded its
production quotas. The multinationals see Nigeria's OPEC production quota as a major
hindrance to increased production at several deepwater fields. Currently, Nigeria’s OPEC
quota for crude production is 2.3 million bbl/d. In January 2006, Nigerian Minister of State
for Petroleum, Edmund Daukoru, became the new OPEC president. Industry analysts haveindicated that he will be faced with thedouble challenge of guaranteeing cohesion among OPEC members, while allowing Nigeria toincrease its oil production.
Refining and Downstream
Nigeria's refining capacity is currently insufficient to meet domestic demand, forcing thecountry to import petroleum products. Nigeria's state-held refineries (Port Harcourt I and II,
Warri, and Kaduna) have a combined nameplate capacity of 438,750 bbl/d, but problems
including sabotage, fire, poor management and a lack of regular maintenance contribute to
the current operating capacity of around 214,000 bbl/d. The Nigerian government is granting
permits to build several independently-owned refineries in Nigeria. Sapele Petroleum Limited
is waiting for final approval to construct a $105-million, 120,000 bbl/d oil refinery in Delta
State. The refinery is one of the more probable to be built and could save Nigeria as much as$2 billion in costs for refined petroleum imports.
Nigeria is trying to privatize state entities by selling NNPC's four oil refineries,
petrochemicals plants, and its Pipelines and Products Marketing Company (PPMC).
However, multinational oil companies have shown little interest in investing in refinery
privatization. The Nigerian government recently opened negotiations with Libyan, Indian,and Chinese investors. In July 2004, the Group Managing Director of NNPC announced thata two-year program was underway with Accenture and Shell Global Solutions to reengineer
PPMC to make it competitive in global markets.
Considerable opposition to the proposed measures have been voiced by the National Union ofPetroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior
Staff Association of Nigeria (PENGASSAN), which fear that job losses and higher productprices will result from the privatizations. In February 2005, Majestic Oil (Sierra Leone)bought the Nigerian government's 48.4 percent stake in the West Africa Oil Refinery inFreetown. Majestic also acquired Unipetrol Nig LPC's 24.2 percent share, when the company
failed to invest in the rehabilitation of the facility.
Natural Gas
The OGJ estimates that Nigeria had an estimated 185 trillion cubic feet (Tcf) of provennatural gas reserves as of January 2006, which makes Nigeria the seventh largest natural gas
reserve holder in the world and the largest in Africa. In October 2004, Nigeria announced thatits natural gas reserves could be as high as 660 Tcf. The government plans to raise earnings
from natural gas exports to 50 percent of oil revenues by 2010. However, NNPC estimatesthat $15 billion in private sector investments is necessary to meet its natural gas development
goals by 2010.

