Monday, March 07, 2022 / 10:00 AM / by Ottoabasi Abasiekong for WebTV / Header Image Credit: Africa Institute

One of the lessons from the Russian-Ukrainian conflict is the need for Nigeria to position itself as an alternative gas supplier to Europe. Dr. Andrew Nevin, the Chief Economist of Price Waterhouse Coopers, PwC Nigeria, stressed this while analyzing the "Impact of the Russian-Ukraine conflict on Nigerian Businesses".

According to him, this was an opportunity for Nigeria to accelerate its gas strategy and engage leading European economies like Germany and France on gas export to the region.

He believed Nigeria serving as an alternative gas supplier was good for Europe's energy security and stability. The expert harped on the need for the Federal Government and the Nigeria National Petroleum Corporation (NNPC) to develop a compelling business case for gas exports.

Considering the global economic uncertainties that have emanated from the Ukrainian crisis, he noted that Nigeria's ability to supply gas to Europe would be a game-changer in the energy market.

Speaking further, the economist observed that if Nigeria secures a deal to supply gas to Europe, it will positively affect its financial position and revenue base.

Looking at the investments in the Nigerian oil and gas market for 2021, he observed that it was low and emphasized the need for an enabling business environment that can attract significant foreign direct investments into the country.

He added that Nigeria has not been able to leverage the current international crude oil price regime of over $100 per barrel due to low production at 1.2m bpd. "If Nigeria steps up production to the level of 1.7m bpd and the over $100 per barrel regime is sustained, then the country will be in a good fiscal position".

Assessing the impact of the conflict on the global supply chain, he said, unlike the COVID 19 pandemic, the crisis is hurting the Russian economy and citizens. He said the economic sanctions would weaken Russia as its GDP could decline by 7%, possibly catastrophic.

Providing further insight, he highlighted that the size of the Russian economy is smaller than Canada and even Texas in the United States of America. He believed that the Russian citizens would bear the brunt of the sanctions alongside western companies exposed to the nation through their investments.

For the lessons from Russia, he said, "The Russian experience shows that when you plug into the global financial system, any horrific action in a part of the community will come with huge consequences".

Last week, the Group Managing Director of the Nigerian National Petroleum Corporation Limited (NNPC) delivered a speech at the "2022 Nigerian Energy Independence Conference", informing stakeholders that the growth of the gas business and low carbon-intensive oil remain the focus of the company.

According to the BBC, Russia supplies about 40% of the EU's natural gas imports. Most of the rest comes from Norway and Algeria. Russia sends gas to Europe through several main pipelines - such as Nord Stream 1, Yamal-Europe and Brotherhood.