The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has said that in the next 50 years, oil and gas would still be relevant, noting that what should be done was to make them much more climate friendly with efficient mechanisms in place.
Kyari assured that the NNPC would continue to lead the conversation in that direction.
Kyari who spoke at the Seplat Energy Summit 2021 with the theme “Global Trends in Energy Transition and the Africa Perspective,” argued that the mistake being made all over the world was that people see net zero as zero fossil fuel in the future.
He noted that there must be fair and practical steps to close the energy gap in Africa, explaining that there must also be a transition fuel in form of gas to close the huge energy poverty in Nigeria.
The federal government yesterday also insisted that it would be unfair for richer nations to stampede developing countries like Nigeria into abandoning their resources for the current energy transition, urging its advocates to consider the peculiar circumstances of every nation.
Speaking at the same event, the Minister of State, Petroleum, Chief Timipre Sylva, maintained that the continuous exploitation of the country’s oil resources would be crucial in supplying world markets with a broad portfolio of energy options.
During the hybrid event, Sylva noted that Nigeria requires fossil fuel as its base-load energy source.
He explained that while this was a major concern for climate activists in developed nations, the clamour to emphasise only renewable energy as the sole pathway to energy transition was a source of concern for African countries.
Sylva explained that Nigeria was still working to achieve industrialisation, address energy poverty and ensure reliable power supply, emphasising that the call to jettison fossil fuels all together may not be feasible for now.
“This is why in Nigeria, we reject the concept of a single pathway to the energy transition. Indeed, we prefer the concept of ‘just’ energy transition which takes into cognisance the specific circumstances of each nation in developing the energy transition pathway that best achieves the environmental, social, political and economic objectives of the transition in that specific nation.
“Multiple pathways to the energy transition should and must exist in order to ensure that no country is left behind in the process of achieving net-zero by 2050.
“In Nigeria, the position above recognises the possibility of a structural decline in the price of oil and consequential fiscal vulnerabilities that may arise, as well as the increased risk exposure therefrom, and is responding to it in several ways,” the minister explained.
The former Bayelsa governor pointed out that Nigeria would continue to focus on gas, which he said is at the heart of the energy transition and represents the first step in the journey to renewables away from oil.
Sylva averred that gas was not just a transition fuel for Nigeria, but also represents a destination fuel, as the country envisages that it will be part of its energy mix by 2050, given the vast resources that can be commercialised and utilised.
Furthermore, he stressed that generous incentives have been proposed in the Petroleum Industry Act (PIA) 2021 to enable development, distribution, penetration and utilisation of gas.
“Our proven gas reserves are sufficient to cover current demand levels and support plans for the construction of nine new gas-fired power plants with a combined name-plate capacity of nearly 6,000 MW by 2037,” he added.
While congratulating the leadership and staff of Seplat on the formal unveiling of the new brand identity, he noted that it bears testament to the company’s movement with the times, evidenced by its full transition to an energy company.
He stated that the PIA would assist in harnessing Nigeria’s potential to achieve its plan of increasing oil production to four million bpd and oil reserves from 37 billion barrels to 40 barrels while also drawing on the country’s estimated 600TCF of natural gas reserves to provide clean and efficient energy.
Sylva noted that the provisions relating to voluntary conversion, production allowances, lower royalties and taxes, cost optimisation focus in the PIA have been enshrined to address the envisaged fiscal vulnerabilities.
The Vice President, Prof. Yemi Osinbajo, who was represented at the event by the Minister of State, Environment, Sharon Ikeazor, said over the next decade, every aspect of national energy system was expected to be affected by changes in climate and energy policy, financing, continuous technological advancement, and shifts in energy supply and demand.
He argued that energy transition could no longer be limited to incremental steps, but must become a transformational effort based on rapid upscaling and implementation of all available technologies to innovate for the future.
Osinbajo said Nigeria has now developed its energy transition plan, through the Cop 26 plan which has the three core objectives of achieving universal access to energy by 2030, net zero emissions by 2050 and industrialisation to alleviate poverty and drive economic growth.
He added that the transformation of the energy sector offers ample opportunities for sustained economic development, social inclusion, energy security, improved health, job creation, and other societal benefits if achieved in a just and inclusive manner.
“However, this would require careful management and broad engagement in order to balance delicate and diverse interests. This brings to the fore the vulnerability of workers, communities, government sectors, and enterprises.