The vast majority of natural gas found in Nigeria is associated, meaning that it occurs incrude oil reserves as free gas. Because many of the fields lack the infrastructure to produce
the associated natural gas, it is flared. Nigeria flares more natural gas than any other country
in the world, with 43 percent of its total annual natural gas production being flared. NNPC
estimates that Nigerian flared natural gas accounts for approximately 20 percent of the world
total. Nigeria is working to end natural gas flaring by 2008. However, Shell announced in its
2004 People and Environment Annual Report that it would not be able to meet the 2008 goalof eliminating natural gas flaring.
Production
A significant portion of Nigeria’s natural gas is processed into liquefied natural gas (LNG).
Nigeria's most ambitious natural gas project, the $3.8 billion NLNG facility on Bonny Island,
was completed in September 1999. In January 2006, NLNG sent its first shipment of LNG
exports to the United States from its newly-commissioned fourth train. The company’s fifth
train began operating in January 2006 as well. The additional two trains have increased
annual production capacity to 17 million tons per year of LNG. Plans have been approved fora sixth train (to come online in 2007), which is expected to bring total capacity to 22 million
tons per year. The facility is currently supplied from dedicated (non-associated) natural gas
fields, but it is anticipated that, within a few years, half of the input natural gas will consist of
associated(currently flared) natural
gas
from existing oil fields.
In January 2005,
ExxonMobil signed a memorandum of understanding (MOU) with NNPC to study thepossibility of constructing a second LNG plant on Bonny Island to come online in 2010. The
plant would produce around 4.8 million tons per year of LNG.
Plans for additional LNG facilities in Nigeria are also being developed. In January 2005,
Chevron announced the possibility of constructing a $7 billion LNG plant, OK-LNG, at
Olokola in western Nigeria. The plant would have an initial capacity of 11 million tons per
year and amaximum capacity of 33 million tons per year. Construction is expected to begin in 2006,
with completion in 2009. Chevron’s final investment decision (FID) deadline for the projectis March 2006. If Chevron decides not to financially commit to the project, Shell has been
named as a possible alternative operator. In December 2005, ConocoPhillips, Chevron andAgip met with NNPC to sign a shareholders agreement for the establishment of the $3.5
billion Brass River LNG plant. If the project continues along the current timetable, its two
LNG trains will be operational by late 2009. A FID for the project is scheduled to be made in
September 2006.
Chevron's Escravos Gas Project (EGP) came online in 1997. In 2000, total capacity was 285
MMcf/d of natural gas. The facility’s output capacity will be expanded to 630 MMcf/d ofnatural gas in 2007. Chevron is also working on the Escravos gas-to-liquids (GTL) projectthat is expected to have production capacity of 33,000 bbl/d. Completion of the GTL projectis scheduled for 2009. However, the project has been slowed by community complaints over
not employing local residents to work at the facility. It is likely that Chevron will look forstate intervention to help resolve the issue. A year earlier, the Nigerian government halted theimplementation of the Escravos GTL project due to high costs. Future plans for the project
include linking the Escravos pipeline system with the West African Gas Pipeline (WAGP) for
natural gas export to Benin, Togo and Ghana.
Electricity
The Nigerian power sector operates well below its estimated capacity, with power outages
being a frequent occurrence. In 2003, total installed electricity capacity was 5.9 gigawatts(GW). Total electricity generation during 2003 was 15.6 billion kilowatthours (Bkwh), while
total consumption was 14.5 Bkwh.
According to Power Company Holding of Nigeria (PHCN), the country’s peak electricdemand in February 2006 was 7,600 megawatts (MW), but actual generation capability was
3,600 MW. The discrepancy between electricity demand and actual generation is mostly due
to low water levels and inadequate plant maintenance. During 2005, electricity generation
capacity fluctuated between 2,600 MW and 3,600 MW. The hydropower stations Kainji,
Jebba, and Shiroro have seen generation affected by insufficient water, and the Lagos Egbin,
Delta, and Port Harcourt Afam plants are also operating at below capacity due to poor
maintenance.
Only 40 percent of Nigerians have access to electricity, the majority of whom areconcentrated in urban areas. Despite endemic blackouts, customers are billed for services
rendered, partially explaining Nigeria's widespread vandalism, power theft and PHCN's
problems with payment collection. Nigeria’s Bureau of Public Enterprises (BPE) hopes to see
increased stability in Nigeria’s electricity sector once the privatization of PHCN takes place.

Sector Organization
The Nigerian power sector is controlled by state-owned Power Company Holding of Nigeria(PHCN), formerly known as the National Electric Power Authority (NEPA). In March 2005,

President Obsanjo signed the Power Sector Reform Bill into law, enabling private companies
to participate in electricity generation, transmission, and distribution. The government has
separated PHCN into eleven distribution firms, six generating companies, and a transmission
company, all of which will be privatized. Several problems, including union opposition, havedelayed the privatization, which is now scheduled for 2006. In February 2005, the WorldBank agreed to provide PHCN with $100 million to assist in its privatization efforts.
Environment
While Nigeria's development of the oil sector has been good for the country’s economy, oil
sector development has had an adverse impact on the country’s environment. Oil extractionin the Niger Delta region has caused severe environmental degradation, owing to the legacyof oil spills, lax environmental regulations, and government complicity during military
regimes that once governed the country. Although the situation is improving with more
stringent environmental regulations for the oil industry, marine pollution is still a serious
problem. Air pollution from natural gas flaring, exhaust emissions from the explosion in car
ownership, and electricity generators continue to leave Lagos shrouded in smog.
The use of solid biomass, such as fuel wood, is prevalent and constitutes a major energy
source for rural Nigerians. The production and consumption of commercial renewable energyin Nigeria remains quite limited. With Nigeria's population continuing to increase, thepressure on the country's environment appears likely to increase as well, even with the added
focus on cleaning up the Niger Delta and tightening environmental laws and regulations.

