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The Minister of State for Petroleum Resources (Oil), Sen. Dr. Heineken Lokpobiri, has said Nigeria needs to adapt its oil and gas strategy to ensure long-term sustainability and competitiveness.
In his address at the Annual Conference of the Nigerian Institution of Petroleum Engineers (NIPetE), Lokpobiri stressed that it is about time the country “revitalizes its entire upstream, midstream and downstream sector through infrastructure modernisation, security enhancement, regulatory streamlining, investment attraction, technology adoption and activating partnerships that transcend borders and ideologies by balancing our economic dependence on oil and gas resources with the need for sustainability.”
Represented by Engr Kamoru Busari, Director Upstream Ministry of Petroleum Resources, the minister noted that with oil and gas continuing to play an integral role in the global energy mix there is need for massive investment in the sector.
“With oil alone retaining the largest share at above 29 per cent as world demand to an estimated 120 million barrels per day by that time, with a potential for it to be higher. There is need for significant investment in the sector to meet the rapid and robust growth in energy consumption in the years to come
“Based on OPEC’s research, cumulative oil-related investment requirements from now until 2050 will amount to approximately $17 trillion or around $630 billion on average per year. Securing this vital funding is essential to maintaining security of supply and avoiding unwanted volatility.
Lokpobiri noted that Sustainable Solutions for Nigeria’s Petroleum Industry in the era of Transition is highly critical for the future developments of the country’s oil and gas industry noting that it must be with a comprehensive approach that balances economic growth, energy security, and environmental sustainability.
“The Future of the global Oil and Gas Industry and by extension Nigeria’s Petroleum industry remains bright, as global energy demand will rise by an estimated 24 per cent by 2050 according to OPEC 2024 World Oil Outlook (WOO). This demand will be fueled by a world economy that is expected to double in size, growing from $165 trillion in 2023 to $358 trillion in 2050.
“OPEC forecasts a rapidly expanding world population that will surpass more than 9.5 billion people by 2050 from a level of eight billion today, with most growth driven by a substantial geographical surge in non-OECD developing countries. Urbanisation alone will account for over half a billion people moving to cities around the world by 2030.
“In bridging the projected global estimated demand growth, the upstream regulator NUPRC recently launched the additional 1 million barrels per day (mb/d) initiative to ramp up the country’s Oil production. This initiative is a fair target considering our national technical production potential of over 2.26 million barrels per day (mb/d).
“I challenge industry players to tell the Government what we can do to add 2 million barrels per day (mb/d) to the existing production within the next 2 years,” the minister further said.
Listing the reforms in the sector to include the modernization of infrastructural system to enhance production; adoption of Public-Private Partnerships (PPPs) model for the value addition of our Crude oil in the Midstream and Downstream segments of the Oil and Gas sector; tax exemption on refinery equipment’s importation; and Improved refining and processing facilities will elevate product quality, allowing companies to produce higher-value products that meet market demands, attracting more customers and boosting revenue amongst several others, the minister said the reforms will help grow our reserves, ensure environmental sustainability, increase Nigeria’s daily production and create additional opportunities for new investments and higher revenue for both government and investors.
“Our strategic thrust is to ensure our industry remains competitive despite the global decarbonization agenda by focusing on our cost of production. Our plans and desires are to ensure a unit cost of single digits to maximise our abundant reserves for the wealth of our nation,” he added.
In her presentation Prof. Yinka Omorogbe, S.A.N of the Centre for Petroleum Energy Economics and Law, University of Ibadan, noted that the advent of the Petroleum Industry Act (PIA) has brought some stability to the oil and gas industry.
According to Prof Omorogbe, without a doubt, the existence of these empowered regulators has provided much needed stability and predictability, which predispose the industry to growth
“Since 2021 the Nigerian petroleum industry has had a new legal regime with the advent of the Petroleum Industry Act which has, amongst other significant achievement separated the commercial, regulatory and policy roles of the industry; provided for the emergence of clear regulatory frameworks for the upstream and midstream/downstream sectors; and created a commercialized national petroleum company (NNPCL) and 2 regulators for the upstream (NUPRC) and the downstream (NMDPRA
“The 2021 licensing round awarded approximately 57 marginal fields across Nigeria. This was a considerable increase compared to past rounds and represented the largest award of marginal fields to date),” she said.
