Minister of State Petroleum Resources, Mr Timipre Sylva, has said that Nigeria will take gradual and strategic steps in transitioning to renewable energy, saying the country cannot abandon her rich gas resources to please crusaders of energy transition.
Speaking at the 2022 Oloibiri Lecture Series and Energy Forum (OLEF) themed: Global Energy Transition: Implications on Future Investments in the Nigerian Oil and Gas Industry, organised by the Society of Petroleum Engineers (SPE), Sylva noted that the only viable option currently on the table for Nigeria is oil and natural gas, combined with the right technology to make them cleaner and more efficient.
He said: “Nigeria’s goal should be energy sufficiency in order to ensure energy security, and end the ravaging energy poverty in the country.
“This is required to drive our economic growth, and end the prevailing economic poverty. Nigeria needs affordable, reliable and sustainable energy resources to eradicate the prevalent energy poverty in the shortest time possible, and propel economic growth.”
Sylva explained that countries like Nigeria, which is rich in natural resources but still energy poor, must not follow energy transition plans at the expense of affordable and reliable energy for people, cities, and industries.
“The risk of limited international financing could jeopardise Nigeria’s energy transition and roadmap to attaining net-zero. We have seen policies and pronouncements at governmental and corporate levels aimed at discouraging investment in fossil fuels. We have seen decisions by some IOCs to reduce or out- rightly stop long-term investments in upstream projects and development of new technologies for exploration, production and processing of crude oil, or servicing the existing technologies.
“Penalties may soon be put on the production and use of fossil fuels, directly or indirectly, in order to bridge the gaps that may be created by large taxes raked by developed countries from the consumption of oil,” Sylva said.
The minister stated that adequate financial resources, technology development and effective policies designed to encourage investments in the oil and gas industry in Nigeria, were required to enable the country to meet increasing demand for energy.
Also speaking at the event, the Executive Secretary, Petroleum Technology Development Fund (PTDF), Dr Bello Gusau noted that future investments in the Nigerian oil and gas industry may decline due to the global push for clean energy.
“Today, Nigeria’s Petroleum Industry contributes approximately 80 percent of the Federal Government’s revenue and 90 percent of Nigeria’s export earnings therefore, it has become very important that we start thinking of alternative sources of energy outside fossil- based system of energy production and consumption (including oil, natural gas and coal) and pay more attention to renewable energy sources like wind and solar, as well as lithium-ion batteries.
“The Energy and Petroleum Industry today is in dire need of technology and skills to increase its viability and profitability. Furthermore, the industry is struggling to recover from the negative effects of Covid-19 pandemic and amid this slow recovery, it is faced with hikes in oil prices as a result of the current war between Russia and Ukraine. Ordinarily, the sharp rise in crude oil prices from less than 60 Dollar per barrel last month to as high as 120 Dollars per barrel today is what should benefit the country, but the poor state of Nigerian refineries makes it very difficult to maximize gains as in the case of other oil producing nations around the world.
“It is worthy to note that PTDF’s breakthrough research on Zeolite (refining catalyst) development from Kaolin sources is a deliberate and strategic approach to providing solutions to specific industry challenges. Relevant stakeholders are invited to partner with the Fund in the development of a pilot plant for the said Zeolite production”, he said.
On his part, the Executive Secretary, Nigerian Content Development and Monitoring Board, Simbi Wabote also expressed concerns over divestment in the sector.
He noted that energy transition may not be new as it has always taken its natural pace, adding that the unexpected Russia/Ukraine war has underscored the insecurities in Energy supply disruption
According to him, there is a need to strike a balance between the drive for renewables and stoppage of new investments in fossil fuels, stating that the disruptions present a unique opportunity for the Nigeria oil and gas industry to attract investment.