Even as the rest of the world seems to be agreed on shifting from fossil fuels, Nigeria, the 11th-largest oil producer in the world, is not in a hurry to drop the ‘black gold’.
At the third Nigeria International Petroleum Summit in Abuja on Monday, it resolved to stand against the rest of world in the shift, despite impending $13tn loss in revenue with drastic drop in global oil demand.
With the oil boom of the 1960s, the country jettisoned its agro wealth for petro dollars. Unfortunately, it failed to exploit the last 55 years of oil boom before the Coronavirus Disease and other parameters made mess of the black gold.
At the Abuja event, the country’s President, Muhammadu Buhari; Senate President, Ahmad Lawan; House of Representatives Speaker, Femi Gbajabiamila; Minister of State for Petroleum Resources, Timipre Sylva; and the Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari, were optimistic that hydrocarbons still had a future in Africa, with the growing population.
Insecurity, declining investments, high cost of producing oil and non-passage of the Petroleum Industry Bill create worries for world energy leaders that gathered at the NIPS.
With the transition from oil, Carbon Tracker, a global think-tank, had put cumulative revenue loss for oil-producing countries by 2040 at $13tn.
Uncertainties in the oil sector pushed the most populous black nation into financial crisis, leading to fresh $33.8bn (about N12.7tn). The Federal Government borrowed $28.5bn, while the states took $4.7bn. Another $6bn loan is being considered.
Buhari told investors and oil stakeholders at the event that increasing crude oil production to at least four million barrels per day and building a reserve of 40 billion barrels remained sacrosanct.
But elusive legal and regulatory frameworks, especially the two-decade-old PIB, have left most oil and gas projects on the drawing board, as the country misses out on Foreign Direct Investments estimated by the National Assembly at $235bn.
According to the President, who was Federal Commissioner for Petroleum and Natural Resources under the military regime of General Olusegun Obasanjo (now retired) in 1976, although energy transition is real, with cheaper renewable technologies, history has shown that human beings have inflexible appetite for energy.
Renewable sources, he added, do not have the capacity to cope within the foreseeable future, the President, who was represented by Sylva, said.
His words, “Fossil fuels will continue to be the source of dozens of petrochemicals feedstock that companies will transform into versatile and final materials for modern life. We cannot turn our back yet on more exploration, as discovery of new fields is crucial. We also need to address short-term opportunities using existing technology that can extend the life of mature fields. Nobody should doubt our commitment in this regard, given a bold move to issue new marginal fields’ licences.”
Lawan, on his part, said the administration was committed to addressing regulatory and fiscal issues in the sector, stressing that the PIB would be passed before the end of the month.
Also, Gbajabiamila promised speedy passage of the bill, to attract investment.
He, however, expressed concern over the future of the sector, noting that Nigeria must hastily explore its hydrocarbon resources.
The Secretary-General, Organisation of Petroleum Exporting Countries, Nigeria’s Mohammad Barkindo, who raised concern over pervasive insecurity in the country, sought collective efforts to manage recent economic shocks.
Nigeria still got international support for its policy at the event. The Secretary-General, Gas Exporting Countries Forum, Dr Yury Sentyurin, noted that the plans by the Federal Government to advance gas resources remained a right step in global direction, adding that recent gas projects, including the AKK pipelines, deserve commendation.
Gas will become dominant in the energy mix, and share of gas in the mix will move to 28 per cent from the current 23 per cent by 2050, Sentyurin added.
