Engr. Gbenga Komolafe, CCE of NUPRC
-Felix Douglas
…Africa’s energy demand is increasing rapidly due to population growth, urbanisation, and increased economic activity.
…Natural gas as Nigeria destination fuel, with a projection to form a significant part of energy mix for Nigeria by year 2023.
Engr. Gbenga Komolafe, Commission Chief Executive (CCE) of Nigerian Upstream Petroleum Regulatory Commission (NUPRC), spoke during his Goodwill Message and Regulators’ Remark that the 46th Nigeria Annual International Conference & Exhibition (NAICE), is a renowned international event which has over the years been delivering cutting-edge technical content and great networking opportunities.
He said the Society of Petroleum Engineers (SPE) Nigeria Council has again sustained the tempo and demonstrated its unalloyed commitment in the oil industry. According to Komolafe, the theme of the event: Balancing Energy Accessibility, Affordability, and Sustainability in Upstream Oil & Gas: Strategic Options for Africa is apt and timely considering peculiar position of Africa in the fast-evolving global energy landscape.
The NUPRC CCE made it known that commitments from the Paris Agreement of 2015 and subsequent UN Climate Change Conferences, in which Nigeria actively participated, require that the country has to pursue efforts to limit global temperature rise to within 1.5 °C – 2.0 °C of pre-industrial levels. Since the landmark Paris Agreement came into effect, more countries, and entities are establishing carbon neutrality targets, which in turn have sparked competitive low-carbon solutions as well as created many new business opportunities and new markets globally.
However, it has also resulted in the defunding of oil and gas projects. The International Energy Agency’s (IEA’s) latest World Energy Investment report indicates that “investment in clean energy technologies is significantly outpacing spending on fossil fuels.” The report also indicated that the annual global investments in clean energy sources and technology specifically relevant to the energy transition increased by 31 percent from 2021 to 2022, representing the largest annual investment increase since 2010. Governments and energy companies are supporting major R&D and demonstration projects in key areas such as low-emission hydrogen-based energy, lithium-ion and lithium-free batteries for electric vehicles, CCUS and other critical energy technologies.
Whereas the global imperatives for energy transition is clear and justified, the need for Africa’s energy security, economic development and prosperity cannot be overemphasised. There is an inextricable inter-relationship between energy security in Africa, on the one hand, and poverty, conflicts, and insecurity, on the other. Therefore, addressing the key fundamentals of energy access in Africa is key to realising the immense potentials of our great continent for overall global security. Africa’s pervasive potentials are derived from its human, natural and material resources. Thus, like the topic suggests, discussions around global energy dynamics must strike a balance among energy accessibility, affordability, and sustainability.
Komolafe stated further Africa’s energy demand is increasing rapidly due to population growth, urbanisation, and increased economic activity. The international Energy Agency (IEA) estimates that the demand for energy will double by 2040. About 600 million people in Africa lack access to electricity, with most of them living in rural areas. This fact suggests that the continent requires significant uptick in energy supply to bridge the energy gap to achieve the United Nations’ Sustainable Development Goals (SDGs), which aim to eradicate poverty, improve education and promote economic growth while protecting the environment.
“Today, Africa’s energy supply is dominated by fossil fuels. Oil accounts for 50% of the region’s supply, followed by coal, natural gas, and hydroelectricity. Renewable energy accounts for only 5% of the region’s supply, despite the region’s vast potential for wind, solar, and hydro-based power generation.” Harnessing Africa’s vast array of natural and human resources have immense potential to close the energy gap, stimulate economic growth, development, and prosperity, in line with the UN SDGs. Realizing this potential, however, requires the implementation of sound policies, investments, and effective governance to promote sustainable development.
He urged industry professionals in the energy profession, especially in the upstream oil and gas industry in Nigeria that the future envisages for the petroleum industry is one that should assure for the utilization of Nigeria’s endowed natural hydrocarbon resources for shared prosperity, energy accessibility, affordability, sustainability, security as well as energy independence and energy sovereignty which are the cardinal pillars of the Nigeria Energy Transition Plan.
Therefore, it is in line with this stance that government declared natural gas as immediate transition fuel, but unfolding event has equally shown that natural gas is Nigeria destination fuel, with a projection that gas will form a significant part of energy mix for Nigeria by year 2030 and beyond.
As the upstream oil and gas regulator, NUPRC is leading the investment drive for cleaner hydrocarbon development through gas development, optimized gas production, domestic gas utilization, flare elimination and monetization in line with Sections 6(h), 108 and 110 of the Petroleum industry Act (PIA), 2021. Indeed, the Commission is aggressively deepening gas development to ensure that gas plays a cardinal role to lift us from the challenges that confront us in order to drive industrial development in Nigeria as envisioned in the Decade of Gas programme.
With the ongoing efforts, natural gas production is projected to increase from 8.0 bcfd in 2020 to 12.2 bcfd in 2030 driven by major projects such as NLNG Train 7 & Train 8, Nigeria/Morocco pipeline, Ajaokuta-Kaduna-Kano (AKK) Natural Gas Pipeline Project etc.
The Commission is also accelerating other key imperatives to guarantee energy security and sustainability through the instrumentality of the Petroleum Industry Act (PIA) 2021. The imperatives include hydrocarbon value optimisation, green field development, peaceful and harmonious co-existence between operators and host communities cost monitoring and benchmarking and decarbonisation. Against the backdrop of global challenges in oil and gas project financing due to the incessant calls for defunding of fossil project in favour of green projects, the Commission will in the weeks ahead organise its Maiden Nigerian Upstream International Investment and Financial Roadshow (NUIIFR) that will provide opportunity for new asset awardees and upstream industry players to network, exchange ideas and chart strategic pathways for innovative financing structures that will enable investment.
The Commission also recognises that oil and gas operations must be conducted in an environmentally sustainable manner as provided in Sections 6(d)&(e)of the PIA. Hence, the recent creation of the Energy Transition and Carbon Monetisation Department in NUPRC for implementation of robust regulatory framework for decarbonisation of upstream operations and clean mechanisms in field development to improve the environment credentials of oil and gas.
Engr. Komolafe reiterated that Africa has an obligation to itself to provide energy access to its growing population which should come from the responsible use of the abundant natural resources that nature has bequeathed on the continent, including oil and gas.
“For this to be achieved, Africans must take its destiny in its hands and collaborate within themselves while seeking partnership from willing allies who would support their developmental agenda. Nigeria, on her part, has taken a deliberate course to national energy security and sustainability. While committing to Net Zero emissions by 2060, Nigeria will continue to leverage its oil and gas resources to deliver energy to its people and power economic development for shared prosperity.”
The reforms of the oil and gas sector that culminated in the enactment of the PIA is a key enabler, driving the effective and efficient development of the nation’s abundant petroleum resources for the benefit of all stakeholders.
Nonetheless, Nigeria welcomes investors and business communities to take advantage of various investment opportunities to drive a win-win value proposition and “Africa must rise up for Africa.”
Comment here