Oil will continue to be relevant, says FG
By Rex Enabulele, Abuja
In spite of the global push for the stoppage of the exploration of fossil fuels, crude oil will continue to be relevant, the Federal Government affirmed yesterday.
It stated this on Day 3 of the Nigeria International Energy Summit (NIES). With the theme, “Revitalising the Industry: Future Fuels and Energy Transition,” the Minister of State, Petroleum, Timpre Silva, noted that stakeholders must begin to drive a new narrative, using gas as a transition fuel.
He said that the oil and gas industry will face more scrutiny in their operations and business models in the coming days, noting that operators will have to explain more often the impact of their activities on the environment.
The minister explained further that their contributions to reducing greenhouse gas emissions and their efforts towards achieving net-zero carbon emissions, will be questioned more often.
“While we pursue the country’s energy transition agenda, let us also recognise that fossil fuels will continue to play a critical role in our energy and economic systems.
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“While the role may appear to be in contradiction with the energy transition agenda, fossil fuels will still remain important and will remain integral part of the vision in our energy transition journey,” he stated.
Sylva stated that the federal ministry of petroleum resources, in discharge of its mandate, will continue to be an enabler to make a seamless energy transition in Nigeria happen.
He added that the federal government will continue to provide an enabling environment to improve the oil and gas value chain, driven by modern technology, industry, best practices, stakeholders’ engagement and innovations in alternative energy.
He urged stakeholders to come up with an accelerated energy transition strategy for the country, look at the critical factors that can make them happen and whether the factors relate to the government, society, policy makers, technology, investors or the industry itself.
Quoting Dr Fatih Birol, who is the Executive Director of International Energy Agency, (IEA) Sylva noted that “No energy company will be unaffected by this energy transition”, adding that ” Every part of the industry needs to consider how to respond since doing nothing is simply not an option.”
In his part, the Group Managing Director, Nigerian National Petroleum Company (NNPC) Limited, Mallam Mele Kyari, stated that Nigeria must take advantage of the resources of today and then work towards the transition target of 2060.
Kyari noted that the NNPC and partners were working to increase domestic crude oil production, he added that in conjunction with the country’s security agencies, the unfavourable security situation was being sorted out.
He maintained that while energy transition remains real, the company was looking at how it can increase the resources of today by getting more investment and promote gas development.
Kyari maintained that the NNPC has a programme to take out the current flare levels, noting that flaring of gas was going on in very many locations that they shouldn’t, ” because we don’t know what to do”.
“Today, we are pulling resources together to take out these flares. At the second level, any company which pegs flaring as part of its development plan, will be disallowed. This is very practical,” he noted.
According to the GMD, with the AKK project, the NNPC will deliver gas throughout the nation of about 8 to 10 billion scf, admitting however that there are still pricing issues, which will be taken care by the Petroleum Industry Act (PIA).
In his comments, a former Minister of Petroleum Resources and ExxonMobil Executive, Dr Ibe Kachikwu, stated that Nigeria must take full advantage of its fossil fuel resources while they last.
Stating that the country does not have up to 30 to 40 years to do that, he explained that Nigeria has a limited time to take advantage of its resources, explaining that it is important to fast-track oil production and value addition.
He pointed out that Nigeria needs to work very fast to rehabilitate the refineries and then take the issue of gas production seriously, but mentioned that the issues of funding, tax regime , among others, have to be sorted out.
He said that since developing gas has become more important than developing crude, Nigeria needs to pay attention to the transition product, gas , adding that in 10 to 15 years, the developed world will move away from gas.
According to him, while sale of assets is a fantastic opportunity, Nigeria still needs the funding for major projects, adding however that the country must not forget to celebrate the milestones it had made in the last couple of years.
He noted that while opening up the oil sector is important, a situation where one person has 10 to 15 blocks and refuse to develop them, while holding just a certificate of occupancy, must be reviewed.
Managing Director of Chevron, Nigeria, Rick Kennedy, in his intervention, stated that the country is endowed with everything to succeed in the energy industry, including a young population of talented people.
According to him, Chevron is an active participant in building a future dominated by low carbons, he noted that the company was committed to being a leader in low carbon space as a commercially viable business by investing in carbon capture and renewables technology.
The Managing Director, Nigeria NLNG, Philip Mshelbila, in his remarks, explained that the company has reduced gas flaring from more than 65 per cent to currently less than 20 per cent due to its decarbonisation programme.
In the last couple of years, Mshelbila stated that the company had generated $116 billion as revenue , paid $6.5 billion in taxes, paid over 16 billion in share holders earnings and contributed excess of $13 billion to the federal government in feed gas stock.
He noted that from 50,000 tons , the company had increased its gas footprint to 400,000 tons and now has approval to move towards 500,000 tons.
