How Nigeria’s oil & gas sector can navigate energy transition

In a friendly and educative discussion, experts have recommended proactive steps Nigeria can prioritise in order to sustainably manage pressure from the energy transition.

This was disclosed by speakers and panellists during the second edition of the EY West Africa Energy Sector monthly technical webcast series themed: “Climate Change and its Implications for the Nigerian Energy Industry”.

Speaking during the event, Ademola Ogunbanjo, executive vice president, of Oando Clean Energy Limited, said the oil and gas industry is playing an important role in the energy transition by providing the affordable and reliable energy needed to fuel fair growth and improved living conditions for all, producing this energy with decreasing emissions to support a net-zero world.

“We must first understand that oil and gas are not enemies; the enemy is the fact that we have been unable to use crude responsibly, by capturing the effluence that comes from burning fossil fuels,” he said.

Ogunbanjo explained the importance of investment in technology in Nigeria’s voyage to energy transition,

“We need technology with regard to carbon capture,” Ogunbanjo added.

According to Ogunbanjo, “gas is the transition energy, for now, however, the future of gas is hydrogen. Low carbon gas is the future of gas, but for now, we can transition to gas for base load purposes”.

In order to commercialise and maximise its Liquefied Petroleum Gas (LPG) or Compressed Natural Gas (CNG) opportunities, Ogunbanjo advised Nigeria’s economic managers to pay attention to gas infrastructure.

Read also: TotalEnergies receives $748 million in dividends from Russia

Chioma Nwachukwu, director of external affairs and sustainability at Seplat Energy advised oil companies to focus on how technology can aid and improve their operations in the short and long term.

“If we do not move, we will stagnate. When we talk about global warming, the company will be called up and may die,” she said.

Concerning Nigeria’s clean energy journey, she said the government should create an enabling environment to attract investment for projects.

“We need to position ourselves to tap into opportunities that will bring in investment, that is required for energy transition,” she said. “We need to build skills, competencies, new technologies, carbon tax, new paradigm shifts for the energy transition.”

For Duane Newman, a Partner at EY, Cova carbon credit is essential to net-zero corporate strategies, for the effective energy transition.

“Carbon markets are essential to achieving net zero and assisting clients in developing a robust decarbonisation strategy, especially in the energy sector,” Duane said.

According to the Africa Energy outlook 2022, Africa accounts for less than three percent of the world’s energy-related carbon dioxide (CO2) emissions to date and has the lowest emissions per capita of any region.

In addition, there are still over 580 million people on the continent without reliable energy, and the electricity demand is expected to continue to increase as populations rise, industrialization ambitions grow, and urbanization continues to fuel the need for more electricity.

Furthermore, Nigeria, Africa’s largest economy is endowed with huge oil, gas, hydro, wind, and solar resources, but constraints in the power sector impact growth and industrialization.

According to its energy transition plan, Nigeria aims to achieve net zero by 2060. The country works towards scaling up energy access for development, attracting investment, and expanding the energy mix to include more renewables.