How Nigeria can survive energy crisis, campaign against fossil fuel
Renowned energy experts have warned Nigeria to stop listening to developed countries in its quest to ensure sustainable energy security. They insisted that unless the country takes an independent position and comes up with home-grown solutions, the prevailing energy crisis could scuttle the economy.
This comes at a time when the global community is divided over energy transition, which downplays the role of fossil fuel in the energy equation due to climate change.
The experts at 12th Emmanuel Egbogah Legacy Lecture Series in Port-Harcourt said the country could be in for a disaster if existing energy resources in the country are jettisoned for some foreign ideologies.
Government’s inability to fix existing refineries, rapid divestment by international oil companies (IOCs), persistent crude oil production challenges and high cost of oil production raised serious concerns for the industry stakeholders.
While the Debt Management Office (DMO) disclosed that Nigeria’s total public debt soared to N87.38 trillion by the close of the second quarter of 2023, revenue from crude oil has plummeted as crude oil production shrinks to about 1.2 million barrels per day even as the country spends almost all its earnings from crude sales on premium motor spirit (PMS) importation.
Speaking on ‘Climate Change and the Geopolitics of Energy Transition’, a professor of oceanography and the blue economy, who was the keynote speaker at the event, Chidi Ibe, insisted that Nigeria must move wisely to reposition its petroleum industry deliberately and aggressively, including diversifying its value chains.
The professor also asked Nigeria to target private equity of about $1 trillion currently being spent on energy and if necessary, leverage the sovereign wealth, to bring to realisation its energy ambition.
At a time when existing refineries are already importing crude oil and gas feedstock, Ibe asked Nigeria to ramp up crude oil production and build up reserves of oil and gas.
He noted that there was a need to urgently reduce the cost of crude production, adding that while Saudi Arabia and Kuwait produce oil at about $11 per barrel, the cost remained at about between $25 and $35 in Nigeria.
According to him, Nigeria must build internal refining capacity to prevent a single individual or company from holding the country to ransom. He said the country’s refining capacity must remain on the average of 1.3 million barrels per day to make headway in the search for stability in the sector.
He also called for the building of industrial and manufacturing capacity to use oil and gas as feedstock. Ibe said there is a need to intensify gas-to-power schemes and maximise gas export for domestic use, especially in transportation.
“Private equity firms are estimated to have invested more than $1 trillion in the energy industry since 2010 mostly in fossil fuels, which underlines where the net-zero financing battle is heading next. I would say we should target those funds and, if need be, swoop on the Sovereign Wealth Fund (SWF). It is created for crunch times like this when new directions become imperative and no help from elsewhere,” Ibe said.
Principal Consultant, Reservoir and Surface Facilities Solutions, Oluseyi Afolabi, said Africa should be able to do what it intends to do instead of dancing to the tunes of colonial masters. Afolabi said the refineries must not delay, adding that Nigerians always could run the sub-sector.
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