Hydrocarbon industry will still remain a multi-trillion dollar industry in coming decades — Buhari

Nigeria President Muhammadu Buhari attends the fifty-sixth ordinary session of the Economic Community of West African States in Abuja on December 21, 2019. (Photo by Kola SULAIMON / AFP)

By Ikenna Omeje

President Muhammadu Buhari, on Monday, said that the hydrocarbon industry will still remain a multi-trillion-dollar industry in decades to come.

The President stated this while declaring open the 4th Nigeria International Petroleum Summit (NIPS) with the theme, “From Crisis to Opportunities: New Approaches to the Future of Hydrocarbons.”

Represented by the Minister of State for Petroleum Resources, Chief Timipre Sylva, Buhari said  that  based on experts projections, 80 percent of global energy  needs between now and 2040, will still come from hydrocarbons.

He noted that the outbreak of Covid-19 created a crisis for the global economy in general, and the oil and gas industry in particular, adding that addressing the crisis it created has presented both challenges and opportunities.

“Crisis is often an opportunity to redefine objectives, provide the path for great discovery. The crisis the oil and gas industry is facing today was necessitated by Covid-19. It accelerated an unprecedented demand for disruption and supply glut that generated the crisis for the global economy in general, and the oil industry in particular. Addressing this crisis has presented both challenges and opportunities. The immediate challenge is that the global agenda for energy transition has slightly taken the back seat. Governments across the world are now more focused on managing the Covid-19 pandemic and its impacts on economies than the quest for the energy transition.

“However, energy transition is real. Renewable technologies are getting cheaper, and investors are increasingly conscious of environmental issues and are beginning to turn their back on hydrocarbon investment. But history has shown that human beings have insatiable appetite for energy, which renewables do not have the capacity to cope with in the foreseeable future. Experts project that about 80 percent of the world’s energy needs till 2040, will still come from hydrocarbon. Fossil fuels will continue to be the source of dozens of petrochemical feedstock that companies will transform to versatile and valued materials for modern life. Thus, hopefully, the hydrocarbon industry will still remain a multi-trillion-dollar industry in the coming decades.

“For us as a country with vast hydrocarbon retention, that’s an opportunity. How we exploit that opportunity is a matter of strategy. Developing that strategy is at the heart of the core objective why in 2016, the Federal Executive Council of this administration, approved the establishment of the Nigeria International Petroleum Summit (NIPS),” he said.

Buhari further noted that the fundamental outcome of the 2021 summit should be about strategies and new approaches to the future of the country’s hydrocarbon industry, and how to return to the attractive industry performance of the pre-pandemic era.

“In this regard, lower cost is critical. Cost is the energy of the future. The industry needs to drive down cost per barrel before it is exterminated by crisis, falling below production cost – a phenomenon we experienced at the onset of the pandemic,” he said.

According to him, giving that hydrocarbon energy sources will continue to account for about 80 percent of the global energy demand between now and 2040, the country cannot turn its back on more exploration, as well as work on taking advantage of short term opportunities by using existing technologies that can extend the life of mature oilfields.

The President commended the Federal Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC), the Department of Petroleum Resources (DPR), and other relevant Ministries, Departments, and Agencies of the government for their steadfastness in helping his administration build a robust hydrocarbon industry. He also commended the International Oil Companies (IOCs) — operating in the country, the indigenous oil firms, and financial institutions in their roles in keeping the industry running despite the current challenges.

 NIPS is a Federal Government of Nigeria official petroleum industry event with the Federal Ministry of Petroleum Resources and all its parastatals including the NNPC, NCDMB, DPR, PEF, PTDF, and PTI as joint hosts

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