When the late Secretary General of the Organisation of Petroleum Exporting Countries, Muhammad Barkindo arrived at the Nigeria Oil and Gas Conference on Tuesday at about 12 noon, no one had any inkling that that would be the last time many of them will see him alive.
He was ushered into the hall looking very lively and had smiles all over him throughout the event.
The eloquence in which he delivered his speech at the event made one of the participants of the conference to request that he be given another standing ovation.
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He came into the conference venue for the opening session accompanied by the Minister of State for Petroleum, Timipre Sylva, the Group Managing Director of the Nigerian National Petroluem Company Ltd, Mele Kyari, the NNPC Board Chairman Margary Okadigbo and other top dignitaries at the event.
He told the gathering how excited he was to be back home to attend the event after the lockdown that was induced by the COVID-19 pandemic.
He said, “It is very refreshing, indeed a great pleasure to be back home and to join the NOG in person for the first time since the outset of the COVID-19 pandemic.
“Sharing this important platform with such a distinguished line-up of speakers, and seeing so many old friends, fellow comrades and familiar faces, is a special privilege.
“We owe a debt of gratitude to the organizers of NOG, Odiri Umusu of DMG and the Nigerian National Petroleum Company NNPC LTD, along with all those who have worked so hard to make the NOG Conference and Exhibition one of the premier events on Nigeria’s energy calendar.
“Allow me to pay tribute to the founders of NOG – Late Dr. Rilwanu Lukman and Dr. Allirio Parra both of blessed memory and congratulate the Organizers for keeping the legacy alive.”
He then went on to talk about the milestones which the Nigerian petroleum industry have achieved since the last one year.
Barkindo said, “One year ago this month, the Petroleum Industry Bill was adopted by both houses of the 9th National Assembly and signed into Law by President Muhammadu Buhari.
“This was a groundbreaking achievement, culminating many long years of hard work. I am confident that the implementation of the law will help unlock the full potential of our petroleum industry, strengthen its ability to attract long-term investment, as well as support a dynamic and diverse economy. “
Shortly after the recap,the OPEC Boss told the gathering about the funding challenges facing the industry and how much would be required to bridge the investment gap by 2045.
He said that a cumulative investments of $11.8trn would be needed between now and 2045 by Nigeria and other oil and gas producing countries to meet the growth in energy demand.
Barkindo told the gathering that OPEC projects that total primary energy demand will expand by a robust 28 per cent in the period to 2045.
He explained that oil is expected to retain the largest share of the energy mix, accounting for 28 per cent share in 2045, followed by gas at around 24 per cent.
The implication of this, according to him, is that oil and gas together will continue to supply more than half of the world’s energy needs for many decades.
He said, “In 2020, the first year of the pandemic and one of the darkest periods in the history of oil, upstream oil capital expenditure fell by around 30 per cent. This exceeded the colossal 26 per cent annual declines experienced during the severe industry downturn in 2015 and 2016.
“Looking further down the road, OPEC’s most recent World Oil Outlook give us some perspective on what is to come. It shows the global oil sector will need cumulative investments of $11.8trn in the upstream, midstream and downstream through to 2045 to meet expectations for significant growth in energy demand.
“With regard to demand, there is only one direction, and that is up. In fact, OPEC projects that total primary energy demand will expand by a robust 28 per cent in the period to 2045.
“Oil is expected to retain the largest share of the energy mix, accounting for just over a 28 per cent share in 2045, followed by gas at around 24 per cent. In other words, oil and gas together will continue to supply more than half of the world’s energy needs for many decades.
“These hydrocarbons are especially vital to the energy mix in regions like Africa, which will see massive population shifts and economic growth in the coming years. These developments increase the urgency of eradicating energy poverty.”
The OPEC Secretary -General explained further that the oil and gas industry is under siege as a result of the various challenges facing the sector.
He lamented the evolving geopolitical developments in Eastern Europe, the ongoing war in Ukraine, the ongoing COVID19 pandemic and inflationary pressures across the globe have come together in a perfect storm that is causing significant volatility and uncertainty in the commodity markets, more importantly, in the world of energy.
Against this backdrop, Barkindo stated that a number of industrialised countries and multilateral institutions have continued to pursue stringent policies aimed at accelerating the energy transition and fundamentally altering the energy mix.
In addition to these, the OPEC Boss explained further that the industry is still reeling from the enormous investment losses of recent years.
According to him, the industry has also been hit by two major cycles – the severe market downturn in 2015 and 2016, and the even more far-reaching impact of the COVID-19 pandemic.
Barkindo lamented that in OPEC’s 62-year history, spare capacity has never been as low as it is today, adding that this takes into account periods of war, natural disaster and other market shocks.
He told participants at the event that if this trend continues, it could haunt the sector in the future.
He added, “If our National Oil Companies are to continue to innovate and flourish, it is of utmost importance that they have predictable and unfettered access to investment capital.
“Regular investment at adequate levels is the lifeblood of our
industry. It is essential if we are to develop new technologies, strengthen our human capacity and remain leaders in innovation so that we can do our part to meet the world’s growing need for energy, shrink our overall environmental footprint, and expand access to underserved communities.
“Yet our industry is now facing huge challenges along multiple fronts, and these threaten our investment potential now and in the longer term. To put it bluntly the oil and Gas industry is under siege.”
Despite the challenges, the OPEC Boss said the Organisation will continue to support the growth and stability of the global oil market by continually expanding data exchanges, technical capacity and high-level cooperation with many leading oil-consuming countries, producers and institutions.
“Regrettably, we are seeing global energy cooperation becoming more fragmented.
New regional alignments are threatening to reverse years of progress towards creating a more stable and interconnected energy system.
“We cannot afford to allow multilateral energy cooperation and global energy security become collateral damage of geopolitics,” he added.