Crude Oil Price May Hit $200 If Hydrocarbon Investment Is Not Improved—Wunti

…Says Over $30bn Investment Needed For Gas Transition

The Group General Manager, National Petroleum Investment Management Services, Mr Bala Wunti has said that failure to sustain investments in hydrocarbons will cause a spike in global oil prices to about $200 per barrel and also frustrate growth of economies like Nigeria.

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According to him, the global economy will suffer from the resultant effect as the demand for hydrocarbons will far exceed its supply in the near future.

Wunti said this to woo investors to fund the country’s gas project which will serve as its transition fuel to net zero by 2060.

The NAPIMS boss said on Wednesday at the Nigeria International Energy Summit in Abuja that investors are channeling their funds on renewables, while funding of hydrocarbon investments has become abysmal.

He said global demand according to the International Energy Agency is 98 million barrels, while the world can barely supply 95 million barrels.

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He said, “That means there is a significant supply shortfall and when you have supply shortfalls, the consequences are that the price will go up and gas will continue to grow and therefore, mean that after 2050, hydrocarbons will continue to grow but that’s not the same thing with the supply.

“When you look at the energy mix equation, we think over 50 per cent of the global energy will be met by hydrocarbon oil and gas precisely about 52 per cent.

“But the reality today is there’s no investment. When you look at the trend today according to the IEA, when you look at the net zero carbon emission, you ‘ll see that the demand forecast is that hydrocarbons will still be needed and energy will still be needed.

“We are in a very rare condition. Therefore, the world has two options to replace hydrocarbons or to produce the hydrocarbon and to produce the hydrocarbon, like we said earlier, we need investment and investment capital.”

He explained that the consequence of not investing in hydrocarbons is complicated by the geopolitical dynamics, adding that it is “what we are now seeing today: $115 Brent.”

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He added, “We’ll go to triple digit and potentially up to $200. There’s still an appetite against hydrocarbon capital and we are still impatient.

“The consequence of that is that you will develop a short supply for tomorrow where new suppliers come in and a very difficult and interesting part of the world. Prices are likely to go up maybe tomorrow, it would hit $120.”

According to him, what the country needs to do is to attract investment through local and foreign investors.

“I don’t know how many Nigerian banks can give me a cheque for N200m. Now, let alone $200m. But you know what, I need $30bn today to be able to cover my domestic needs. I don’t think we (local investors) have that capacity.

“What we need to do is basically to leverage upon our resource base. And our resource base is gas. What we’re saying is we have the gas. We are ready, but we need the cash whether DDI or FDI, we need the combination of the two, so we can move on.”

He revealed that the country is adopting an approach that will restore the environment from damages that may result from the exploitation of hydrocarbons.

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