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NNPC: Global Attack On Fossil Fuel Investment Will Continue To Worsen Energy Cri - Nairaland / General - Nairaland

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NNPC: Global Attack On Fossil Fuel Investment Will Continue To Worsen Energy Cri by AntiNigerian: 9:20am On Dec 02, 2021
NNPC: Global Attack on Fossil Fuel Investment Will Continue to Worsen Energy Crisis

•$20bn spent on EPC, oil sector services in four years, says NCDMB

•Sylva optimistic about investments inflow

Ejiofor Alike in Lagos, Emmanuel Addeh in Abuja and Olusegun Samuel in Yenagoa

The Nigerian National Petroleum Company (NNPC) Limited yesterday attributed the current global gas crisis to shortage of investments in the oil sector as activists, investors, and climate change advocates continue to mount pressure on banks and oil companies to withdraw funding for fossil fuel related projects.

NNPC said there might be no end in sight to the overheating of the oil market, which could even worsen if the required financing of major oil and gas projects continued to lag.

Speaking in Yenagoa during the 10th Practical Nigerian Content (PNC) Conference organised by Nigerian Content Development and Monitoring Board (NCDMB), the Group Executive Director, Upstream, NNPC, Adokiye Tombomieye, urged Nigeria to look inwards for financing of major projects.

The event was attended by several industry and non-sector players, including the governor of Bayelsa State, Douye Diri; Minister of State for Petroleum Resources, Timipre Sylva, who was represented by the Director, Human Resources Management, Dr. Famous Eseduwo; and the NCDMB Executive Secretary, Simbi Wabote.

Others at the event included Country Chair, Shell Nigeria, Osagie Okunbor; Group Managing Director, NNPC, Mele Kyari, who attended virtually; Chief Executive Officer, Nigerian Upstream Regulatory Petroleum Agency (NURPC), Mr Gbenga Komolafe; and several top shots in the oil and gas industry.

Tombomieye, who was represented by the Group General Manager, National Petroleum Investment Management Services (NAPIMS) Bala Wunti, said there had been a downward spiral in investment in the oil and gas industry since 2000. But he stressed that with the Petroleum Industry Act (PIA) things would change from 2022.

Tagged, “Driving Nigerian Content in the New Dawn of the Petroleum Industry Act,” the NNPC top official, who spoke during one of the sessions, maintained that there was an on-going trend of upward movement in the industry.

“The reason is not far-fetched,” Tombomieye stated, adding, “We have seen the consequence of uncertainty in the industry. Investment and uncertainty never mix.”

Tombomieye explained, “Whether we go ahead with the energy transition or not we have already created a monster and that monster is that we now have finance activists, investment activists that have come into the space to create problems for energy investment.

“Energy investment is being attacked and will continue to be attacked in the fossil fuels industry. Investment capital is now very discriminatory against fossil fuels, but not only that, it has become more and more impatient.

“Everybody wants to invest today and recoup the money tomorrow. Nobody wants to invest that money for 10 years, but I need to let you know that the upstream space is not a day’s job. You will invest today and wait for 10 years. These issues have created an impediment to investment.”

According to the GED, the crunch on finance and investment has not created the new energy crisis across the globe, but has seen the prices of gas skyrocketing in the last few months.

However, he stated that the situation had also brought about significant opportunities for Nigeria, which would now have to look elsewhere to finance major projects.

He said, “If I’m not getting money from JP Morgan and I’m not getting money from Blackwell, if Shell is running away, where else will the money come from. And this is a challenge for the service contractors. We do know that there should be active collaborations by the service contractors.”

Tombomieye argued that though many players within the industry liked to cut corners, with the advent of the PIA, that would soon stop. He said major investments would start rolling in by 2022 as pending disputes are being resolved.

During the event, the NCDMB Executive Secretary, Wabote, formally signed a deal with Amal Technologies for the setting up a state-of-the-art factory to produce hardware, embedded systems, and other technological devices in Nigeria. He said the plant could produce as much as two million electricity meters.

Wabote stated, “The plant will produce smart gas/smoke detector alarm devices that monitor and detect smoke and all types of gas leakages (especially LPG), call the user’s mobile phone if the intensity of the gas is getting high, and automatically shut off the valve of the gas cylinder using Internet of Things and Artificial Intelligence technology.”

On the board’s 10-year roadmap, Wabote said while there was a total of 96 initiatives, 56 were on track, 24 were on-going, 16 initiatives were not yet due, while overall, 75 per cent of the roadmap was on-track as at November 2021.

According to Wabote, “Five areas monitored for evaluation of Nigerian content are engineering, procurement, fabrication, project management, and services. Based on projects covered by our monitoring and evaluation directorate, a total of $20.4 billion was spent on these five categories between 2016 and 2020.

