By Obas Esiedesa, Abuja
The Secretary-General of the Organisation of the Petroleum Exporting Countries, OPEC, Mohammad Barkindo, and other energy experts have called for investment-friendly policies in Africa to attract portions of the $12.6 trillion investment needed to meet world oil demand till 2045.
Barkindo who spoke at the concluding session at the 14th annual conference of the Nigerian Association of Energy Economics, NAEE, said despite the move to net-zero carbon in most developed countries, crude oil would continue to play a major role in the global energy mix.
According to him, the push for energy transition must take into consideration the economic wellbeing of developing countries and the need to end energy poverty globally.
He said: “It is vital for us to remember that oil will remain the largest contributor to the energy mix to 2045 with more than 27 percent, according to the latest OPEC World Oil Outlook.
“Renewables are developing most rapidly, but at the same time, the world’s economy is set to double and all resources will be required to meet this growing need. Cumulative investment of $12.6 trillion in the upstream, midstream, and downstream is crucial through to 2045 in order to meet this need.
“Investment in 2020 dropped by more than a whopping 30 percent in the face of COVID-19, even worse than the dramatic declines seen in the severe 2015-2016 industry downturn”.
He noted that “the energy security risk that would result from too little investment would heavily impact both producers and consumers. Oil-producing developing countries, like Nigeria, would be particularly hard hit. History has shown that energy insecurity brings with it economic insecurity and geopolitical instability”.
The OPEC scribe pointed out that “All OPEC members, including Nigeria, will have to restrategize to maintain their positions in the new global energy mix, including focusing on economic diversification.
“Oil-producing countries, and in particular African countries that rely on oil and gas production for revenues, must create an investment-friendly climate – to this end, the PIB promises to be a huge success in reviving the fortunes of the oil and gas industries in Nigeria. Reduced foreign direct investment into Africa’s industry could be catastrophic for many countries and peoples”.
Also speaking at the session, Prof. Wumi Iledare of the University of Cape Coast, Ghana, Prof. Adeola Adinikinju of the University of Ibadan, and the President of NAEE, Prof Yinka Omorogbe said Nigeria would need to diligently implement the provisions of the Petroleum Industry Bill to position itself to attract the needed investment.
Prof. Omorogbe explained that investment would go only to where it is attractive, noting that Nigeria must strive to be attractive to investors.
On his part, Prof. Adenikinju stated that energy transition provides a unique opportunity for Nigeria to model the development of its infrastructure to meet the new global demand.
Prof. Iledare, in his remarks, observed that the fiscal terms in the PIB were “very generous and attractive”, but warned that it must be implemented religiously to have the needed impact.