The Nigerian National Petroleum Company (NNPC) Limited started activities for the week with its group managing director (GMD), Mele Kyari, advocating for more investments in the oil and gas sector to effectively tackle the current global energy crises.
Kyari, who made the call while speaking at the 23rd edition of the World Petroleum Congress held in Houston, United States, spoke on the theme: “Building Partnerships”.
He described the choice of the topic as apt because partnership remained an essential component for creating synergy in the delivery of value to various stakeholders and guaranteeing energy security.
“Our industry is faced with a multitude of challenges, one of which is the requirement for a careful balancing of the aspirations of energy transition and energy security.
“This balance directly impacts energy investments and capital attraction for the development of fossil fuels. The lack of investment capital for oil and gas is already creating energy crises around the world.
“Who would have ever thought that the price of natural gas could sell as high as $60 per MMBtu.
“It is important to pinpoint the fact that the energy and economic security of many resource rich countries is heavily dependent on the development of their hydrocarbon resources.
“This is an important source of generating revenue, providing employment and alleviating energy poverty in these countries while ensuring that the world never lacks the energy it requires to function effectively.”
Kyari told participants at the event that the challenges facing the sector was stifling supply sources, adding that this was what was creating a shortage of global energy supply.
He said time had come for all players in the global oil and gas industry to collaborate in creating partnerships for the development of the technologies and funding required to achieve energy transition, energy security and value to shareholders.
The NNPC GMD further explained that the national oil companies as resource owners, needed investment to derive economic value from those resources while investors needed stable markets and regulations to make healthy returns.
He added, “Today, regulation is creating a capex gap, especially to those of NOCs where we see about a 50 percent reduction in investments.
“As technology, innovation, stiff competition for capital and market volatility continues to generate huge waves, the strength in our partnerships, as we transit, will remain our key survival strategy today and in the future.”
Speaking on the Petroleum Industry Act (PIA) 2021, he said through the legislation, Nigeria has renewed its commitment to attracting investments in the oil and gas industry.
“The Act provides the needed improvements in fiscal and governance frameworks, emphasises transparency and accountability as well as provides a level playing field for all players.
“This is indeed a new dawn for investors as well as our National Oil Company, NNPC, that is transiting to a commercially oriented limited liability company,” he added.
Meanwhile, Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Sanusi Barkindo, has said that any talks about oil and gas going into extinction in the coming decades are out of order.
Speaking at the 23rd World Petroleum Congress Plenary Session on “Energy Transition: Scenarios for the Future”, in the United States, Barkindo said that neither science nor statistics support that position.
He said that public discourse around energy, climate and sustainable development continues to be extremely emotive, adding that it was evident in Glasgow, with many voices from the petroleum industry excluded from speaking.
“At times, the narrative around the energy transition has been overtaken by emotional outbursts, with rational discussions based on facts, hard data and science, taking a back seat,” he said.
The secretary general stated that the complexity of the challenge calls for an inclusive approach; not the pursuit of a single ‘one size fits all’ panacea, insisting that to reduce emissions required a delicate balancing act, with all voices heard, and listened to.
He argued that focusing on only one of the issues, while ignoring the others, could lead to unintended consequences, such as market distortions, heightened price volatility and energy shortfalls.
Describing climate change and energy poverty as two sides of the same coin, Barkindo noted that the world needed to ensure energy was affordable for all and a more inclusive transition.
According to him, the world will need more energy in the future, with OPEC’s recently released World Oil Outlook (WOO) 2021 seeing global energy demand expanding by 28 per cent by 2045.
“For oil and gas, there are some who believe that these industries should not be part of the energy future, that they should be consigned to the ‘dustbin of history’, and that the future is one that can be dominated by renewables and electric vehicles.
“It is important to state clearly that the science does not tell us this, and the statistics related to the blight of energy poverty do not tell us this either,” he added.
While admitting that renewables were coming of age, with wind and solar expanding quickly, Barkindo said that even by 2045, it is only estimated to make up around 24 per cent of the global energy mix.
He reiterated that oil and gas combined were forecast to still supply over 50 per cent of the world’s energy needs by 2045, with oil at around 28 per cent and gas at just over 24 percent.
In terms of electric vehicles, the OPEC helmsman stated there was no doubt that they would continue to see expansion in the transportation sector, but that the share of electric vehicles in the total road transportation fleet was projected to expand to only close to 20 per cent in 2045.
He argued that OPEC fully believed that the oil and gas industries can be part of the solution to tackling climate change, and evolving the energy transition.
He listed carbon capture utilisation and storage as well as blue hydrogen and the promotion of the circular carbon economy, to improve overall environmental performance as key to energy sustainability.