Osinbajo: Defunding of Fossil Fuel Projects by Europe Faulty

* Alleges double standards in continent’s return to coal fired power through 2023 

*Says action in violation of continent’s climate commitment  

*NNPC assures JV partners of prompt settlement of Cash-calls

Peter Uzoho

The Vice President, Prof. Yemi Osinbajo has knocked developed nations of the world, particularly the European countries, for their decision to force their financial institutions to stop funding of gas development projects, describing such decision as faulty.
Osinbajo also described as double standards, the return of European nations to coal fired power generation plants through 2023 and beyond, said that was in violation of the continent’s climate commitment.

The vice president made the assertions last night in Lagos, while delivering a keynote speech on “Nigeria’s Transition to Green Energy,” at the 60th anniversary of the Oil Producers Trade Section (OPTS), a group under the Lagos Chamber of Commerce and Industry (LCCI).

He said most countries including Nigeria have agreed on the need to reduce global emissions to zero and Nigeria had even fixed its target by 2060.
Noting that Nigeria and Africa were major victims of the effects of climate change, the country had raised a few important issues to the wealthier brother-countries in the global north.

According to him, the first issue countries in the developing world were faced with two rather one crisis, listing climate change and extreme poverty as the two challenges confronting them.
Osinbajo said the cause and consequence of the two challenges was energy poverty, adding that the lack of access to electricity for millions was a cause of deepening poverty.

He added, “The third is that the defunding of gas projects in order to force gas rich countries like Nigeria to stop using gas and use renewables instead is faulty.
“These proposals to ban the funding of fossil fuel projects make no distinction between upstream oil and coal exploration; and gas power plants for grid balancing. Also no economy in the world has been known to use renewables, solely, to industrialise.

“Solar power simply does not have the base load capacity yet for industry. Fourthly, stopping the use of gas means that we cannot use LPG for clean cooking stoves to replace the use of kerosene, firewood and charcoal which are dirtier fuels that are widely used for cooking and other domestic purposes particularly in the rural areas.

“The use of firewood means deforestation, cutting down trees and of course desertification and then the loss of our carbon sinks.
“The fifth is the double standards that wealthier countries have adopted on this issue. Today in the wake of the energy crisis, many European nations have made recent announcements to increase or extend their use of coal fired power generation through 2023, and potentially beyond.

“This is in violation of their climate commitments, and analysis suggests that this will raise power sector emissions of the EU by four per cent – a significant amount, given the high base denominator of EU emissions.”

Pointing out that the sixth and most crucial point was that Nigeria  must take quick and informed actions in its national interest, he noted that the country must take the threat of no investments in fossil fuels including gas seriously.

He said many European and other global North countries were setting aggressive targets for use of electric vehicles and the banning of combustion engine vehicles, warning that soon, there may be only a few countries using combustion engines.

“It is also evident that while the Russia invasion of Ukrainian has shown the double standards in not allowing public funding for fossil fuel projects, the wealthier nations are still of the view that this is the correct policy.”

Also speaking at the occasion, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mallam Mele Kyari assured the company’s joint venture (JV) partners of prompt settlement of their Cash-calls.

Represented by the Group General Manager, Treasury, NNPCL, Mr. Dapo Segun, Kyari, who spoke on the company’s perspective on the way forward and growing investors confidence, said NNPCL’s new governance framework provides them the  autonomy and opportunity for self-accounting.

This, he explained would lead to “cashcall settlement including arrears would be settled and handled promptly going forward.”

He said the state oil company was not unmindful of the current challenges particularly security in the operational areas, cashcall arrears settlement and other above ground issues that confront the Nigerian oil and gas industry.

Advising that industry stakeholders must admit that growth and reinvestment of capital was the only way forward, Kyari said the consequences of an alternate future could be quite dire.

 He said particularly heartwarming was the fact that the industry’s long history clearly demonstrates resilience, maintaining that this was another era in its history to demonstrate their resilience and the collective will to overcome the challenges.

He said they had deployed creative solutions to tackle security challenges in the operational areas, announcing that technological intervention for both monitoring and prompt intervention would also be set up while the tackling of the menace was a top priority for NNPCL.

Kyari stated that the NNPCL was a developing story but a clear testament of their bold aspirations and commitment to turn the tide and grow to be a dynamic global energy company of choice and worthy partner for today and years to come.

The GCEO explained that this was fully reflected in their new corporate identity as it aligns with the value proposition with reference to the global energy mix and their growing interest in the low-carbon energy portfolio.

According to him, the NNPC pyramid symbolizes their enduring journey as a dynamic enterprise that adapts to market priorities and fully poised to deliver energy through all times.

He further said that the NNPCL was firmly focused on investing to grow production, both oil and gas, but more importantly gas and gas infrastructure development, creating linkages to the market and expanding midstream value adding opportunities.