Seplat transitions to Seplat energy
…to provide solution to Africa’s energy challenge
Nigeria’s foremost indigenous oil and gas company, Seplat, has stated its readiness to champion the quest to improve Africa’s energy access by repurposing its operations with a focus on cleaner energy.
This came from the decision to make sure that Seplat is committed to carbon neutrality upon the realization that something must be done by everyone concerning decarbonization.
This, as Nigeria’s government, said, to achieve its energy transition plan – universal access to energy by 2030; zero carbon emission by 2050; and industrialization to alleviate poverty and drive economic growth; – it will partner with Seplat Energy.
Nigeria’s Vice President Yemi Osinbajo, at the 2nd Seplat Energy Summit, held at the Transcorp Hilton, Abuja, where the company transitioned from an oil & gas company to an energy company with renewables and cleaner energy the priority, said the transition is laudable as the company has put the right leg forward and the company, with others, will assist the country to meet its net-zero emissions plans by 2050 through the COP26 Energy Transition Council process.
Represented by the minister of state for environment, Sharon Ikeazor, Osinbajo said Nigeria’s energy transition cannot be limited to incremental steps but transformational steps.
“Nigeria needs a broader set of policies that must align with energy security, which must foster a smooth energy transition across various levels of energy demands, and gas will continue to play a critical role in Nigeria’s energy transition which will create lots of opportunities in Nigeria’s energy value chain.
“Over the next decade, every energy segment in Nigeria will be affected by this shift in energy supply and demands’’, he stated.
Seplat Energy Plc chairman, Ambrose Orjiako said to achieve the cleaner energy provision goal, they plan, with associates, to replace all of the wood people use in homes with the use of Liquified Petroleum Gas (LPG) which is cleaner energy.
The transitioning to an energy company aligns with global trends in energy transition where there is proactive planning for a world where fossil fuels will start to decline in the global energy mix and aligns with the company’s renewed focus on the entire energy value chain with an emphasis on cleaner and more sustainable forms of energy to power Nigeria.
Orjiako said the company believes that gas is the transition fuel, and ‘’Seplat today delivers 50 percent of gas needs in the country. We are very aligned with the Federal Government’s initiative in this regard and we can only see this increasing. Replacing diesel generators with cleaner renewable energy will solve Nigeria’s power deficit’’, he asserted
He stated that one of the ways the company is focused on making sure the environment is well protected, aside from launching its ‘Tree for Life’ project to plant trees that would create jobs and improve the environment from the first quarter of 2022, is its determined commitment towards ending gas flaring in all of its operations by 2024, six years ahead of government targets.
Nigeria’s minister of state petroleum resources, Timipre Sylva said the ministry endorsed Seplat Energy as the flagship company to drive Nigeria’s energy transition, while he calls for multiple pathways to energy transition to ensure that no country is left in the process of achieving net-zero emission by 2050.
Sylva noted that it’s important to ensure massive efforts towards increasing energy efficiency and productivity by facilitating changes in consumption patterns and lifestyle choices which will expand renewable energy for power supply and directions within and across the country.
“We believe that renewable energy offers favourable prospects for localised entities, because of the complexities of technology transfer, and the intensity of the slow, and medium-scale for segments,” Sylva said.
One of the keynote speakers, Pulitzer prize-winning author, and energy commentator, Daniel Yergin, who spoke on the need for the global shift from fossil fuel to other energy forms, calls for more diversity in the energy mix to improve energy access. He said “the more diversity you have in your energy mix, the more energy security you have.”
Yergin took the audience on an enthralling ride on the base of his book, ‘’New Map -Energy, Climate Change and the Clash of Nations”, as well as enlightened them on the various issues of geopolitics and energy in the era of rising political turbulence fuelled by the call for transitioning and why some countries are skeptical to transition.
Damilola Ogunbiyi, CEO and special representative of the UN secretary-general for Sustainable Energy for All in her presentation on “Balancing Sustainability Revolution with Energy Poverty – Lessons from around the World”, said African countries must realise the opportunities inherent in transitioning to cleaner energy to improve energy access for the continent’s growth.
Group managing director of Nigerian National Petroleum Corporation (NNPC), Mele Kyari, said gas resources would help Nigeria to close the gap in the transition to clean energy.
The summit had in attendance ministers, governors, members of the National Assembly, royal fathers of Seplat Energy’s host communities, leaders of public and private institutions, investors, and heads of shareholders groups. Seplat leveraged the energy summit to unveil its new logo.
Roger Brown, Seplat Energy CEO said the name change reflects the company’s belief that the greatest opportunity ahead is to supply the right mix of energy for Nigeria’s young and rapidly growing population.
The summit examined how to tackle Africa’s electricity deficit against the background of the challenge of climate change and stakeholders at the summit say Nigeria, Africa’s largest economy, must play a crucial role in leading the continent’s energy transition as improving access to energy is essential to the country’s economic growth.
At the first panel session during the summit, Mike Sangster, the CEO of TotalEnergies Nigeria raised concern about the capital cost of renewable energy which he claimed is much higher than the capital cost of traditional energy although the recurrent cost of renewable energy is cheaper.
Sangster said, “Financing is one of the major issues that need to be addressed’’, as he noted that most of Nigeria’s renewable energy projects need power purchase agreements that are bankable. “Africa needs more energy which must be clean and net-zero fossils not zero fossils,” Sangster said.
Group managing director of Nigerian Exchange Group (NGX), Oscar Onyema, at the panel session, said the country needs $400 billion to power 25 million homes within 30 years through renewable energy, an aspect of attaining zero carbon emission by 2050, and this funding can happen through the capital market.
On access to funding, he said N750 billion was raised for investments in 2020 through bonds, and this year, it is estimated to reach N1 trillion, as he urged private firms to embrace green bonds, saying it is a global funding means towards capital for the energy transition period.
Miguel Azevedo, Citigroup’s head of investment banking for the Middle East and Africa said the gospel of renewable energy will force the development and creation of a democratised system for Nigeria’s energy sector. “It will allow for a change in the economic and business model of Nigeria’s energy sector,” Azevedo said.
The panel moderator, Arumna Oteh, a former vice president of the World Bank, and a non-executive director at Seplat, said energy transition was a challenge for everyone and enjoined all to key into Seplat’s drive for clean energy.
Oteh, also a former director-general of the Securities and Exchange Commission (SEC), said there were global funding means including a N40 trillion energy access fund globally for countries driving climate change to leverage on.
Also speaking at the panel, the executive secretary of Nigerian Content Development Management Board (NCDMB), Simbi Wabote said attaining zero carbon emissions by 2050 requires capital investment, commitment, and capacity building.
However, to attain this in 30 years, Wabote said it would mean that 90 percent of Nigeria’s electricity would have to come from renewable energy sources. He noted that for oil to dominate coal for power generation, it took about 160 years in the past, adding that to attain a shift from oil to renewables in the next 30 years is a huge task.
Investors are also buying into the prospects of the company as evidenced in the continued increase in the shares of the company with about 80 percent positive return this year and this could rise as Nigeria’s transition priorities present significant opportunities for Seplat Energy to leverage.
These prospects range from the development of gas-to-power initiatives, development of LPG markets to alleviate the use of biomass, and development of renewable energy to serve large areas of the country not currently served by the national grid.