By Obas Esiedesa

ABUJA—The Federal Government, yesterday, frowned at the decision by International Oil Companies, IOCs, in the country, to reduce or outrightly stop long term investments in the upstream projects in the country.

With Nigeria struggling to raise oil production level with growing cases of oil theft, the Minister of State Petroleum Resources, Timipre Sylva, warned that such decisions by the IOCs threatens the country’s growth plan.

Sylva, who spoke in Abuja at the 2022 Oloibiri Lecture Series and Energy Forum, OLEF, organised by the Society of Petroleum Engineers, with the theme: ‘Global Energy Transition: Implications on Future Investments in the Nigerian Oil and Gas Industry’, said global push towards energy transition must not jeopardise the development of African countries, especially those with huge hydrocarbon resources.

He cautioned that “the risk of limited international financing could jeopardise Nigeria’s energy transition and roadmap to attaining net-zero. We have seen policies and pronouncements at governmental and corporate levels aimed at discouraging investment in fossil fuels.

“We have seen decisions by some IOCs to reduce or outrightly stop long-term investments in upstream projects and development of new technologies for exploration, production and processing of crude oil, or servicing the existing technologies. Penalties may soon be put on the production and use of fossil fuels, directly or indirectly, in order to bridge the gaps that may be created by large taxes raked by developed countries from the consumption of oil.”

The minister pointed out that “Nigeria has very low levels of carbon emissions – 0.61t CO2e per capita (2020) which compares to 14.24t CO2e per capita in the USA and 4.85t CO2e per capita in the UK. This should normally reduce the pressure on Nigeria to quickly decarbonize its economy.

“Nigeria should harness all the available energy resources in order to assure, not only availability and accessibility, but also affordability and sustainability, to meet its energy demand, which will increase by leaps and bounds in coming years, in order to sustain economic growth in the face of increasing population

“Oil will also continue to be much needed especially for the development of our lagging petrochemical industry. This vital and abundant resource can also be made cleaner and environment-friendly using appropriate technology.

“That notwithstanding, Nigeria still aims at reducing greenhouse gas emissions by 20 per cent by 2030 through anti-gas flaring regulations and working closely with oil and gas companies”.

Chief Sylva stated that while Nigeria will not wish away its vast hydrocarbon resources, “let us remind ourselves that the energy transition is real. That is the direction the industry is moving globally and Nigeria cannot afford to be left behind”.

In his keynote address, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe assured the oil industry operators that the government has put in place measures to protect investments in the upstream sector.

He said: “We at the Commission, empowered by the Petroleum Industry Act (PIA) 2021, have steered our focus towards working with all stakeholders to ensure business investments in the oil and gas sector are adequately protected. We are striving to ensure that all bottlenecks associated with regulatory processes are eliminated or minimised, to ensure seamless operations as we gradually roll out the key policy initiatives necessitated by the PIA.”

On his part, the Executive Secretary of Petroleum Technology Development Fund, PTDF, Bello Gusua, noted that with the global move to make renewable energy as the main source of energy, investments into hydrocarbons would decline.

 “The Energy and Petroleum Industry today is in dire need of technology and skills to increase its viability and profitability. Furthermore, the industry is struggling to recover from the negative effects of Covid-19 pandemic and amid this slow recovery, it is faced with hikes in oil prices as a result of the current war between Russia and Ukraine”, he added.

Earlier in his welcome address, the Chairman of the Society of Petroleum Engineers, Prof. Olalekan Olafuyi pointed out that the world was facing a serious energy challenge that requires an all-inclusive approach that could address specific regional problems with their peculiarities.

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