Kyari: Why Nigeria, Others Must Adopt Flexible Energy Transition Plan

•Forecasts gloomy prospects for oil industry in next 30 years 

•Says 970m Africans lack access to clean cooking gas 

•Seplat Energy’s ANOH, Sapele gas projects to fuel 2000MW by 2024

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari, yesterday made a case for Nigeria to be given the freedom to adopt a more gradual and flexible approach to the ongoing energy transition.

He also forecasted that the global oil and gas industry does not look bright in the next 30 years or more, due to the current pressure driven by energy transition to ditch fossil fuel.

Speaking while presenting a paper at the 40th annual international conference and exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos, Kyari who spoke on the topic: “Global Energy Transition and the Future of the Oil and Gas Industry: Evolving Regulations, Emerging Concepts, and Opportunities,” said rapid demographic changes would continue to drive up demand for energy services across Africa in the coming decades.

Represented by the Executive Vice President, Upstream, Adokiye Tombomieye, Kyari said oil demand in Africa continued to stand at an average of 4.36 million barrels per day in 2022.

He said that although Africa has the world’s lowest levels of per capita use of modern energy, energy demand is set to increase with growth in population and incomes, lamenting that 970 million Africans lack access to clean cooking gas.

Kyari told the gathering that the energy mix had become more diverse, with Africa still dominated by fossil fuel and hydropower making the only meaningful renewable energy contribution.

“It is therefore our firm position that fossil fuel will continue to contribute more than 50 per cent to the energy mix in Africa and possibly the rest of the world.

“However, the most important question for this strategic gathering is around competitiveness of the hydrocarbon sources compared to renewal comparatives in terms of cost, energy contents and sustainability.

“Recent happenings in the Russian-Ukraine crises have seen the resurgence for the need for fossil fuels and in some cases adverse use of high-carbon generating energy sources like coal, this also points to the fact that energy transition implementation has to be gradual.

“It is therefore imperative for the industry, NAPE and key stakeholders to rededicate ourselves towards scaling above the challenge posed by transition.

“One way to scale up is by delivering the most advantaged barrels to the world while paying attention to environmental sustainability through huge investments in technology and innovation.

“Nigeria and the rest of resource dependent nations would require oil to transit out of oil. However, we will remain sensitive to the growing global concerns relating to global warming, climate change, and the increased attention in national and international public discourse generally due to increasing environmental concerns,” he explained.

He noted that currently, energy transition was moving very aggressively, adding that major fund providers for petroleum upstream investment are now activists and anti-fossil fuels.

The NNPC chief executive said the financing of oil and gas projects had become more complicated as banks, multilateral lenders, and investors are diverting capital away from fossil fuels to renewable energies.

“However, there is also a need to recognise that while aggressive energy transition programmes are being pursued in developed countries, many emerging countries, especially those with hydrocarbon-dependent economies like Nigeria, require a more gradual and flexible approach to the energy transition mantra,” he added.

Meanwhile, Seplat Energy Plc, has said its ANOH and upgraded Sapele gas projects could fuel another 2000 megawatts of electricity by 2024, thus displacing the wide use of diesel/petrol generators for electricity as well as the use of biomass as cooking fuel.

The Chief Executive Officer of Seplat Energy Plc, Mr. Roger Brown, who spoke at the NAPE event, said Seplat believes that the country needed to utilise gas to displace 20GW diesel/petrol generators, as well as the use of biomass as cooking fuel.

Beyond displacement, however, Seplat Energy said increased gas production and penetration in Nigeria presents huge opportunity for the Nigerian state and people.

“Using gas to provide more affordable and reliable energy will boost Nigeria’s economy; drive development; create jobs and prosperity; reduce emissions from diesel usage; support future renewable deployment; and enable a just and affordable energy transition,” Brown added.

The Seplat Energy boss told the conference attendants that it was encouraging that a just and affordable energy transition is now on the agenda at COP 27 as energy transition is about balancing realities.

“Poor infrastructure cum theft of national resources; over-reliance on oil exports and imports of refined products; global decarbonisation imbalance with development; and extreme flooding, amongst others, are some of the challenges to be considered,” he added.