Yange Ikyaa from Cape Town
The African continent is performing ahead of other regions of the world in terms of upstream investments in fossil fuel development, with 61 billion barrels of oil discovered on the continent in a space of 10 years.
This was stated by the Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Mallam Mele Kyari, during the opening session of the African Energy Week 2022 in Cape Town, South Africa.
Kyari also maintained that Africa has a huge undeveloped resource and, no doubt, more yet to find volumes. He further disclosed that in the decade leading up to 2020, 61 billion barrels of oil equivalent of conventional resources were discovered in Africa, and that natural gas accounted for the bulk of these resources, much of which is yet to be commercialized.
According to him, “with respect to upstream investments and growth, Africa is outperforming other regions. Soon, oil and gas investments will not be only dominated by Nigeria, Angola and the Congo, but much of the future spending will be in other areas, such as Uganda, South Africa, Senegal, Cote d’Ivoire, Mozambique and Namibia.”
Almost half of the project spending beyond 2025, he said, is slated for pre-FID project, and that this will benefit investors and also grow the share of government revenue.
For this reason, the NNPC Boss maintained that upstream fiscal revenues in 2022 into the coffers of African oil and gas producing nations are expected to reach an all-time high compared to a decade ago.
Commenting on the recent transformation of NNPC from a government owned company into a private commercial entity, Kyari explained that “over the last 45 years, we have built a national oil company that has grown across the local value chain. We have built our reserves up to 37 billion barrels of oil and over 200tcf of proven gas reserves, and we have the largest network of retail stations in the country and a footprint that touches on host communities.”
The enactment of the Petroleum Industry Act (PIA) that enabled NNPC’s incorporation, he said, means that the company has a legally binding mandate to compete, and that NNPC is going to be commercially driven to deliver value.
According to him, “we will be the leader in the energy industry of Africa, showing the way to sustainable growth through the deployment of appropriate technologies to decarbonize our operations, and I look forward to collaborating to shape what the next 50 years will look like for energy in Nigeria and beyond.”
On the ongoing energy transition debate, Kyari held that recent energy crisis has underlined global dependence on fossil fuels, at least, in the short to medium term, with the world calling out for even more oil and gas resources. “And I dare say that Africa is well positioned to respond,” he concluded.
Government will work to grow and sustain that revenue or economic growth, and will involve to minimizing bureaucracy to speed up the process of permitting licenses and approvals, in addition to building investor confidence through transparency and good governance, as well as incentivizing investors and ensuring stability and pricing of terms.