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FG: Oil Will Continue to Be Relevant Despite Conversations around Energy Transition

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The federal government yesterday stated that despite global push for the stoppage of the exploration of fossil fuels, crude oil would continue to be relevant in the coming years.

 

Speaking on the third day of the Nigeria International Energy Summit (NIES) tagged: “Revitalising the Industry: Future Fuels and Energy Transition,” the Minister of State, Petroleum said industry stakeholders must begin to drive a new narrative, using gas as a transition fuel.

 

Stating that the oil and gas industry would face more scrutiny in their operations and business models in the coming days, Sylva noted that operators would have to explain more often the impact of their activities on the environment.

 

 

In addition, he stated that their contributions to reducing greenhouse gas emissions and their efforts towards achieving net-zero carbon emissions, would 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.

 

“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 explained.

 

 

Sylva stated that the federal ministry of petroleum resources, in discharge of its mandate, would continue to be an enabler to make a seamless energy transition in Nigeria happen.

 

He added that the federal government would 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 could 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.’’

 

The Group Managing Director, Nigerian National Petroleum Company (NNPC) Limited, Mallam Mele Kyari, while speaking, stated that Nigeria must take advantage of today’s resources and then work towards the energy transition target of 2060.

 

 

Stressing 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 remained 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 would deliver gas throughout the nation of about eight to 10 billion scf, admitting however that there were still pricing issues, which would 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.

 

While 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.

 

He further said it was important to fast-track oil production and value addition.

 

He pointed out that Nigeria needed 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.

 

According to him, 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 needed 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 was 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.

 

Also, 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 de-carbonisation programme.

Culled from THISDAY

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