Renewable Energy Sources Cannot meet Demand by 2050 Due to Rising Population- Sylva
The Minister of State for Petroleum Resources, Chief Timipre Sylva, made it known that the discussion on divestment in Nigeria's oil and gas industry is highly crucial at this time in the petroleum industry. However, the Minister stated clearly at the Nigerian Association of Petroleum Explorationists (NAPE) workshop titled: ‘The Big Sale: Opportunities in the Nigerian Oil and Gas Industry From Asset Divestments’ that despite the worldwide clamour for a transition to renewable energy sources, it is certain that anticipated economic growth and rising global population especially in Asia and Africa, will significantly push energy demand upwards that renewable energy sources alone cannot meet demand by 2050.
“As global energy consumption grows, it is apparent that oil and gas will continue to remain significant component of future energy mix. Therefore, we have seen this as ample opportunity for profitable investment in the Nigerian professional industry.” He revealed that divestments in Nigeria’s oil and gas upstream sector by International Oil Companies (IOCs) started in 2006 and became pronounced
from 2010 initially to a hostile environment producing them. This later made some IOCs to revalue their portfolios to take advantage of the incentive for offshore oil and gas development under the deep offshore inland basin Production Sharing Contract Act and Petroleum Industry Act (PIA) to avoid host communities related issues to onshore and shallow water leases and licenses.
Sylva stated further that divestment is a fundamental business and commercial strategy and Nigeria is not averse to this business standard
practice. Sylva told stakeholders at the Workshop that Nigeria oil and gas reserves is about 20 billion barrels and over 200 trillion cubic feet (tcf) of proven gas respectively. Before the passage of PIA in August 2021, Nigeria oil and gas sector has been bedevilled by several issues including transparency,
regulatory issues appropriate fiscal exchange, host community benefits and environmental concerns. The PIA 2021 has diligently address all these issues and created a critical foundation for the much desired industrialization and economic development of Nigeria.
The PIA is a supply side enabler crafted to provoke and trigger commercial interests and investments in Nigeria petroleum industry. It has also generated incentives to enable development, distribution, penetration and utilization of oil and gas. Hence, there are three institutions: policy, commercial and regulatory.
The Minister disclosed that the policy institution is to drive policy outlook for the sector and is domiciled in the Ministry of Petroleum Resources. The commercial institution is the Nigerian National Petroleum Company Limited (NNPCL) which has just been fully incorporated under the Companies and Allied Matters Act (CAMA). While the regulatory institutions as constituted are; the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to manage the upstream, and Nigerian Midstream and Downstream Regulatory Authority (NMDRA) to manage the midstream and downstream. He added that in the upstream sector, the PIA has established among others a transparent bidding process for licensing round, a frontier exploration bond to encourage exploration and development of frontier basins.
A host community development trust as well as an environmental remediation fund to ensure environmental pollution arising from production processes. The Act also provides for new gas operation licensee to fully maximize Nigeria vast gas resources. This is in tandem with the 2021/2030 ‘Decade of Gas’ declaration which is entrenched in the midstream and gas infrastructure fund as enshrined in the Act.
However, as asset owners change and evolved, in fulfilment of the mandate to promote an enabling environment in Nigeria petroleum industry as enshrined in section 3E of the PIA in setting up a one stop oil and gas investment centre to create an enabling business environment for would-be investors. Sylva assured stakeholders in the oil industry, that government is committed to closely manage the divestment process to ensure that Nigeria remains a destination for competitive oil and gas business.
“We will continue to listen to our stakeholders to ensure the right scale for our industry. I believe that this Workshop will provide a platform as well as networking opportunities for all participants to share ideas and discuss salient issues related to divestment in the Nigeria’s oil and gas sector.”
“I look forward to listen keenly to the diverse intelligent conversations as these deliberations are important to our national interest plans.”
The Minister thanked NAPE for always been a partner of choice and providing platform for stakeholders in promoting participation and excellent opportunities in Nigeria oil and gas industry.