Energy Overview

Proven Oil Reserves (January 1, 2006E)
Oil Production (2005E)
Oil Consumption (2005E)
Net Oil Exports (2005E)
Crude Oil Refining Capacity (2006E)
ProvenNaturalGas
Reserves(January
2006E)Natural Gas Production (2003E)
Natural Gas Consumption (2003E)
Net Natural Gas Exports (2003E)
Recoverable Coal Reserves (2003E)
Coal Production (2003E)
Coal Consumption (2003E)
Electricity Installed Capacity (2003E)
Electricity Production (2003E)
Electricity Consumption (2003E)
Total Energy Consumption (2003E)

35.9 billion barrels
2,629.4 thousand barrels per day, of which
93% was crude oil.
319.3 thousand barrels per day
1,310.1 thousand barrels per day
438.8 thousand barrels per day
1,184.7 trillion cubic feet
0.7 trillion cubic feet
261.7 billion cubic feet
490.6 billion cubic feet
209.4 million short tons
0.1 million short tons
0.1 million short tons
5.9 gigawatts
15.6 billion kilowatt hours
14.5 billion kilowatt hours
1 quadrillion Btus*, of which Oil (64%),
Natural Gas (27%), Hydroelectricity (8%),
Coal (0%), Nuclear (0%), Other Renewables

Total Per Capita Energy Consumption (2003E)
Energy Intensity (2003E)

7.9 million Btus
7,278.1 Btu per $2000-PPP**

Environmental Overview
Energy-Related Carbon Dioxide Emissions (2003E)

CarbonPer-Capita,
Energy-Related(2003E)
Carbon Dioxide Intensity (2003E)

Dioxide93.5 million metric tons, ofwhich Natural Gas (52%), Oil(48%), Coal (0%)
Emissions0.8 metric tons
0.7 Metric tons per thousand$2000-PPP*** The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro,
nuclear, geothermal, solar, wind, wood and waste electric power. The renewable energy
consumption statistic is based on International Energy Agency (IEA) data and includes
hydropower, solar, wind, tide, geothermal, solid biomass and animal products, biomass gas
and liquids, industrial and municipal wastes. Sectoral shares of energy consumption andcarbon emissions are also based on IEA data.
1.

OUTLOOK OF ENERGY DEMAND AND SUPPLY OF NIGERIAThe outlook of Energy Demand and Supply in Nigeria can be summarized as in theInternational Journal of energy Policy, research and Development (JEPRD) published by theenergy Commission of Nigeria. JEPRD is to serve as the vehicle for dissemination ofresearch and development efforts and strategic policies on Energy in Nigeria as well as fromother parts of the world, deemed relevant to Nigeria Energy development. This study isactually the work of Professor Sambo, A.S who is the Director General, Energy Commissionof Nigeria and Vice-Chair, World Energy Council – Africa (WEC-Africa). The paper
highlights the energy outlook of Nigeria’s energy demand over a period of 30 years; in which
bottom-up analysis of Nigeria’s energy demand over a period 2005-2030, conducted by
Energy Commission of Nigeria, for meeting the Socio-economic development aspiration of
Nigeria. The Energy requirements for the country’s development aspirants were assessed
within the framework of scenario analysis by using the model for analysis of Energy Demand(MAED), which was developed by the International Atomic Energy Agency (IAEA).
The energy commission of Nigeria is required by law to prepare, review and update National
Plans periodically to ensure that all reasonable demands for Energy are met in a sustainable
manner.
Having applied the model for analysis of Energy Demand to develop an outlook for theperiod 2005-2030, the results of the energy analysis gives the energy implications of thedevelopment