“The top three industries’ spend are $8.07 billion on fabrication, representing 39 per cent of spend; $4.74billion on engineering services, representing 23 per cent of spending, and $5.67 billion on procurement of manufactured materials representing 28 per cent of spend.

“The low spends were $1.18 billion on services, representing six per cent of spend, and $746 million on project management, representing four per cent of spend.”

In his remarks, Sylva called for closer collaboration among the various agencies of the ministry with implementation of the PIA about to come into force. He said the conference had continued to grow every year, adding that the NCDMB had consistently broken new grounds with the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.

He enjoined the board to continue its upward trajectory and stay focused on the implementation of the Nigerian Content 10-Year Strategic Roadmap to grow Nigerian content to the targeted level of 70 per cent by 2027.

Wabote said, “Government expects that with the PIA now in place and supported by the enabling structures to ease doing business, new Final Investment Decisions (FIDs) should begin to happen rapidly in the Nigerian oil and gas industry.

“With over $42 billion worth of investment agreement signed by various Nigerian entities at the just concluded Intra African Trade Fair (IATF) in South Africa, there is strong optimism that so many new projects would soon commence in the Nigerian oil and gas industry.”

Komolafe, in his comments read by the Senior Technical Adviser NUPRC, Mr. Abel Nsa, said over a decade since the enactment of the NOGICD Act, so much had been achieved by the NCDMB over the years in the development of indigenous capacity. He said this had helped in stimulating the local economy and brought about the resurgence of new businesses, creation of jobs for the youth and unemployed, in addition to the retention of wealth in the country.

Shell Chair in Nigeria said the company in 2016 spent over N2 billion in the construction, upgrade and provision of equipment for the Nigerian Institute of Welding (NIW) in a bid to enhance welding technology in-country.

“With this investment, the institute is now able to perform destructive and non-destructive testing of materials in Nigeria,” he said.

Diri urged the stakeholders to create “local contentment”, to foster a conducive environment for the operations of the oil companies.

Shell MD, Okunbor Urges Nigeria to Optimise Energy Resources

Okunbor said Nigeria should adopt a two-pronged strategy for its energy transition programme in response to global calls for reduction in the exploitation of fossil fuels and production of Green House Gases (GHG).

Okunbor spoke while delivering the 51st Founders’ Day Lecture of the University of Benin, titled, “The Global Energy Transition and The Imperatives for Nigeria.” He called for an urgent optimisation of Nigeria’s energy resources for speedy economic and industrial development of the country.

He said, “Nigeria has gas in abundance – around 202 trillion cubic feet of proven gas reserves and about 600 trillion cubic feet of unproven reserves. Harnessing these vast gas resources, and on time too, is key in the next decade of Nigeria’s existence.”

According to him, the second approach for Nigeria’s successful energy transition would be an intentional growth of the off-grid power and renewables industry taking advantage of foreign financial support and technology transfer.

Okunbor stated, “The on-going energy transition is here with us. As with other transitions, it is a journey that will involve multiple approaches, collective action and undoubtedly present new challenges and opportunities.

“Nigeria is well positioned to ride the wave of the current energy transition with its abundance of natural fossil fuels and renewable solar energy. We need to move with a greater sense of urgency and a clear sense of direction.”

Okunbor, who is also the Managing Director of The Shell Petroleum Development Company of Nigeria Limited (SPDC), said, “Nigeria, as a country with abundant natural fossil fuel resources, cannot afford for international and multilateral agencies to stop funding the development of fossil fuels, particularly gas projects.

“The transition is underway,” Okunbor said, “but it will move at different paces and produce different outcomes in different countries, depending on local factors. Society, as a whole, faces a dual challenge to transition to a low-carbon energy future, dealing with how to manage the risk of climate change, while also extending the benefits of energy to everyone on the planet. This is a challenge that requires changes in the way energy is produced, used and made accessible to people.”

Despite the efforts at decarbonisation, Okunbor said oil and gas would remain in the energy mix for some decades to come. He said, “This is partly a consequence of the time needed for renewables to reach the necessary level of materiality. In part, it is also a consequence of the lack of substitution options in some parts of the economy. But the world will need to meet its energy needs at the same time as it tackles climate change.”

He noted that to make the federal government’s ”Decade of Gas” agenda a success, the country would need to unlock the domestic gas-to-power value chain; accelerate infrastructure development; drive gas-based industrialisation; and deepen domestic liquefied petroleum gas penetration.

Source: https://www.thisdaylive.com/index.php/2021/12/01/nnpc-global-attack-on-fossil-fuel-investment-will-continue-to-worsen-energy-crisis/

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