Campaign for Reduced Funding of Fossil Fuels Leading to Gale of Divestment by IOCs
Nigeria’s Minister of State for Petroleum Resources, Chief Timipre Sylva, has noted that the global campaign for reduced funding of fossil fuels exploration has led to a gale of divestment by International Oil Companies (IOCs) in Nigeria.
IOCs have continued to divest their onshore and shallow water assets in the country, to focus primarily on offshore exploration and production – a business strategy that has been attributed to be one of the reasons for Nigeria’s continuous drop in production of oil, which dropped 43 percent in just 26 months (March 2020 – May 2022).
Sylva stated this at the ongoing 45th Nigeria Annual International Conference and Exhibition (NAICE) organised by the Society of Petroleum Engineers (SPE) Nigeria Council, holding in Lagos with the theme: “Global Transition to Renewable and Sustainable Energy and the Future of Oil and Gas in Africa.”
The Minister said, “On a relevant note, the campaign for reduced funding of fossil fuels explorations has led to a gale of divestment by the international oil companies in Nigeria. I strongly believe that this is an opportunity for oil and gas exploration in the country because Nigeria’s independent producers have developed capacity to fill-in the gap.”
With the global population expected to increase exponentially between now and 2050 as well as anticipated economic growth, Sylva said that this means that the current energy mix will remain, adding that it also indicates that energy transition will remain a gradual process, as against a rapid and radical shift as some have presented it.
“We have seen coal plants being fired up in several European Countries recently, and a renewed interest in natural gas supply from Africa. There are also reports of increased oil and gas drilling operations in the USA with spontaneous permits being granted recently,” he stated.
“Anticipated economic growth and rising global population, especially in Asia and Africa, will significantly push energy demand upward to a level that renewable energy sources only cannot meet by 2050.
“All these imply that the global energy mix will remain with us, amidst greater dominance by hydrocarbon energy sources, at least in the foreseeable future. It also indicates that energy transition will remain a gradual process, as against a rapid and radical shift as some have presented it.”
About 600 million people in Africa have no access to electricity while 900 million have no access to clean cooking fuel. The Minister argued that Africa’s approach towards net-zero emission should be to harness its gas resource as a transition fuel alternative.
He, however, informed that Nigeria as the oil and gas industry leader in Africa is committed to pursuing energy transition to promote economic growth, with its gradual investment in renewable energies, particularly solar, to reduce carbon emissions.
“Africa’s energy poverty would have to be addressed by responsibly developing and utilising Africa’s abundant natural resource – Fossil fuels, from where the renewable energy would be funded amidst a gradual energy transition,” Sylva said.
“Nigeria, as the oil and gas industry leader in Africa, is committed to pursuing the energy transition to promote economic growth, and is gradually investing in renewable energies, primarily solar, to reduce carbon emissions, whilst continuing to exploit hydrocarbon resources, especially natural gas – recognised as the energy transition fuel for Nigeria.
“Nigeria has the most extensive gas resource in Africa with proven gas reserves of over 200 trillion cubic feet. It is envisaged that with the Petroleum Industry Act 2021 in full implementation across the broad spectrum of the oil and gas industry, Nigeria is well positioned for a reformed oil and gas industry that could sustain the local demand for natural gas and a high export income.”
