With the global oil industry facing disruption amidst a move towards clean energy, Nigeria’s crude oil has its glory days numbered.
This is according to the Minister of State for Petroleum, Timipre Sylva, who cautioned against the economy’s over-reliance on oil during a meeting with the leadership of the National Assembly on Monday.
Speaking on the need to pass the Petroleum Industry Bill as soon as possible, Sylva argued that Nigeria has to make the best of use of the remaining days petroleum has left in the global market.
He noted that, “Forecasts in oil industry circles indicate that oil will play less and less role in the global economy. Specifically, by the year 2040 which is 20 years away, the relevance of oil in the global economy will reduce by 50 percent.”
“The days of oil are numbered; deposits of coal did not run out before the world moved away from it. Today, the world is talking about alternative energy and we should also move; we should take advantage of making hay while the sun shines.”
According to the World Oil Outlook 2040 report released by the Organization of the Petroleum Exporting Countries [OPEC], oil and gas are expected to serve about 53% of the global energy needs in 2040. In 2015, fossil fuels had an 81% share of the global energy mix; the number is only expected to drop to 74% by 2040.
The wheels of the Nigerian economy run on oil. In 2019, oil revenue was 83.9% of total exports.
However, the government appears to be making slight moves away from oil, even within the energy sector.
On Tuesday, the Energy Commission of Nigeria [ECN] disclosed that the Federal Government is making strategic moves towards investing in renewable energy. This was announced in Abuja by the Director-General/Chief Executive Officer of the ECN, Professor Eli Bala, during an event tagged “National Stakeholders’ Consultative Forum on Scaling up Inter-Connected Mini-Grids Development in Nigeria: Current Status, Challenges and Prospects”.
According to Professor Bala, this is aimed at “de-risking” the electricity sector so as to make power more readily available, attract investment and boost the industry’s cashflow profile.
This comes months after the Federal Government launched the $200 million Nigeria Electrification Project, a renewable energy initiative to light up 105,000 homes using off-grid energy.