July 25, 2024
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OIL & GAS

Despite Crave for Green Energy, Nigeria Will Produce More Oil and Gas

The Nigerian and African oil and gas industry faces significant challenges amidst the evolving global energy landscape, ThisDay reports on Monday. However, the countries will continue to explore more from the sector for revenue generation.

During the 7th Nigerian International Energy Summit in Abuja, the Chief Financial Officer of Lekoil Nigeria Limited Mr. Edward During, discussed these challenges with Peter Uzoho.

Here are the key points from their conversation:

Impact of Emerging Trends: The transition towards renewable energy and the reluctance of international financial institutions to fund fossil fuel projects pose significant challenges to the oil and gas industry in Nigeria and Africa. This funding gap threatens to impede projects and reduce energy supply amidst increasing demand.

Inconsistent Standards: Western nations advocate for reducing oil and gas development in Africa while concurrently expanding their reserves. This standard disparity places additional pressure on African countries, especially those with significant energy needs and limited access to sustainable alternatives.

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Need for Unified Advocacy: African countries must present a unified voice to international communities to highlight their unique developmental challenges. This includes advocating for continued investment in the upstream oil and gas sector to address energy deficits and promote economic growth.

Transition to Renewable Energy: Operators in the oil and gas industry must diversify their investments to include renewable energy projects. While renewable energy is the future, it must also be economically viable. Therefore, operators should explore innovative financing options and leverage transferable skills to facilitate this transition responsibly.

Challenges in Financing: Despite the push towards renewable energy, financing remains a significant challenge for both green energy and fossil fuel projects. While green energy projects may attract more funding, fossil fuel projects require economic viability and regulatory support to secure investments.

Role of African Energy Bank: Establishing an African Energy Bank could facilitate investments in both green energy and traditional fossil fuel projects. This institution could catalyze economic development by providing financing options tailored to the continent’s unique energy landscape.

Optimism for Oil Production: Despite the challenges, Mr. During remains optimistic about Nigeria’s oil production potential, especially with the privatization of NNPC. Increased production could bolster the economy and drive positive outcomes across various sectors.

Focus on Existing Assets: Lekoil Nigeria Limited aims to prioritize existing assets rather than expanding its portfolio. Their current assets, including Otakikpo and OPL 276, hold significant development and production potential, providing ample growth opportunities without overextension.

As an operator and expert in the oil and gas industry, Mr During identified them as a very serious problem “because obviously, the renewable energy field has not yet matured enough to be able to take care of the energy needs of the world, and suddenly, all fossil fuels investments have been stopped or blocked, which is what we still depend on for our energy needs.

“And at the same time, we know that demand for oil or energy is increasing. So, basically, with that problem, you’re going to end up in a situation where you have chaos.

“These countries want Africa to catch up immediately. Countries like Namibia have just discovered massive amounts of reserves and most of their population has no access to sustainable energy. It is unrealistic to ask them to abandon these projects and focus on investment in renewable energy.

“The technology needs to be matured further. For example, if you’ve got sun, wind, etc these cannot easily be stored. The technology needs to improve in this area. So, these are all challenges for the oil industry, but also opportunities. It means we can play on all the sides. We can be going on sustainable energy and we could also continue to develop our existing sources,” he said.

 

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