By Eddy Ochigbo
Recently, the Minister of State for Petroleum Resources, Chief Timipre Sylva contended that the future of Africa’s oil and gas industry remains very bright despite the challenge posed by energy transition. He was speaking in Lagos at the 45th Nigeria Annual International Conference and Exhibition (NAICE) organized by the Society of Petroleum Engineers (SPE) Nigeria Council, with the theme: “Global Transition to Renewable and Sustainable Energy and the Future of Oil and Gas in Africa.”
The minister said Africa has a key role to play in securing a greener world where clean natural gas could be used to power the continent’s economies sustainably, charging petroleum engineers and other industry stakeholders present at the event to not fail the continent.
“I have no doubt that the future of Africa’s oil and gas industry is still bright, despite the global energy transition uptake. You are central to making this a reality. Don’t fail us”, he told critical stakeholders, pointing out that transition to low carbon energy sources would make the world a better place with a cleaner climate.
While revealing that energy transition was better viewed as providing clean energy, and not as abandoning some energy source, he stated that the current forecast shows that the global cost of renewable energy was declining steadily because its reliability and sustainability has been challenged by the recent energy crisis in Europe and the Americas, thus re-awakening new interest in fossil fuel supplies.
“We have seen coal plants being fired up in several European countries and a renewed interest in natural gas supply from Africa. There are also reports of increased oil and gas drilling operations in the USA with spontaneous permits being granted. Anticipated economic growth and rising global population, especially in Asia and Africa, will significantly push energy demand upward to a level that renewable energy sources only cannot meet by 2050.
“All these imply that the global energy mix will remain with us, amidst greater dominance by hydrocarbon energy sources, at least in the foreseeable future. It also indicates that energy transition will remain a gradual process, as against a rapid and radical shift as some have presented it,” Sylva disclosed.
He suggested that adaptive strategies for energy transition should be considered across the continent, explaining that the different socio-economic, political and developmental peculiarities of individual nations should be taken into account in their transition plans.
He described as unjustifiable, the fact that Africa was still bedeviled by chronic energy poverty in this modern age, with about 600 million people without access to electricity, and about 900 million without access to clean cooking fuel.
According to him, all available energy sources would be required to mitigate the high level of energy poverty in Africa to achieve the United Nations Sustainable Development Goals (SDGs) of providing access to affordable, reliable, sustainable and modern energy for all, adding that Africa’s approach towards the climate-change-net-zero-emission, should be to optimize the use of the continent’s abundant gas resource as a transition fuel option.
Sylva declared: “Africa’s energy poverty would have to be addressed by responsibly developing and utilizing Africa’s abundant natural resource – Fossil fuels, from where the renewable energy would be funded amidst a gradual energy transition. Nigeria, as the oil and gas industry leader in Africa, is committed to pursuing the energy transition to promote economic growth, and is gradually investing in renewable energies, primarily solar, to reduce carbon emissions, whilst continuing to exploit hydrocarbon resources, especially natural gas – recognized as the energy transition fuel for Nigeria.
“Nigeria has the most extensive gas resource in Africa with proven gas reserves of over 200 trillion cubic feet. It is envisaged that with the Petroleum Industry Act 2021 in full implementation across the broad spectrum of the oil and gas industry, Nigeria is well positioned for a reformed oil and gas industry that could sustain the local demand for natural gas and a high export income.
“On a relevant note, the campaign for reduced funding of fossil fuels explorations has led to a gale of divestment by the international oil companies in Nigeria. I strongly believe that this is an opportunity for oil and gas exploration in the country because Nigeria’s independent producers have developed capacity to fill-in the gap. It must be admitted that the risk of limited international financing of oil and gas projects could jeopardize Africa’s energy transition and roadmap to attaining net-zero. Hence, Africa will have to look inward and harness its resources, while accelerating technology development, to face the global energy transition onslaught. We need to develop cross-border infrastructure and expand regional energy market to guarantee long-term energy security,”
On his part, the President of SPE International, Mr. Kamel Ben-Naceur, revealed that an estimated five trillion cubic meters (5TCM) of natural gas had been discovered in some African countries including Namibia, Mauritania, Senegal and other basins. The Tunisian-born president of SPE International also projected that Africa could supply another 30 billion cubic meters by 2030.
Revealing that the world had experienced 30 per cent reduction in upstream investment between 2019 and 2020, worse than the 26 per cent drop in 2015 and 2016, he said the situation had compounded over the last five to six years, with the global upstream investment declining by almost 50 per cent.
“We have never seen that on a year-to-year basis. And so, these are things that are leading to very strong inflationary pressures around the world and also creating very deep concerns about the sustainability and affordability of energy.
“So looking forward to next year, we see that the oil and gas demand will come back above the levels of the pre-pandemic which is very good news for our industry. But we are not prepared. We have underinvested in oil and gas industry and this is the reason for those prices,” the SPE president said.