The ongoing disruptions in the international energy industry present a unique opportunity for the Nigerian oil and gas industry to attract investments and serve as one of the leading hubs to meet global energy needs.
The Executive Secretary of the Nigeria Content Development and Monitoring Board, (NCDMB) Engr. Simbi Kesiye Wabote stated this recently in a lecture he delivered at the Society of Petroleum Engineers – Oloibiri Lecture Series and Energy Forum (SPE – OLEF) 2022 held in Abuja.
He spoke on the theme, “Global Energy Transition: Implications on Future Investments in the Nigerian Oil and Gas Industry,” and maintained that the clamour by developed countries to reduce carbon emissions through cutting the utilization of fossil fuels is because those nations have run out of hydrocarbon reserves.
The Executive Secretary outlined his perspectives on global energy transition, its implications on global energy security and investments, and the opportunities for the oil and gas industry in Nigeria, pointing out that the outcome of energy transitions has always been the redistribution of the constituents in the energy mix rather than the outright swap of one form of energy for another.
He said the rush to move the world away from fossil fuels has resulted in first world countries shifting funding away from the development of hydrocarbons towards renewable energy, and energy shortage, causing a decline in the supply of hydrocarbons due to lack of investments because the pace of the shift to renewable energies is unable to meet world energy demand.
Bearing in mind the technological capability and natural endowments as key drivers to the energy mix, the Nigerian Content Chieftain observed that divestments have resulted in the emergence of indigenous companies playing major roles in exploration and production activities such that companies like Aiteo, First E&P, Eroton and others have acquired assets and are now responsible for the production of about fifteen percent of the nation’s oil and more than sixty percent of domestic gas.
He decried the divestment of the IOCs and their reluctance to make further investments in oil and gas which has resulted in the repatriation of capital out of Nigeria. He lamented that this has stifled the nation’s economy of the much-needed foreign exchange and funds used as loans to acquire oil and gas assets instead of developing new production assets. He also hinted that energy shortage has provided a huge opportunity for the Nigerian oil and gas industry by diversifying oil and gas energy hubs even as it works on adding renewables to the global energy mix to ensure energy security.
Wabote canvassed for a balance between the drive for renewables and new investments in fossil fuels, warning that a misalignment in the transition strategy will result in supply and demand disruptions as witnessed in the current situation in Europe.
He further suggested that as the world continues to expand the options of sources of energy available for use, it should be open to welcome new additions without discarding existing ones. He however, bemoaned the demonizing or de-marketing of other energy sources and setting unrealistic deadlines for countries to abandon fossil fuels. He expressed hope that nations will jealously guard their local sources of energy to ensure it remains in their energy mix for the benefit of its people.