Sopuruchi Onwuka

Government must reconstruct Nigeria’s energy transition policy for optimum market returns from the country’s existing reserves of petroleum liquids ahead of the presaged energy demand switch from fossil sources by 2040.

And any policy modification must come with regulatory provisions that would enhance the fiscal regimes and operating terms that must be attractive enough to annual $25 billion new investments in intensive exploration, development and production of hydrocarbon liquids.

The Oracle Today reports that annual $25 billion investment would amount to significant $425 billion by 2040 when the local petroleum industry is expected to be led by gas production in line with the global energy transition timelines.

The new industry proposition formed the key output from the 2023 Annual International Strategic Conference of the Association of Energy Correspondent of Nigeria (NAEC) which held in Lagos at the weekend.

Panellists in the industry leadership session comprised the Chairman of AA Holding Limited, Mr Austin Avuru; President of the Nigerian Gas Association (NGA), Mr Akachi Nwokedi; President of Women in Energy Network, Mrs Funmi Ogbue; Managing Director of Falcon Corporation Limited, Mrs Audrey Joe-Ezigbo; the CEO Heritage Energy Operational Services Limited (HEOSL), Ado Oseragbaje; and the Professorial Chair in Oil and Gas Economics and Management at the Institute for Oil and Gas Studies, University of Cape Coast, Ghana, Omowumi O. Iledare.

Mrs Ogbue’s role as lead discussant in the debate was delivered on her behalf by the Deputy General Manager at First Hydrocarbon & Petroleum Development Company, Anita Edo-Osagie.

The panellists jointly expressed serious concerns about the waning investments and falling activity level in the Nigeria petroleum industry where, they also observed, annual investments have plummeted from some $20 billion to about $5 billion.

The result, they said, is that the prime national economic aspirations in the industry now lag behind targets and timelines, leading to mass exit if service companies and their oilfield equipments.

Mr Oseragbaje, who was represented by the General Manager in charge of Government and External Relations at the company, Mr Sola Adebawo, pointed at some of the incentives provided in the Petroleum Industry Act (PIA) as baits to new investments.

He also argued that the country’s 208.83 trillion cubic feet of gas reserves at a time of energy transition should hold great attraction for new investments.

“This gas, with the right investors, would help Nigeria through the clean energy transition and enable her meet her developmental needs,” he said.

He called on government to address some pressing problems in the industry to enable huge investments to materialize.

President of the Nigerian Gas Association, Mr Akachi Nwokedi, agreed that the PIA enhanced the fiscal incentives for investments. He however pointed at gaps in the new law which, according to him, have made it difficult for investors to take decisions on development of new assets in the deepwater.

Mrs Joe-Ezigbo declared at the panel that Nigeria must commit to stable policies, foster innovation, and engage in collaborative efforts at home and abroad in order to enhance investment opportunities and address challenges in the energy sector.

She called for determination, vision and collective action for the country to achieve energy security and secure the future of her citizens.

“Let us remember that Nigeria’s energy transition is not just about powering our homes and industries; it is about powering our dreams and aspirations for a brighter, cleaner, and more prosperous future for all Nigerians,” she advised.

Mrs Joe-Ezigbo noted that harnessing Nigeria’s abundant energy sources presents enormous opportunities for sustainable energy production for her population of phenomenal people that brim with productive capacity.

He stated that policy choices must be limited to issues “around are, for us; ultimately conversations about our people, our youth in particular, and of our ability to present to them the opportunity and enabling environment to give their best to the nation, the continent, and the world at large.”

In bringing decades of operating experience and policy exposure to bear in the debate, Mr Avuru dropped global projections that showed drifting demand from petroleum liquids to natural gas. He told the conference delegates that gas would displace oil and primary industry commodity by 2040 when industrialized nations in Europe and North America plan to dump internal combustion automobiles for electric vehicles.

By the same time, natural gas would also displace coal, diesel and other fuel oils as industrial and maritime fuel. The situation, he pointed out, would leave most un-monetized petroleum liquids stranded and unable to attract development and production investments due transiting energy choices.

For Nigeria to derive the best economic value from the available hydrocarbon liquids reserves, he said, the country’s energy transition plan must be restructured to immediately reverse the prevailing decline in annual investments in field development and production.

He noted that annual investment in the Nigerian upstream petroleum industry has plummeted to just $5.0 billion. The figure, he said, mirrors falling oilfield work programmes, fleeing service providers and their equipments, and ultimate decline in production.

The Oracle Today reports Nigerian Content Development and Monitoring Board (NCDMB) as putting the country’s traditional upstream industry investment take at annual $20 billion.

To recover and accelerate production to meet the pace of energy transition, Mr Avuru declared that the upstream petroleum industry would require annual investment of $25 billion till 2040; or cumulative $425 billion in the next 17 years to the time.

The investments, he pointed out, would not only grow the country’s oil production to about 3.0 million barrels per day (3.0 mbd), but also deliver adequate gas to also diversify domestic energy choices, fire manufacturing and boost electricity production.