The Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mallam Mele Kyari, has said Nigeria deserves to have the freedom to adopt a more gradual and flexible approach to energy transition.
Speaking yesterday while presenting a paper at the 40th annual international conference and exhibition of the Nigerian Association of Petroleum Explorationists, the NNPCL boss, who spoke on the topic: Global Energy Transition and the Future of the Oil and Gas Industry: Evolving Regulations, Emerging Concepts, and Opportunities, noted that rapid demographic change would continue to drive up the demand for energy services across Africa in the coming decades.
Kyari, who was represented by the Executive Vice President, Upstream, Adokiye Tombomieye, stressed that oil demand in Africa stood at an average of 4.36 million barrels per day in 2022.
He noted that although Africa has the world’s lowest levels of per capita use of modern energy, its demand is set to increase with growths in population and incomes.
But the NNPCL boss regretted that 970 million Africans lack access to clean cooking gas.
Kyari said the energy mix has become more diverse with Africa still dominated by fossil fuel with hydropower making the only meaningful renewable energy contribution.
He said: “It is, therefore, our firm position that fossil fuel will continue to contribute more than 50 per cent to the energy mix in Africa and possibly the rest of the world.
“However, the most important question for this strategic gathering is around competitiveness of the hydrocarbon sources, compared to renewal comparatives in terms of cost, energy contents and sustainability.
“Recent happenings in the Russian-Ukraine crises have seen the resurgence for the need of fossil fuels and, in some cases, adverse use of high-carbon generating energy sources, like coal. This also points to the fact that energy transition implementation has to be gradual.”
“It is, therefore, imperative for the industry, the Nigerian Association of Petroleum Explorationists (NAPE), and key stakeholders to rededicate ourselves towards scaling above the challenge posed by transition.
“One way to scale up is by delivering the most advantaged barrels to the world while paying attention to environmental sustainability through huge investments in technology and innovation.
“Nigeria and the rest of resource dependents would require oil to transit out of oil. However, we will remain sensitive to the growing global concerns relating to global warming, climate change, and the increased attention in national and international public discourse generally due to increasing environmental concerns resulting from the heightened concentration of greenhouse gases (GHG), which are associated mostly with fossil fuel combustion.
“This has led to renewed interest in low carbon-intensive and environmentally friendly energy sources.”
Kyari explained that currently the energy transition is moving very aggressively and major fund providers for petroleum upstream investment have become activists and anti-fossil advocates.
The NNPCL chief executive said the financing of oil and gas projects has become more complicated as banks, multilateral lenders, and investors are diverting capital away from fossil fuels to renewable energies.
“There is a universal acceptance of the need to gradually transit by reducing energy-related CO2 emissions to limit climate change.
“However, there is also a need to recognise that while aggressive energy transition programmes are being pursued in developed countries, many emerging countries, especially those with hydrocarbon-dependent economies, like Nigeria, require a more gradual and flexible approach to the energy transition mantra,” he said.