• Friday, March 29, 2024
businessday logo

BusinessDay

Saudi Arabia makes big shift from oil as Nigeria still sleeping

Saudi Arabia-oil

Saudi Arabia has taken its latest step towards declaring its ambitions to move away from oil after the world’s largest oil exporter announced it is no longer an oil-producing country, a reality that Africa’s biggest oil-producing country is yet to come to terms with.

At a time oil majors from Exxon Mobil to Chevron and Shell are busy doing climate activists’ bidding in the boardroom while some state-owned oil corporations are all too eager to take advantage of higher oil prices, Saudi Arabia is turning its back on crude oil and embracing more of the solar gospel.

“Saudi Arabia is no longer an oil country, it’s an energy-producing country,” Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman told S&P Global Platts this week.

He added, “I urge the world to accept this as a reality. We are going to be winners of high green ambitions that include gas production, renewables, and hydrogen.”

Saudi Arabia is implementing Vision 2030, which aims at transforming society, diversifying the economy, creating jobs and increasing the level of ambition throughout.

The OPEC kingpin is also planning to generate 50percent of its energy from renewables by 2030, in part to reduce its dependence on oil. In 2017, renewables made up just 0.02percent of the overall energy share in Saudi Arabia.

In the UAE, efforts are taking place at the Emirate level, notably in Abu Dhabi and Dubai, which both have 2030 strategies that aim to strengthen high-end manufacturing (e.g., in medical equipment and aerospace). The objectives are ambitious — Abu Dhabi aims to grow the non-oil sector by more than 7.5percent annually.

The above development not only puts Nigeria, Africa’s largest economy, in a precarious situation but also exposes how the world is gradually turning away from crude oil to gas to drive their economies.

One way or another, most experts say Nigeria must face up to a future without oil which the country can choose through a voluntary transition from a petro-state to a more balanced and productive economy, or through dragging, kicking and screaming, into the post-oil age.

Nigeria is Africa’s largest oil producer, but its oil wealth has been a curse. Rife, corruption and environmental damage have plagued Nigeria’s oil history for decades.