Osinbajo Charges OPTS to take the Lead in Solar Power to Help Drive Nigeria’s Energy Mix
By Ikenna Omeje
As the global push towards energy transition intensifies, the Nigeria’s Vice President, Professor Yemi Osinbajo, has charged members of the Oil Producers Trade Section (OPTS), a subgroup of the Lagos Chamber of Commerce and Industry (LCCI), to take the lead in solar power to help drive improvement in the country’s energy mix.
Osinbajo who gave the charge at the 60th anniversary celebration of the OPTS on Thursday in Lagos, also encouraged members of the group “to accelerate the transition to energy companies and not just oil and gas companies.”
The Vice President further charged members of the group to get involved in the climate finance thinking by taking advantage of the voluntary carbon trading market and play more active role in the transition to clean energy conversations, especially with regards to what a just transition should look like.
Osinbajo noted that even though there was evident from so many adverse climate occurrences such as floods, desertification, rising water levels, record high temperatures, that there is clearly a global climate crisis, developing countries like Nigeria have raised some concerns regarding the approach to the transition.
“Now, most countries, including Nigeria, of course agree that we must reduce global emissions to zero. In our case, our target is 2060. We are major victims of the effects of climate change than everyone else, but there are a few important issues that we have flagged to our wealthier brother countries in the Global North who want to move at a quick pace towards the target that has been set.
The first is that we in the developing world are faced with two, not one existential crisis. One is climate change. The other is extreme poverty. The cause and consequence of which is energy poverty, or the fact that the lack of access to electricity for millions is a cause of the deepening poverty in many developing countries, especially African,” Osinbajo said.
In his address, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said few years ago, the country’s daily production averaged 2.3 million barrels per day (mbpd), which exceeded the OPEC quota, adding that the concern then was how to bring down production so as to comply with the quota.
Represented by the Acting Permanent Secretary Ministry of Petroleum Resources, Kamoru Busari, Sylva regretted that the country’s production has plummeted to less than 1mbpd at a time crude oil price has reached its highest peak in five years.
“Thus, Nigeria’s oil and gas sector can best be summarized as prospect good, obstacles considerable with security, technical issues, reduced investment and asset litigation identified as the mitigating factors to growth.
Nigeria’s upstream sector has never witnessed this scale of destruction of our facilities with over 265 illegal refineries within the SPDC corridor alone; with concertized efforts to bring them down, only resulting to creating new ones,” the Minister said.
To address the current challenges facing the industry, and restore the confidence of key partners, he said: “The federal government is taking the lead on the issue of security of our oil and gas infrastructures with a wider and plausible approach on the matter with host communities participation identified as a critical, stabilizing factor for a secure environment.”
With Nigeria having adopted gas as its transition fuel and the government’s Decade of Gas initiative aimed at making the country a gas powered economy by 2030, Sylva stressed the need to create a conducive business environment to attract all the available foreign direct investment into the sector with formulation of deliberate policies and regulations that would encourage investors and enhance private businesses.
Also speaking at the event, the Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, said the national oil company was firmly focused on investments to grow oil and gas production, more importantly gas and develop gas infrastructure, create linkages to the markets, and expand its value adding opportunities.
Represented by the Group General Manager, Treasury, Dapo Segun, Kyari noted that as an industry, there is a need for operators to show that they care, especially in dealing with their host communities. He explained that the Petroleum Industry Act (PIA) created the host Communities Fund and governance structure, and called for stakeholders cooperation to make it a resounding success.
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“The global market markets is becoming more open and dynamic. While we are uniquely positioned to seize opportunities, we count on the partnership with the industries to enable us harness and nurture values to (the) benefit of our customers, our shareholders and our stakeholders alike,” Kyari said.
Earlier in his address, the Chairman of the OPTS, Rick Kennedy, said despite the challenges facing the industry, opportunities for improvement and growth exist.
He informed that OPTS companies account for about 90 percent of the country’s oil production and pay tens of billions of dollars in taxes as royalties. And through direct and indirect employment of people, local contractors, and service providers, he said OPTS members have continued to provide significant livelihood to Nigerians.
“Working with the government at all levels, we have the responsibility and commitment as a group to get the right policies for our people and for the country,” Kennedy who was represented by the Managing Director of Shell Petroleum Development Company (SPDC) and Country Chair of SCiN, Osagie Okunbor said.
“As a group, OPTS member companies account for about 90 percent of Nigeria’s oil production and contributes significantly to the domestic and export gas production and supply. Over the last decade, OPTS member companies accounted for 40 to 60 percent of government revenue and 85-95 percent of exports earnings.”
OPTS is made up of 29 oil and gas producing companies. Out of this number, 21 are indigenous and homegrown companies. The group was founded in 1962 in response to the burgeoning oil and gas sector following the discovery of oil in Nigeria in 1956.