aspiration of Nigeria and the challenges of supplying the projected energy demands. The
structure of Energy consumption in the base year that current systems of energy supply anduse are clearly not sustainable in economic, environmental and social terms, withoverdependence on traditional fuel and low modern energy (electricity and petroleum
products) consumption and generally low energy and electricity consumption per capita. With
more vigorous government action, the trend can be changed to a sustainable path. There
should be a strong commitment to increase investment in the provision of adequate modern
energy sources in order to power the development aspirations. The aspirations cannot be met
with current energy system based mainly on traditional fuels and inadequate and unreliable
modern energy (Ojosu et al, 2009). Reliance on importation of motor fuels is not sustainable
in the long term. Government needs to create the enabling environment to encourage private
sector participation in the establishment and management of refineries in the country.
The country has four refineries with a nominal capacity of 445,000 bpd. Presently, averagecapacity is less than half of the total installed capacity. Much of the country’s current
consumption is imported. Natural gas is used for power production, LPG for heating andexports as liquefied natural gas. The West African Gas Pipeline opens as additional
opportunity for gas exports. Presently the nominal electricity generating capacity is less than
6,000 MW. Actual output represents about half of the installed capacity. Government plans toboost power production through new gas plants and Independent Power Producers (IPPs).
With the privatization of the Power Sector for effective Private Participation
upgrading of the transmission lines, improved power supply is guaranteed.

and

the

Access to cost-effective and sustainable energy services is critical to re-launching the
Nigerian economy and meeting MDG and NEEDS targets. However, barely 40 percent of all
Nigerians have access to electricity services. This leaves about one hundred million Nigerian
literarily in the dark, while generation shortages and poor transmission and distribution
infrastructure consigns the industrial and services sectors to under-performance. The power
sector is so inadequate that it constitutes a major roadblock to economic progress and social
well-being. The economy suffers from petroleum product supply constraints as well as poor
gas infrastructure and utilization. Beyond the formal sector, denudation of forest resources
and wood scarcity remain a crisis unfolding in slow motion. Biomass energy accounts for
37% of aggregate national demand, and 95% of rural energy use. The diminishing stock offuel wood will compound the problem of poverty reduction and challenge efforts to empower
women, children and fuel wood merchants.
The National Energy Policy (NEP) sets the framework for the development of the nation’s
renewable energy resources. Among other things, the policy seeks to ensure the developmentof the nation’s energy resources for the achievement of national energy security and an
efficient delivery system with optimal energy resource mix. It further aims at guaranteeing
adequate, reliable and sustainable supply of energy at appropriate costs and in anenvironmentally friendly manner.

1.

MAJOR DIFFICULTIES AND BOTTLENECKS CURRENTLY FACED IN
FORMULATING ENERGY POLICIES IN NIGERIA

The difficulties faced in the formulation of Energy Policies could be enumerated under thefollowing:(i)
Political Influence: In Nigeria, before now change of government through military
coup was very rampant and each government comes with its own interests, which most often
are in conflict with the previous governments and even in the democratic government, thepassage of the drafted policies could take a long time because of personal interests.
(ii)
Stakeholders Influence: The individual stakeholders will always want to see that thepolicies do not bear on their freedom to operate.
(iii)
Lack of Experienced Personnel: Most of the workforce is not technically competent todraft a workable policy for the industry because of lack of good understanding of the sector.
(iv)
Lack of Adequate Information and Data: Vital information and data needed toformulate a workable policy are not usually available because of bureaucratic process.
(v)
Multicultural Diversity of the Country: This sometimes makes the country to bepolarized along ethnic and religious sentiments as a result; coming to terms becomes difficult
among the political class.
(vi)
External Influence: Sometimes the Influence from the international communities
could pose a problem in the system.

2.
SUBJECTS TO STUDY(i)
Policy framework and mechanism for attracting investors in the area of Grid and OffGrid potentials in my state in order to boost power supply.
(ii)
Tools for developing energy policies that will encourage investors in developing Gridand Off-Grid potentials that will serve communities where available

REFERENCE(1)
The Nigerian Electricity Regulatory Commission Guide to the development of
independt
power plants(2)

Africa Energy and Mining(3)

Africa Oil and Gas(4)

US Energy information Administration(5)

Energy Commission of Nigeria(6)

Edenikiuju, 2005, Analysis of the cost of the infrastructures failure in a developing
economy.

(7)

Adeyeye 2008, Energy pricing policy and problem in Nigeria, OPEC review, Vol. 15.
Issue 3(8)

Ikeme and Ebohon, 2005 Nigerians electric power reform what should form the key
objectives
Contact : report@tky.ieej.or.jp