Nigeria’s ambition of growing crude oil production to at least four million barrels per day as well as building a national reserve of 40 billion barrels remains, President Muhammadu Buhari has said.
The President said these ambitions remain the country’s national aspirations regardless of the current global drive towards renewable energy as alternative to fossil fuel.
Speaking at the opening of the 4th Nigeria International Petroleum Summit (NIPS) in Abuja, Buhari said projections which show current energy growth was towards renewable, fossil fuel would remain a major feedstock for petrochemical companies in the foreseeable future.
Represented by the Minister of State for Petroleum Resources, Timipre Sylva, the President said energy industry expert projections are that about 80 percent of the world’s energy mix would by 2040 still come from hydrocarbons despite the focus on renewable energy.
“Fossil fuels will continue to be the source of dozens of petrochemical companies’ feedstocks transforming into versatile and valued materials for modern life.
“Thus, the hydrocarbon industry will remain a multi-trillion-dollar industry in the coming decades”, the President said.
The forecast, the President noted, puts Nigeria at an advantaged position, considering the country’s vast deposits of hydrocarbons.
Urging industry stakeholders to take advantage of these endowments and invest hugely in the sector, Buhari said as a country the government sees the vast hydrocarbon potentials as massive opportunity.
“How we exploit that opportunity is a matter of strategy. Developing that strategy is the core objective the Executive Council of the Federation in 2016 approved the establishment of NIS to create a forum for sharing of ideas on how to harness these opportunities.
Despite the country’s aspirations, coupled with the global agenda on renewable energy, Buhari said the immediate global challenge caused by COVID-19 pandemic has put the energy transition in the back seat.
Governments across the world, he said, are now more focused on managing the COVID-19 pandemic and its impact on economies than the quest for energy transition.
This, he said, has led to the gradual realization that the transition to 100 percent renewable energy may not happen in the near future.
Although he axknowledged the reality of the global energy transition, with renewable technologies getting cheaper and investors increasingly conscious of environmental issues, he said investors are beginning to turn their backs on hydrocarbon investments.
However, he said history has shown that human beings have insatiable appetite for energy which renewables does not have the capacity to cope with in the foreseeable future.
The President said his administration was totally committed to the goal of overhauling the country’s oil and gas industry, by building the structures to help realize “the ambitious goals of ramping up crude oil production to at least 4 million barrels per day and building a national reserve of 40 billion barrels”.
“These goals remain sacrosanct, and guiding principle to our overall outlook for the industry. Creating the conducive business environment for our hydrocarbon industry to thrive is no longer a choice, it is a necessity”, he said.
On the theme of the Summit “From crisis to opportunities: New approaches to the future of hydrocarbons,” the President said “crisis is often an opportunity to re-define objectives and that provides the pathway for re-discovery.
“The crisis the oil and gas industry is facing today was necessitated by the COVID-19 pandemic. It accelerated an unprecedented demand disruption and a supply glut that generated the crisis for the global economy and the oil industry particular”, he said.
While commending the Ministry of Petroleum Resources, the Nigeria National Petroleum Corporation (NNPC), Department of Petroleum Resources(DPR) and other relevant MDAs for their steadfastness and helping the administration build a robust hydrocarbon industry, the President said his administration would continue to provide the enabling environment for robust investments in the oil and gas sector for the overall benefit of the Nigerian people.
Earlier, Sylva said the effect of COVID-19 has set a new direction in the oil and gas sector, observing that “the industry has been overwhelmed by unprecedented crisis as a result of the COVID-19 pandemic.
The crisis, he said, heralded volatile challenges, uncertainties, low oil prices and financial impacts that led to the downsizing and bankruptcy in some instances.
He said the theme for this year’s summit was; “The new approaches to the future of hydrocarbons”.
The minister said “the scenario being projected by some experts is that energy transition and weaning the world of fossil fuel would make the world a better place. I believe so too, but I do not see that happening overnight.
Hydrocarbons, he said, have provided the majority of the world’s energy for centuries, and that fact is not going to change all of a sudden.
“I am yet to see that disruptive technology that has great flexibility, affordability and applicability to replace oil and gas in the near future”, Sylva said, adding that “with increasing in oil price volatility and increased pressure for cost reduction, our industry needs to reinvent itself so that we can fully utilize the dividends to set the country on the path to industrialization and prosperity. That is why this summit is focusing on new approaches”.
“For me, that new approach is collaboration. That is the paradigm shift I want to focus at this summit. I know that collaboration has been a buzz word in the oil and gas industry for years but the industry has equally paid lip service to it.
“With new set of marginal field licenses on the scene, there is no better time to shift the mindset, but now. I say this because at this time of unprecedented crisis occasioned by the COVID-19 pandemic, there is no better strategy to achieve success for these new marginal fields, especially for the cluster of contiguous fields”.