• Thursday, April 18, 2024
businessday logo

BusinessDay

‘Stable energy supply is crucial for driving economic growth, attracting investments’

‘Stable energy supply is crucial for driving economic growth, attracting investments’

Salahuddeen Tahir is chairman of the Society of Petroleum Engineers (SPE), Nigerian Council. He doubles as head of Assets & Investments Management at NNPC Gas & Power Investment Services, where he oversees strategic investments in power, LNG, and gas-based industry initiatives. With dual degrees in Geology and Petroleum Engineering, Tahir brings over 22 years of experience in the oil and gas sector. He discusses in this interview the forthcoming 2024 annual Oloibiri Lecture and Energy Forum (OLEF) series, shedding light on pertinent issues shaping the energy sector. Amaka Anagor-Ewuzie brings the Excerpts:

How would you assess the state of stability in Nigeria’s energy sector, particularly concerning infrastructure, transportation, and security?

The state of stability in Nigeria’s energy sector presents a mixed picture. On one hand, there’s notable effort and progress in expanding the energy infrastructure, particularly in power generation. However, the sector continues to grapple with significant challenges in transmission and distribution. The transportation of energy resources is hindered by inadequate infrastructure, compounded by security concerns like theft and vandalism of oil and gas pipelines. Security issues are a major factor, affecting both the physical infrastructure and overall operations.

Despite these challenges, there are signs of improvement. However, the sector still requires considerable effort to achieve long-term stability and sustainability. The 2024 OLEF presents us with an opportunity to address these issues head-on. It will discuss these critical challenges and explore opportunities. The aim is to steer the sector toward sustainable practices, crucial for its future growth and stability.

What is the long-term impact of achieving stability in Nigeria’s energy sector?

Achieving stability in Nigeria’s energy sector holds transformative potential across economic, social, and environmental dimensions.

A stable energy supply is crucial for driving economic growth, attracting foreign investment, and fostering job creation, particularly in manufacturing and technology. It has the potential to revolutionise healthcare, education, and communication, enhancing the quality of life for all citizens.

It would also mean a shift towards environmental sustainability. Ultimately, stability in the energy sector stands to catalyse Nigeria’s progress towards a more prosperous, equitable, and sustainable future.

How can a balanced and sustainable energy mix from Nigeria’s diverse energy sources contribute to stability in the sector?

Achieving stability in Nigeria’s energy sector requires a balanced and sustainable mix of energy sources. Diversifying beyond oil and gas to include renewables like solar and wind enhances energy security and reduces environmental impact. This approach stimulates economic growth, especially in rural areas, by creating jobs and improving access to electricity.

Investing in renewables and energy efficiency offers long-term economic benefits, reducing fuel imports and infrastructure costs while promoting a healthier environment. Overall, a diversified energy mix is crucial for stability, sustainability, and socio-economic development, laying the groundwork for a resilient and future-oriented energy sector in Nigeria.

How can community engagement be integrated into strategies for stable energy sector development in Nigeria?

Community engagement and stakeholder participation are vital for Nigeria’s energy sector stability. Regular consultative forums bring together diverse groups to share viewpoints and co-create solutions. Capacity building educates communities, empowering them for active participation. Partnerships across sectors address challenges, while local content policies foster economic opportunities. Involving communities and stakeholders in policy and project stages ensures inclusivity, stability, and sustainability in Nigeria’s energy sector.

What role do you see technology playing in improving infrastructure, transportation, and security within Nigeria’s energy sector, and how can it be effectively implemented?

I see technology as a key driver in transforming infrastructure, transportation, and security within Nigeria’s energy sector. Particularly in the realms of oil and gas, our approach to implementing this technology has been both strategic and coordinated.

In the realm of infrastructure, the integration of renewable energy sources, such as solar power is increasingly important, even within the oil and gas sector.

IoT sensors and data analytics optimise infrastructure maintenance and minimise downtime. Digital platforms enhance energy management and customer interactions, promoting efficiency. Improved pipeline monitoring enhances transportation efficiency and environmental conservation. Advanced surveillance systems bolster security against threats. Collaborative public-private partnerships facilitate effective technology deployment, while training ensures workforce readiness. A robust regulatory framework ensures consistency, and community engagement tailors solutions to sector needs.

If we continue to remain at the forefront of technological developments, we can ensure that Nigeria’s energy sector remains efficient, secure, and sustainable.

How does the divestment by IOCs impact Nigeria’s oil and gas industry?

