Inefficient Dispute Resolution Hurts Gas Sector Investment, Warns NGA

The Nigerian Gas Association (NGA), is promoting sustainable development in the gas industry to stir industrialisation in Nigeria as capital inflows wanes.

But the group identified key issues that have challenged the growth of the sector.

Part of the concerns identified is dispute resolution and contractual clarity.

At an energy forum hosted by the NGA, stakeholders identified inefficient resolution mechanisms and unpredictable enforcement as persistent deterrents for long-term capital, particularly from international project financiers who price legal risk into their investment calculus.

The Association’s inaugural edition of its Legal Forum recently convened senior legal practitioners, policymakers, and industry leaders to examine what participants described as a structural gap between Nigeria’s gas policy aspirations and the commercial frameworks needed to realise them.

The forum, themed “Strengthening Nigeria’s Gas Legal Framework for a Low-Carbon, Commercially Viable Future,” produced a clear consensus: the Petroleum Industry Act, passed in 2021 after nearly two decades of legislative effort, has laid a credible foundation, but its transformative promise hinges on execution quality that Nigeria has yet to consistently demonstrate.

Nigeria’s gas sector has historically suffered from protracted commercial disputes and regulatory ambiguity that extend project timelines and inflate financing costs. Forum delegates argued that closing these gaps through clearer contract standards across the gas value chain and faster arbitration pathways is now as consequential as any infrastructure or fiscal incentive.

The stakes extend beyond domestic policy. As global energy investors weigh competing opportunities across Africa, the Gulf, and Central Asia, legal predictability has emerged as a decisive differentiator.

The event gathered for the first time executives, regulators, and attorneys whose opinion shows that the country’s contractual and regulatory infrastructure is not yet fit for the scale of investment its gas ambitions demand.

“Nigeria’s gas resources present a defining opportunity for economic transformation,” NGA President Aka Nwokedi said in his opening address. “But realising this potential will depend on building a legal framework that is transparent, predictable, and globally competitive.”

Participants stressed that Nigeria must demonstrate regulatory coherence and institutional alignment to attract the long-term capital required for gas monetisation at scale. ESG obligations and carbon management standards, they noted, must be embedded in enforceable frameworks rather than left to policy statements, as international investors increasingly subject prospective markets to rigorous sustainability screening.

The forum acknowledged the Tinubu administration’s stated priority of expanding gas infrastructure and boosting domestic utilisation, framing sustained policy continuity as a critical signal to investors evaluating decade-long commitments in the sector.

Nigeria holds Africa’s largest natural gas reserves and has positioned gas as the primary bridge fuel in its energy transition strategy. Yet monetisation has lagged, constrained by infrastructure deficits, pricing distortions, and the legal and regulatory uncertainties the forum sought to address.

Beyond its immediate outputs, the forum’s conveners framed it as the founding edition of a standing institution, a structured annual platform for aligning legal frameworks with fast-moving industry and market realities.

For a sector long accustomed to policy announcements without follow-through, the question delegates left with was whether this forum marks the beginning of a different pattern, or becomes another well-intentioned initiative that fades without implementation.