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McKinsey sees rising energy demand in Nigeria, others

By Guardian Nigeria
13 July 2022   |   3:06 am
Energy demand in Nigeria and other African countries is expected to see increased growth over the decade amidst current realities, resulting in growth for energy companies.

Energy demand in Nigeria and other African countries is expected to see increased growth over the decade amidst current realities, resulting in growth for energy companies.

Global management consulting firm, Mckinsey & Company, disclosed this at the Seplat Industry Lecture and Dr. ABC Orjiako send forth event, held in Lagos, recently.

“There will be rising demand for fossil fuels in Africa driven by industrialisation and population growth. Energy demand growth will be led by Nigeria, and this will create tailwinds for energy suppliers like Seplat Energy,” Oliver Onyekweli, Associate Partner and Co-Lead of West Africa Oil and Gas Practice, McKinsey & Company, said whilst making a presentation on the theme of the Lecture dubbed “The Future of African Oil & Gas: Positioning for the Energy Transition”.

“Africa’s growing energy demand also creates opportunities for Seplat to explore renewable energy solutions, such as solar, blue hydrogen,” he added.

Decarbonising production and cost leadership, McMcKinsey explained, will be key going forward as capital providers continue to reduce exposure to oil and gas, with customers preferencing lower carbon shipments. Decarbonisation of assets to the greatest possible extent, it added, will be needed to maintain “license to operate” and maintain access to capital at attractive rates. “As global oil demand peaks, maintaining cost leadership ($/bbl) will be increasingly vital.”

Indigenous producers will define the future of African oil and gas, as International Oil Companies (IOCs) will continue to face pressure to reduce carbon-intensive operations and lower cost of production, according to McKinsey, which also maintained that divestment is likely to continue.

“Companies like Seplat Energy are well positioned to pick up producing assets going forward, provided they can maintain operational excellence. Ensuring continued access to talent will be key,” it added.

McKinsey further explained, “African energy infrastructure is a compelling opportunity. As the energy transition accelerates, gas will become more prominent as a ‘transition fuel’, especially in Nigeria. Significant domestic gas demand is a positive tailwind for Seplat Energy’s ANOH project and gas’ cleaner carbon profile (relative to diesel) should make gas projects easier to finance (can be paired with Liquefied Petroleum Gas (LPG). Investing in gas export infrastructure (example Floating Liquefied Natural Gas (FLNG) could create an opportunity to access a high value international spot market.”

The Pioneer and immediate past Chairman of Seplat Energy, Dr. ABC Orjiako, lauded all the company’s stakeholders for the huge successes recorded so far in the company since inception, saying they were products of hard-work, sleepless nights and resilience.

Commending all stakeholders of Seplat Energy for the great achievements recorded so far, the Chairman, Seplat Energy, Mr. Basil Omiyi, said year 2022 marks a major turning point for Seplat Energy as Dr. Orjiako retires from the Board after leading the Company to achieving monumental milestones over the last 13 years, including 9 years as a listed entity.

In his remarks, the CEO Seplat Energy, Mr. Roger Brown,said Dr. Orjiako drove Seplat Energy’s long-term imperative with regards to global transition away from fossil fuels towards cleaner and renewable energies, advocating a Just Transition, which is to be conducted at an appropriate pace.

That, according to Brown, was why the Board under Dr. Orjiako decided to re-brand the Company as Seplat Energy, which is a signal of “our intent and how we see our future”.