Nigeria’s debilitating energy shortages encumbering its development aspirations may soon be a thing of the past if a $10billion infrastructure investment by the Nigerian National Petroleum Corporation fully hits the right cord.
Having seen its revenue from oil decline amid a drop in production, on the back of weaker global oil prices, the Nigerian government is trying to raise its game in terms of competitiveness in its gas resources as well as oil.
Just as industry experts have argued that Nigeria has more gas deposits than crude oil, a move for gas industrialisation would have far linkage effects on power supply, industrialisation, infrastructure and job creation.
For most experts, the multiplier effect of a national gas revolution would greatly impact the various sectors of the Nigerian economy to create jobs needed to pull millions of the citizens out of poverty in line with President Muhammadu Buhari’s pledge to his countrymen.
Perhaps, the imperative of this thematic proposition may have influenced discussions on various subject matters by experts who recently spoke at the Atlantic Council Global Energy Forum 2021.
At the forum, both the Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC) Mohammed Barkindo and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) Mele Kyari, favoured the choice of more investments in the gas sub-sector of the economy, without also neglecting the current opportunities in the black gold.
Kyari, who spoke on the second day of the Atlantic Council Global Energy Forum, 2021 on the topic “Delivering Energy Access in the Developing World,” noted that although the country aligns with the push for renewables, it is now focused on using its oil and gas resources in developing infrastructure till when the commodities become less relevant in about four decades.
“For instance, we are seeing investment in our energy infrastructure, especially in the area of gas in excess of $10 billion; this is ongoing. There are a number of gas-based projects about $3 billion to $5 billion dollars and some of them are at the Final Investment Decision (FID) stage,” Kyari said.
Projects that have often bolstered the NNPC boss’s confidence that country was headed in the right direction with gas industrialisation include the Federal Government’s plan to deepen domestic gas consumption, which had culminated in the advent of Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) with the objective to deploy resources in the right places.
Others are the Oil and Gas Dispute Resolution Centre (DRC), Oil and Gas Competence Development Centre (CDC) and the Integrated Data Mining and Analytics Centre (IDMAC).
The above initiatives are in addition to such ongoing projects as the AKK pipeline project, the NLNG Train-7 project, and the 5,000 barrels per day Waltersmith Modular refinery in Imo State
There have also been renewed focus on gas and condensates for revenue generation, with the country’s plants now producing between 250,000 to 350,000 barrels of condensates daily, as projects to rev up gas production were in the offing.
He said: “We are not a petroleum country in the real sense. It’s agreed that we have the 10th largest reserve of oil and a significant gas reserve. Of course, what everybody recognises is the oil. The reality today is that we have a country in excess of 200 million people. Seventy per cent of this population is well below 30, with a growing middle class and one of the fastest-growing economies in Africa.”
Nigeria has the ninth-largest proven natural gas reserves in the world with approximately 200 trillion cubic feet (tcf). Despite having the largest reserves in Africa, only about 25 percent of those reserves are currently being developed
Kyari said, “More importantly, for us today, an energy deficient country, over 60 per cent of our country is not electrified, the poverty level is very high, extremely challenging. But so much is going on to see how we can reverse this trend. When you combine all these, you will see that as a country of focus today, many things are happening in the energy sector.”
According to him, Nigeria as a country is currently in transition and not necessarily in energy transition, adding that the country is not oblivious to the changes in the global oil and gas sector.
He explained that Nigeria is at the moment witnessing increased domestic gas demand in the industrial and power sectors, leading to increased production and reduced gas flaring.
Kyari added that the country is also witnessing increasing household access to gas networks and natural gas in the main cities, while there are deliberate plans to expand that access to rural areas.
He said the federal government’s recent plan aimed at deepening domestic gas consumption, led to the advent of Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) and that it was part of the policy to deploy resources in the right places.
According to him, “The best of forecasts have said that in 30 years we will still have at least 100 million bpd of oil consumption.
“So, oil and gas will still remain relevant in the near future, but the transition is real. What countries and nations are doing is to move towards much cleaner fuel and this cleaner fuel is clearly gas and that’s why we as a company are focused on gas resources, making sure to supply the domestic market and create opportunities for export.
“So, what we see as an energy resource-based country is to utilise the available resources of today to create the enabling environment for growth and prosperity in the country and that clearly aligns with the reality on the ground.
On whether or not Nigeria can survive without oil, especially given the current crisis in the global oil market, Kyari explained that Nigeria is gradually moving away from its dependence on oil.”
“What does this mean for a country like ours which depends on oil for cash? Obviously, we have seen how we can transit to something better for our country, so we don’t depend on that today. You may be aware that today, the country’s resources are mostly coming from taxes and those taxes are growing because population and prosperity is growing and we want to get more work done.
“As a country, we are facing the new realities and we are moving towards the use of gas and also we are developing our resources as quickly as possible so that when the real transition comes in 30 to 40 years’ time, we will be in a position to say this is a developed country that has taken advantage of its resources,” he further stated.
On his part, OPEC’s Secretary general Mohammed Barkindo also a former GMD of the NNPC, while speaking on, ‘The Geopolitics of the Energy Transformation,’ maintained that though renewable sources of energy will continue to develop, oil and gas will remain very relevant, accounting for over 50 per cent of global energy mix by 2045.
That was why he averred that with the world’s population growing by 1.7 billion over the next two and a half decades and the world economy more than doubling, oil and gas will remain relevant.
The OPEC scribe argued that while the oil cartel was not opposed to the growth of renewable energy talks about oil and gas suddenly becoming useless was not founded on hard facts.
He said: “Although, there are some who believe the oil and gas industry should not be part of energy future and should therefore be consigned to the past, with renewables and electric vehicles more in the front burner, it is important to state clearly that science does not tell us this.
“The statistics relating to the blight of energy poverty do not tell us this either. The science and statistics tell us that we need to reduce emissions and use energy more efficiently.
“Renewables are coming of age, with wind and solar expanding quickly, but—even by 2045 in our WOO—they are only estimated to make up just over 20 percent of the global energy mix, while Oil and gas combined are forecast to still supply over 50 percent of the world’s energy needs by 2045, with oil at around 27 percent and gas at 25 percent.”
The OPEC helmsman concluded that the world will continue to need more energy in the decades ahead, in the near term as it recovers from the COVID-19 pandemic—and looking longer-term to 2045, in preparation to rid itself of the scourge of energy poverty.
