The Nigeria Content Development and Monitoring Board (NCDMB) has identified divestment from hydrocarbons assets and energy shortage as two implications of energy transition with different impacts on the oil and gas industry.
Mr Simbi Wabote, Executive Secretary, NCDMB, said this on Thursday, March 31, 2022, in Abuja at the 2022 Oloibiri Lecture Series and Energy Forum (OLEF).
The forum, with the theme: “Global Energy Transition: Implications on Future Investments in the Nigerian Oil and Gas Industry,” was organised by the Society of Petroleum Engineers (SPE).
Wabote, in his presentation, said the two implications have emerged from such rush to move the world away from fossil fuel.
“First is the divestment case in which European and Western countries are shifting funding away from the development of hydrocarbons towards renewable energy.
“The second implication of energy transition is the energy shortage case in which there is decline in supply of hydrocarbons due to lack of investment while shift to renewable energies is not sufficient to meet global energy demand.
“The energy shortage case was already prominent even before the Russia-Ukraine war,” Wabote said.
He said these two implications have impact on the Nigerian oil and gas industry.
He said the divestment case brought about a bitter-sweet experience for countries like Nigeria.
He noted that the positive part of the divestment as the active participation of local companies in upstream sector which resulted in the emergence of indigenous companies playing a major role in exploration and production activities.
“Such companies like Seplast Energy, Eroton Exploration and Production and First E and P among others have acquired assets and now responsible for producing about 15 per cent of Nigeria’s oil and gas requirement and 60 per cent of domestic gas.
“On the other hand, the bitter part of the divestment is the International Oil Companies (IOCs) divestment and reluctant to make further investment in the oil and gas.
“These, have resulted to local repatriation, stifling of local economy of needed foreign exchange and reduced investment in oil and gas related projects,” he said.
According to him, the energy shortage case is evidently becoming new global reality and provides huge opportunity for the industry.
The NCDMB boss emphasised on the need to strike a balance between the drive for renewables and stoppage of new investments in fossil fuels.
“As misalignment in the transition strategy will result in supply and demand disruptions,” he advised.
The forum is being held annually in commemoration of the very first commercial well drilled in Nigeria at Oloibiri, Bayelsa State, in 1956.
By Emmanuella Anokam
