Lagos (Platts)--17Sep2009/603 am EDT/1003 GMT

Nigeria's hopes of solving the crippling energy supply problem confronting the OPEC member, rest on the successful negotiation of truce in the oil-rich Niger Delta region to allow the country to resume normal production of oil and gas, a government official said Thursday.

The country's junior Minister of Power Nuhu Wya said on state television that available power generating units in the country has increased now to 5,200 MW from around 3,000 MW previously, but that it would largely require good availability of gas to achieve the optimum output.

"The challenge is the gas supply. [Our] generation is over 70% gas-thermal power. This gas, most of it, comes from the Niger Delta--that is the line where we have serious challenges," Wya said.

"We are on course to achieve the 6,000 MW target and we hope to explore the current peace that is gradually returning to the Niger Delta region as well, to drive the set target," the minister said, adding that the current ceasefire observed by militants in the oil region has enabled the government to begin repairs of damaged pipelines.

President Umaru Yar'Adua in June offered amnesty to all militants in the Niger Delta to end unrest which has reduced Nigeria's oil capacity. Africa's top oil producer and the world's eighth largest oil exporter is currently battling with national energy supply problems. The country could only supply around 2,000 MW compared with the requirement of the country's 140 million-plus population estimated at 10,000 MW.

Wya said Nigeria expects to add another 4,800 MW generating units from power projects being undertaken by private companies including multinational oil majors Shell, ExxonMobil, Total and Chevron.

--Staff, newsdesk@platts.com