The galloping cost of Liquefied Petroleum Gas has continued to be a concern to Nigerians. This is despite the 802 trillion cubic feet of gas reserves the country boasts of. But experts and critical stakeholders in the sector have submitted that harnessing the 802 trillion cubic feet of gas reserves – 202 trillion cubic feet of proven gas reserves and about 600 trillion cubic feet of unproven reserves – in the country early remains pivotal in the next decade of the country’s existence. MUYIWA LUCAS reports.
It was a gathering of eggheads and critical stakeholders in the oil and gas sector. The setting was in Yenogoa, Bayelsa State, host of the 10th Practical Nigerian Content (PNC) Conference, organised by the Nigerian Content Development and Monitoring Board (NCDMB). There, hopes of a slide in the rising cost of gas may have been dashed, albeit, for now.
The Nigerian National Petroleum Company (NNPC) Limited, at the conference, gave an insight into the global development which has translated to almost every home locally. The company attributed the current global gas crisis to shortage of investments in the oil sector as activists, investors, and climate change advocates continue to mount pressure on banks and oil companies to withdraw funding for fossil fuel-related projects.
In his presentation at the event, the Group Executive Director, Upstream, NNPC, Adokiye Tombomieye, urged Nigeria to look inwards for financing of major projects as there had been a downward movement in investment in the oil and gas industry since 2000. But he stressed that with the Petroleum Industry Act (PIA) things would change from 2022. Tombomieye was represented by the Group General Manager, National Petroleum Investment Management Services (NAPIMS) Bala Wunti.
At the conference, with the theme: “Driving Nigerian Content in the New Dawn of the Petroleum Industry Act,” Tombomieye said: “We have seen the consequence of uncertainty in the industry. Investment and uncertainty never mix. Whether we go ahead with the energy transition or not, we have already created a monster and that monster is that we now have finance activists, investment activists that have come into the space to create problems for energy investment.
“Energy investment is being attacked and will continue to be attacked in the fossil fuels industry. Investment capital is now very discriminatory against fossil fuels, but not only that, it has become more and more impatient.
“Everybody wants to invest today and recoup the money tomorrow. Nobody wants to invest that money for 10 years, but I need to let you know that the upstream space is not a day’s job. You will invest today and wait for 10 years. These issues have created an impediment to investment.”
But the situation may have opened up another vista of opportunity for the country. With the price of gas skyrocketing daily globally, significant opportunities now abound for the country who daily seek means of financing its projects.
Last week in Benin, Edo state, guests converged on the University of Benin to celebrate its 51st Founders’ Day with a lecture themed “The Global Energy Transition and The Imperatives for Nigeria.”
Setting the tone for the lecture, the Country Chair of Shell Companies in Nigeria, Mr. Osagie Okunbor, said the country needed to adopt a two-pronged strategy for its energy transition programme, in response to the global call to reduce exploitation of fossil fuels, and production of Green House Gases (GHG).
Delivering his paper, Okunbor enumerated the approaches the country needed to adopt for a successful energy transition. One of these is an urgent optimisation of Nigeria’s energy resources for a speedy economic and industrial development of the country.
According to him, “Nigeria has gas in abundance around 202 trillion cubic feet of proven gas reserves and about 600 trillion cubic feet of unproven reserves. Harnessing these vast gas resources, and on time too, is key in the next decade of Nigeria’s existence.”
Besides, he noted that there is the need to equally have an intentional growth of the off-grid power and renewables industry, taking advantage of foreign financial support and technology transfer.
“The ongoing energy transition is here with us. As with other transitions, it is a journey that will involve multiple approaches, collective action and undoubtedly present new challenges and opportunities. Nigeria is well positioned to ride the wave of the current energy transition with its abundance of natural fossil fuels and renewable solar energy. We need to move with a greater sense of urgency and a clear sense of direction,” Okunbor said.
Gas flaring
According to Okunbor, Nigeria, as a country with abundant natural fossil fuel resources, cannot afford for international and multilateral agencies to stop funding the development of fossil fuels, particularly gas projects.
Noting that the energy transition was underway, Okunbor, who also doubles as the managing director of Shell Petroleum Development Company of Nigeria (SPDC), however, observed that the transition would move at different paces and produce different outcomes in different countries depending on local factors. He warned that the society, as a whole, faces a dual challenge to transition to a low-carbon energy future, dealing with how to manage the risk of climate change, while also extending the benefits of energy to everyone on the planet. This, he maintained, is a challenge that requires changes in the way energy is produced, used and made accessible to people.
He was emphatic that despite the efforts at decarbonisation, oil and gas would remain in the energy mix for some decades to come. This, he reckoned, is partly a consequence of the time needed for renewables to reach the necessary level of materiality. In part, he further explained, it is also a consequence of the lack of substitution options in some parts of the economy. He added that the world would need to meet its energy needs at the same time as it tackles climate change.
Okunbor noted that to actualise the government’s Decade of Gas agenda, Nigeria would need to unlock the domestic gas-to-power value chain; accelerate infrastructure development; drive gas-based industrialisation; and deepen domestic liquefied petroleum gas penetration. This is in addition to building a stable regulatory environment anchored on a willing-buyer-willing-seller pricing regime; grow the export and regional gas market and build local capacity and content for contractors and professionals in the gas sector.
“A transformation of the global economy is required, especially in the power sector, transport, buildings and industry – four main areas where energy is consumed and that produce a significant proportion of energy-related emissions of carbon dioxide (CO2),” he noted, even as he advocated for a significant shift in the consumption of energy in power, transportation, buildings and industry as key areas that will determine the long-term energy mix. “To tackle climate change, power generation, for example, must evolve to use a combination of more renewable sources of energy, as well as natural gas – the cleanest-burning of the hydrocarbon fuels,” he said.
He revealed that Shell was responding to the challenge of access to energy and the global drive to grow the renewable energy sector with its significant targeted investments on the platform of Shell’s Energy Access team and the Shell-seeded impact investing company- All On, to help close Nigeria’s energy gap.
“So far, All On has invested over $21 million in 40 off-grid energy companies in Nigeria and has driven over 40,000 solar connections across Nigeria to date,” he said.
