Unlike Nigeria paying lip services to renewable energy shift, Saudi Arabia is planning to save at least $200 billion over the next decade by replacing liquid fuel used for domestic consumption with gas and renewable energy sources.
OPEC’S largest oil producer and world’s largest exporter of crude is on a desperate quest to reduce its dependence on oil revenues by diversifying its economy away from the flagship export stock.
“One initiative we’re about to finalise is the displacement of liquids,”saudi Arabia’s Finance Minister Mohammed al-jadaan told Reuters. “This programme would represent savings for the government of about 800 billion riyals ($213.34 billion) over the next 10 years which can be utilized for investment.”
Earlier this year, Crown Prince Mohammed, who appears to be the de facto ruler of Saudi Arabia, announced another diversification program which would “unlock new local investments valued at SAR 5 Trillion through the end of 2030.”
This amount is equal to roughly $1.3 trillion, and its unlocking will be enabled by investments from Saudi Arabia’s largest private companies, the Kingdom’s Public Investment Fund, and a National Investment Strategy, for which the details have yet to be released.
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According to Bloomberg, the total investment poured into Saudi Arabia’s private sector will amount to some $3.20 trillion (12 trillion riyals).
The Vision 2030 diversification plan that Mohammed launched a few years ago is also very much alive, according to Al-jadaan. The minister said the Kingdom will be prioritizing fiscal discipline until all the targets of the Vision 2030 plan were achieved.
“Between now and 2025, and possibly until 2030, fiscal sustainability is a priority for us. We believe that until we achieve all the targets that Vision 2030 has set, we need to maintain fiscal sustainability and control government expenditure,” Al-jadaan said.
Globally, most oil-producing countries are resigning themselves to the uncomfortable fact that a significant amount of their oil and gas reserves will end up totally worthless.
This message appears lost on Nigeria’s political elite as the country’s most important energy bill currently being debated by the National Assembly is not equipped for the monumental changes facing the sector.
Despite decades of sluggish progress, the revised Petroleum Industry Bill (PIB) like the ones that have preceded it ignores an open secret concerning how the world is undergoing an energy transition from fossil fuels to a system based on renewable energy sources.
For instance, while other countries are consciously planning for life beyond fossil fuels, Nigeria’s PIB is obsessed with applying 10 percent of revenue from acreage rents to subsidise petroleum exploration in frontier basins for reserves that may not be worth much after 2030, a development some experts say is elevating sectional political agendas over compelling commercial and climate change priorities.
