Austin Avuru, Chairman AA Holdings
…World needs energy resources to survive
…Climate change is an existential threat, but in Africa, the biggest threat is institutional poverty, hunger, disease and conflicts.
-Felix Douglas
Addressing participants and audience at the Sub Saharan Africa International Petroleum Exhibition and Conference (SAIPEC), during his keynote in a panel session, Chairman of AA Holdings, Austin Avuru gave his opinion that in terms of gas, Africa has literally 600 trillion cubic feet of (TCF) of gas.
Meanwhile, Avuru said Nigeria produce a little over 24 billion cubic feet (BCF) of gas a day and the country consumes about half of 13.5 BCF of gas a day. For oil, Nigeria consumes about 118 billion barrels of oil reserves across Africa. “We produce 6.1 million barrels a day and consumes 4 millions barrels a day.”
Concerning the refining capacity, 23 countries have a refining capacity of 4.8 million barrels of oil a day. Five of these twenty-three countries account for 4million barrels refining capacity.
Africa Resources
Giving his analysis, Avuru explained that the countries are: Algeria, Egypt, Libya, South Africa and Nigeria. “I am taking the liberty of ascribing refining capacity of 1.1 million to Nigeria owing to Dangote 650,000 refinery while NNPC is fixing its refinery including four to five modular refineries of 10,000. If they are added up, Nigeria will be having about 1.1 million barrels per day (bpd).”
The actual performance is rising from about 20,000 bpd and heading towards at least 600,000 bpd in the next three months and when NNPC finishes its job, it will end by 1.1 million by the end of the year.
Ascribing 1.1 million bpd to Nigeria and in Africa, the total refinery capacity is about 4.83 million bpd. What this shows is that when Nigeria attains its full refining capacity added to 800, 000 plus barrels, South Africa, about 1.0 3 million bpd and that of Egypt 600,000 with Algeria, 380,000 out of Libya, today’s consumption of 4 million bpd across Africa, the continent will be self sufficient in terms of refining capacity. This is Africa resources and what it has produce, consume and process.
According to Avuru, the world needs energy resources to survive. “None of it is dirty. We want it to be clean as possible. The name of the game is geopolitics what does this mean for Africa? The name of the game is energy security.”
Energy plays a critical role in driving economic growth, therefore energy security and transition cannot in any continent like Africa, compromise supply reliability.
“Climate change is an existential threat, but in Africa, the biggest threat is institutional poverty, hunger, disease and conflicts.” All these signs and symbols of poverty constitute bigger existential threats to us in Africa than climate change.
“We must keep what we have and optimize the value.”
Africa should ramp up its oil and gas production and drive down its costs to be efficient and competitive.
Nigeria Energy Resources
Avuru revealed that Nigeria has sufficient refining capacity, the country has to double its internal consumption. “We have to use our oil and gas resources to optimize our industrial manufacturing capacity and intensify gas to power projects.”
The uses of gas are enormous. Gas to methanol, fertilizer and petrochemical which should be optimized.
On gas resources, Nigeria production and consumption will take six to seven years to exhaust. This is by using its production.
“If we were to use our internal consumption alone, it will take the country 124 years that tells us we have a huge resources for production and internal consumption capacity. If we have to optimize the value of the gas resources we have as part of our transition agenda.”
Reserve production ratio for oil is 55 years based on what is produced and consumed which will take the country 82 years both production and internal consumption.
Road to Transition for Africa and Nigeria
As part of transition agenda, the message is that African countries have to design transition agenda in such a way that it will optimize value of their resources over a given time, while pursuing transition. The optimum revenues from optimizing resources is to drive renewables to expansion.
In Nigeria’s case, it is to drive its production to 3 million bpd by 2032 and start thinking beyond 2035 to 2060 promise made. It will no longer produce crude oil by 2060 because it has designed program to exhaust its resources and optimize revenues over this period of time.
“We ought to have driven our gas production domestic and export of 20 BCF a day going forward. Design our own agenda for energy transition that takes into account domestic energy security.”
Looking at the current situation, to drive its economy, Africa should have transition agenda without imposition. “Right now, it is being imposed on the continent.” It should be producing over 4.6million bpd with 20 BCF of gas. Although the continent don’t have the resources yet.
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