Banks, Investors Now Diverting Capital Away From Fossil Fuels, Says NNPC
By Sulaimon Salau
Financing of oil and gas projects are more complicated now as banks, multilateral lenders, and investors are diverting capital away from fossil fuels to renewable energies, the Group Chief Executive Officer of Nigerian National Petroleum Company Limited (NNPCL), Mallam Mele Kyari has said.
Kyari, who spoke at the 40th annual international conference and exhibitions of Nigerian Association of Petroleum Explorationists (NAPE) in Lagos, urged stakeholders to mobilse resources towards exploiting the renewable energy sources abundant in the country.
He said: “Currently, the Energy transition is moving very aggressively, and major fund providers for petroleum upstream investment are now activists and anti-fossil”.
According to him, there is a need to recognize that while aggressive energy transition programs are being pursued in developed countries, many emerging countries, especially those with hydrocarbon dependent economies like Nigeria, require a more gradual and flexible approach to the energy transition mantra.
Kyari, who was represented by Mr Adokiye Tombomieye, the Executive Vice President (Upstream) of NNPC, said:“Interestingly, as the transition to cleaner energy gains momentum, it is comforting to discover that Africa is especially endowed with abundant sunshine that can support massive development of renewable energy enough to put Africa on the map of energy sufficient regions of the world.
“However, it is a fact that the efforts to transit energy systems involve changes, not only to energy technologies and prices but also to the broader socio-economic assemblages that are built around energy production and consumption. This includes training human capacity to design and make technologies, develop and manage routines, and use the energy efficiently.
“Consequently, we must recognize the new era of automation and artificial intelligence is focused on application of cutting edge technologies: use of robotic drilling systems for unmanned operations, deploying cognitive computing in upstream operations, super specialized sensors for real-time monitoring and maximization of reservoirs yields, use of predictive maintenance to anticipate critical equipment failures, intelligent pipeline technology, prototyping with 3D printing, blockchain in commodity trading, wearables and industrial mobility tools.
“We need to urgently take advantage than ever before of the opportunities derived from big data digitalization and emerging new technologies in the course of our operations. For example, the operation from a single drilling rig can generate lots of data that will change the game in exploration and development if only the data is properly mined using latest technologies and interpreted for decision making and continuous improvement. This can be achieved by bringing all these data into an integrated team based and easily retrievable platform where professionals can seamlessly interact and mature ideas that will yield the desired outcome.
“We know that we cannot do it al alone, so we are broadening collaboration with key stakeholders across the industry and the university as a key step to realizing our vision and growth aspirations.
“To make this a reality; we have to collaborate as professionals, as Senior Business Leaders to make digitalization a priority, drive a culture of innovation and technology, invest in human capital and development programmes, optimize the use of industry data platforms and invest in the Oil and Gas collaborative ecosystem.
Kyari also harped on gas utilization, saying that the government is vigorously pursuing the Decade of Gas agenda.
“As a country, the declaration of the years 2021-2030 as the Decade of Gas is a clear indication of the country’s resolve to drive economic growth with natural gas exploitation while deepening domestic gas utiization to monetize the over 208 tcf of proven gas reserves. The acceleration of natural gas utilization and implementation of our energy sector reform will not only help in reviving oil and gas production but will serve as a catalyst to foster gas-to-power, industrial development, and expansion of the gas network to Gas Based Industries.
“Nigeria’s energy transition creates significant investment opportunities such as the establishment and expansion of industries related to solar energy, hydrogen, and electric vehicles. It is pertinent to acknowledge that Nigeria is well endowed with abundant Renewable Energy (RE), which includes Hydropower, Solar Photovoltaic Technology, Wind, Geotherma, and Biomass.
“These alternative energy sources can be exploited to diversify the nation’s energy mix beyond the current fossil fuel sources and guarantee energy security for the nation.
“The Renewable Energy sector still has many unexplored potentials and securing the appropriate funds, partnerships, and technology will accelerate large investments in the nation and put it in line with the global decarbonization movement.
“With appropriate regulations in place, like the recently enacted Petroleum Industry Act (PIA 2021) and the anticipated deregulation of the downstream petroleum sector will also provide an opportunity to incorporate a Renewable Energy funding framework that will transfer real economic benefits in terms of energy access.
“Also, the flare gas (prevention of waste and pollution regulations) of 2018, whose objective is the reduction of the environmental and social impact caused by the flaring of natural gas, protection of the environment, creation of social and economic benefits n from gas flare capture.
“As more businesses enter the market and become more lucrative as a result of government initiatives and rising demand, they will grow and increase employment opportunities that will improve the living standards of the vast majority of the Nigerian population. The Nigerian electricity sector would see an increase in investments due to the sizeable market and growing demand for Renewable Energy technologies,” he said.
