• Thursday, March 28, 2024
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Nigeria clings to fossil fuels, favours slower energy transition

Nigeria rejects single path to energy transition

Nigeria has clung to making the most of its fossil fuels as the world races towards a low-carbon future and renewable energy resources take the centre stage.

Timipre Sylva, Nigeria’s minister of state for Petroleum Resources has said that the global energy transition would not happen overnight and that Africa’s most populous country has to optimise the use of available petroleum resources to energise its energy-poor economy.

This is contrary to what advanced economies are doing, switching to electric vehicles and renewable energy.

Speaking at the ongoing Nigeria International Petroleum Summit (NIPS), an event organised by the Federal Government of Nigeria and aimed at charting the way forward in the post-Covid-19 pandemic era, Sylvia agreed that energy transition will make the world a cleaner, healthier place but he disagrees that this transition will happen anytime soon.

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“Hydrocarbons have provided a majority of the world’s energy for centuries, and that path is not going to change all of a sudden,” Sylvia said at the event with the theme ‘From crisis to opportunities: New approaches to the future of hydrocarbons.’

“I am yet to see that disruptive technology with enough flexibility, affordability, and applicability to replace oil and gas,” the minister of state said.

Despite global warning, Nigeria has over time remained stuck in the oil era. The country relies on crude oil sales for around 90 percent of its foreign exchange earnings and more than half of government revenue.

Big oil companies have lately come under a plethora of attacks from all directions, ranging from uncooperative financiers and investors amidst a global shift to renewable energy to hostile governments and hardline climate activists.

Some of the world’s major funds are divesting from fossil fuels.

The New York State’s pension fund, one of the world’s largest investors with $226billion in assets said it will drop many of its fossil fuel stocks in the next five years and sell its shares in other companies that contribute to global warming by 2040.

Realising that energy transition presents an existential threat, oil companies and oil-producing countries are preparing for life after oil.

Saudi Arabia is investing $30 billion in the renewable energy sector by 2025 in order to diversify the energy mix.

Norway with a $1 trillion sovereign wealth fund, is funnelling money into clean energy projects.

For Sylva, post-covid-19, Nigeria’s energy sector requires new forms of collaboration to survive.

“I know that collaboration has been impossible in the oil and gas industry for years. But the industry has equally paid lip service to it,” Sylvia said.

The minister of state noted that there is no better strategy for success especially for Nigeria’s new set of marginal field winners.