The divestment by International Oil Companies (IOCs) in Nigeria’s oil and gas industry has multifaceted impacts on the country’s economy, energy security, and the industry as a whole. On the one hand, divestment may lead to a decrease in foreign direct investment and technological expertise, potentially impacting production levels and revenue generation. This could also affect employment opportunities and local content development within the industry.

Moreover, the divestment may pose challenges to Nigeria’s energy security, as it could reduce the involvement of IOCs in exploration and production activities, potentially leading to a decline in reserves replacement and production capacity.

Also, the divestment could trigger shifts in the ownership and operation of oil and gas assets, impacting the competitive landscape and government revenues derived from the sector. The divestment phenomenon is not unheard of. This happened in the North Sea region giving rise to virile small and midsized oil and gas companies. Some of these companies are currently competing at a considerable scale. As such, with the right policy and regulatory interventions, the situation is not a doomsday scenario for the industry.

What challenges does Nigeria face in attracting new investment to offset the divestment by the IOCs?

Nigeria faces hurdles in attracting new investment to offset divestment by IOCs in its oil and gas industry. Addressing environmental, social, and governance issues while enhancing transparency would boost confidence. Infrastructure deficiencies hinder operations and investment attractiveness. Security concerns, especially in oil-producing regions, must be addressed to reassure investors. Promoting diversification and sustainability, including incentivising renewable energy investments and broadening the appeal.

Overall, concerted efforts from government, industry stakeholders, and finance sectors are needed to create an enabling environment for sustainable energy sector development and investment in Nigeria.

Tell us the significance of the Oloibiri Lecture and Energy Forum and its impact on Nigeria’s energy industry.

The Oloibiri Lecture and Energy Forum series plays a crucial role in shaping Nigeria’s energy industry. Originating from the historic oil-producing town of Oloibiri, it serves as a platform to discuss critical issues and trends in the energy sector. By bringing together industry experts, policymakers, and stakeholders, it will highlight key challenges and opportunities facing the industry. Through thought-provoking presentations and discussions, the lecture aims to encourage innovation, collaboration, and sustainable practices within the sector.

The impact can be seen in its contributions to policy formulation, technology development, and capacity-building initiatives in Nigeria’s energy industry. Ultimately, this annual event has been catalysing positive change and growth in the sector.

How does this contribute to knowledge sharing, collaboration, and innovation in Nigeria’s petroleum industry?

OLEF is an initiative that fosters knowledge sharing, collaboration, and innovation in the industry. First, it commemorates the nation’s oil discovery in 1956, offering historical context and insights into industry evolution. Second, it promotes interdisciplinary exchanges, encouraging holistic solutions to energy challenges. Third, OLEF showcases thought leadership, inspiring stakeholders with innovative ideas and trends. Finally, it facilitates networking among industry peers, policymakers, and academia, fostering collaboration and expertise exchange. Ultimately, OLEF drives progress by honouring the past, embracing diverse perspectives, and fostering a collaborative environment for future growth in the petroleum industry.

Nigeria’s suitability for hosting the African Energy Bank headquarters stems from several factors. As Africa’s largest population, the nation presents a significant energy demand and market potential. Abundant energy resources, including oil, gas, solar, and hydroelectric power, bolster its candidacy.

Geographically, Nigeria’s position in West Africa offers logistical advantages for the bank’s operations. The country’s well-established financial sector and regulatory framework could facilitate the bank’s activities. No doubt, Nigeria’s commitment to regional integration aligns with the bank’s objectives, enhancing its appeal as a headquarters location.

Overall, Nigeria’s demographic, resource wealth, location, and institutional framework make it a strong contender and a compelling choice for hosting the African Energy Bank.

How does Nigeria’s existing energy infrastructure and resources compare to those of the other competing countries?

In comparison, Nigeria’s existing energy infrastructure and resources are relatively robust and diversified. Nigeria is the largest oil producer in Africa and ranks among the top natural gas reserves holders globally. The country has a well-developed oil and gas industry, with infrastructure including pipelines, refineries, and export terminals. Nigeria has been making efforts to diversify its energy mix, with investments in renewable energy projects such as solar and hydroelectric power. While challenges such as infrastructure maintenance, security concerns, and regulatory issues persist, Nigeria’s energy sector still presents significant opportunities for growth and investment compared to many other African countries.

What are the key factors that make Nigeria a strong contender to host the headquarters of the African Energy Bank?