At NAPE Conference, Kyari Makes Case For Flexible Energy Transitioning Approach For Nigeria, Other Countries

As the debate for countries to adopt cleaner sources of energy, the Group Chief Executive Officer of the Nigerian National Petroleum Company Ltd, Mallam Mele Kyari, has advocated that hydrocarbon-dependent economies such as Nigeria should be given the freedom to adopt a more gradual and flexible approach to the energy transition.

Kyari said this on Tuesday while presenting a paper at the 40th annual international conference and exhibition of the Nigerian Association of Petroleum Explorationists.

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The NNPC Boss who was represented by the Executive Vice President, Upstream, Engr. Adokiye Tombomieye spoke on the topic, “Global Energy Transition and The Future of the Oil and Gas Industry: Evolving Regulations, Emerging Concepts, and Opportunities.”

The NNPC Boss said that rapid demographic change will continue to drive up demand for energy services across Africa in the coming decades, adding that oil demand in Africa stood at an average of 4.36 million barrels per day in 2022.

Even though Africa has the world’s lowest levels of per capita use of modern Energy, Kyari explained that its demand is set to increase with growth in population and incomes.

As its population and incomes grow, he said that 970 million Africans lack access to clean cooking gas.

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With heightened campaigns on the use of sustainable energy sources and a match into a net-zero world, Kyari told the gathering that the energy mix has become more diverse, with Africa’s current energy mix still dominated by fossil fuel with hydropower making the only meaningful renewable energy contribution.

He said, “It is therefore our firm position that fossil fuel will continue to contribute more than 50 per cent to the energy mix in Africa and possibly the rest of the world.

“However, the most important question for this strategic gathering is around competitiveness of the hydrocarbon sources compared to renewal comparatives in terms of cost, energy contents and sustainability.

“Recent happenings in the Russian-Ukraine crises have seen the resurgence for the need of fossil fuels and in some cases adverse use of high-carbon generating energy sources like coal, this also points to the fact, that energy transition implementation has to be gradual.

“It is therefore imperative for the industry, NAPE and key stakeholders to rededicate ourselves towards scaling above the challenge posed by transition.

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“One way to scale up is by delivering the most advantaged barrels to the world while paying attention to environmental sustainability through huge investments in technology and innovation.

“Nigeria and the rest of resource dependents would require oil to transit out of oil. However, we will remain sensitive to the growing global concerns relating to global warming, climate change, and the increased attention in national and international public discourse generally due to increasing environmental concerns resulting from the heightened concentration of greenhouse gases (GHG), which are associated mostly with fossil fuel combustion.

“This has led to renewed interest in low carbon-intensive and environmentally friendly energy sources.”

He explained that currently, the energy transition is moving very aggressively, and major fund providers for petroleum upstream investment are now activist and anti-fossil.

This, he noted, had made the financing of oil and gas projects more complicated as banks, multilateral lenders, and investors are diverting capital away from fossil fuels to renewable energies.

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He added, “There is a universal acceptance of the need to gradually transit by reducing energy-related CO2 emissions to limit climate change.

“However, there is also a need to recognize that while aggressive energy transition programs are being pursued in developed countries, many emerging countries, especially those with hydrocarbon-dependent economies like Nigeria, require a more gradual and flexible approach to the energy transition mantra.

“Interestingly, as the transition to cleaner energy gains momentum, it is comforting to discover that Africa is especially endowed with abundant sunshine that can support massive development of renewable energy enough to put Africa on the map of energy-sufficient regions of the world.

“However, it is a fact that the efforts to transit energy systems involve changes, not only to energy technologies and prices but also to the broader socio-economic assemblages that are built around energy production and consumption. This includes training human capacity to design and make technologies, develop and manage routines, and use the energy efficiently.”

The NNPC Boss stated further that stakeholders in the oil and gas industry must recognize that the new era of automation and artificial intelligence is focused on application of cutting-edge technologies, use of robotic drilling systems for unmanned operations, and deploying cognitive computing in upstream operations.

“We need to urgently take advantage than ever before of the opportunities derived from big data digitalization and emerging new technologies in the course of our operations.

“We know that we cannot do it all alone, so we are broadening collaboration with key stakeholders across the industry and the university as a key step to realizing our vision and growth aspirations.

“To make this a reality; we have to collaborate as professionals, as Senior Business Leaders to make digitalization a priority, drive a culture of innovation and technology, invest in human capital and development programmes, optimize the use of industry data platforms and invest in the Oil and Gas collaborative ecosystem,” he said.

As a country, he said Nigeria’s declaration of the years 2021-2030 as the Decade of Gas is a clear indication of the country’s resolve to drive economic growth with natural gas exploitation while deepening domestic gas utilization to monetize the over 208 tcf of proven gas reserves.

He added that the acceleration of natural gas utilization and implementation of the energy sector reform will not only help in reviving oil and gas production but will serve as a catalyst to foster gas-to-power, industrial development, and expansion of the gas network to Gas Based Industries.

According to him, Nigeria’s energy transition has created significant investment opportunities such as the establishment and expansion of industries related to solar energy, hydrogen, and electric vehicles.

These alternative energy sources, Kyari noted, can be exploited to diversify the nation’s energy mix beyond the current fossil fuel sources and guarantee energy security for the nation.

He said, “The renewable energy sector still has many unexplored potentials and securing the appropriate funds, partnerships, and technology will accelerate large investments in the nation and put it in line with the global decarbonization movement.

“With appropriate regulations in place, like the recently enacted Petroleum Industry Act (PIA 2021) and the anticipated deregulation of the Downstream petroleum sector will also provide an opportunity to incorporate a Renewable Energy funding framework that will transfer real economic benefits in terms of energy access.

“Also, the flare gas (prevention of waste and pollution regulations) of 2018, whose objective is the reduction of the environmental and social impact caused by the flaring of natural gas, protection of the environment, creation of social and economic benefits n from gas flare capture.

“As more businesses enter the market and become more lucrative as a result of government initiatives and rising demand, they will grow and increase employment opportunities that will improve the living standards of the vast majority of the Nigerian population.

“The Nigerian electricity sector would see an increase in investments due to the sizeable market and growing demand for Renewable Energy technologies.”

Before the window closes on fossil fuel, Kyari said Nigeria must utilize its huge oil and gas resources to boost the economy and promote sustainable growth and social development for the present and future generations of Nigerians.

The prospects, he noted, do not look bright in the next 30 or more years from now.

As a National Energy Company, he said the NNPC Limited is repositioned to operate commercially, deliver greater value and enable the growth of Nigeria’s evolving non-oil economy, including Agriculture, Solid Minerals, financial sector, technology, and manufacturing.

According to him, partnering for sustainable development will be the key to opening the doors of opportunities. 

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