Energy Transition Will Enable Nigeria’s Oil & Gas Sector Attract Capital From Banks, Investors–Engr. Tombomieye

The Group Executive Director, Upstream of the Nigerian National Petroleum Company Ltd, Adokiye Tombomieye, has said that the aggressive move towards a carbon zero emission will boost the ability of Nigerian oil and gas companies to attract funding for their multi-billion-dollar gas projects.

He said this on Tuesday at the 2022 Annual Conference of the Association of Professional Women Engineers (APWEN), held in Abuja.

Advertisement

Tombomieye who is the Patron of APWEN spoke on the theme: “Just Energy Transition Strategy: An Enabler For Sustainable Development in Nigeria.”

Group Executive Director, Upstream of the Nigerian National Petroleum Company Ltd, Adokiye Tombomieye

As the push for energy transition hits oil producers, Nigeria, Africa’s largest oil exporter has declared the years 2021-2030 as the Decade of Gas which is a clear indication of the country’s resolve to drive economic growth with natural gas exploitation.

At the COP26 in Glasgow, Africa leaders argued for a just energy transition as the continent alongside other ‘victims’ have chosen 2060 for carbon zero.

Advertisement

Already, funding for crude projects by banks had depreciated, while big oil companies are diversifying to renewables.

In Nigeria, big oil company like Shell plans to divest around $2.3bn in assets, Eni’s asset divestment is about $5bn and ExxonMobil would offload $15bn in assets

Local oil company, Seplat intends to acquire a subsidiary of ExxonMobil for about $1.3bn, but this has been put on hold by a suit won by the NNPC Ltd.

Group Executive Director, Upstream of the Nigerian National Petroleum Company Ltd, Adokiye Tombomieye

As a hedge, the NNPC Ltd has sealed a Memorandum of Understanding on gas pipeline project with the National Office of Hydrocarbons and Mines of Morocco and the ECOWAS Commission.

Advertisement

The deal is expected to drive the execution of the 7,000km Nigeria-Morocco gas pipeline project.

The NNPC is also planning to tap from the European gas market through its gas projects.

Tombomieye said, “The Energy transition will continue to impact the ability of Nigeria and oil and gas companies to attract capital as banks and investors prioritize Environmental, Social, and Governance factors and are moving away from funding hydrocarbon projects.

Group Executive Director, Upstream of the Nigerian National Petroleum Company Ltd, Adokiye Tombomieye Receiving Awards At APWEN 2022 National Conference in Abuja

“Globally, the transportation sector generates the largest share of greenhouse gas emissions which primarily comes from burning fossil fuels for our cars, trucks, ships, trains, and planes; 90 per cent of the fuel used for transportation is petroleum based, which includes primarily gasoline and diesel.”

According to him, about 60 per cent of the fossil fuel market in Nigeria is driven by the transportation industry and this is a very significant consumption percentage for fossil fuels.

Advertisement

He added that the replacement of Internal Combustion Engine with Electric Vehicles (EVs) will automatically affect the market demand for fossil fuel vehicles.

He said, “With about 60 per cent of your fossil fuel (crude oil) demand impacted, it will significantly and negatively impact crude oil production.

“Unfortunately, for us in Nigeria, we produce and sell crude oil, which is an anti-energy transition. Nigeria is endowed with abundant natural resources.”

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) estimated the country’s Crude Oil reserves at 37.046 billion barrels and Gas reserves at 208.62TCF as of January 31, this year.

Tombomieye said usage of renewables; solar, wind, tidal wave, natural gas remains a very important transition fuel for sustainable development and Nigeria has a healthy balance of gas and oil.

“The good news is that financial Institutions will fund gas projects. Therefore, leveraging upon gas development will be a way for Nigeria to navigate the energy transition mantra.

“Energy transition also comes with the opportunities of carbon credits and because Nigeria produced gas and oil, we can market our carbon which will also be an incentive for us to process funding from Financial Institutions,” he said.

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

He said, “Before the window closes on fossil fuel, Nigeria must utilize its huge Oil and Gas resources to boost our economy and promote sustainable growth and social development for the present and future generations.

“Nigeria must therefore move away from being an energy exporting country to an energy utilization country; by processing and utilizing our crude oil and gas for our domestic energy needs in order to drive industrialization, create jobs, and provide electricity for over 200 million Nigerians. No one will do this for us – things must change.”

Leave a comment

Advertisement