Increasing global advocacy aimed at halting brand new FIDs in fossil fuels, especially oil and gas, can create serious barriers to new field development as projects worth over $ 150 billion Dollars could be stranded in Nigeria.
Investments in new fossil fuel projects must stop immediately if the world is to limit global warming to 1.5 ° C – Fossil fuel body.
The world’s leading energy body presented its roadmap for achieving the critical goal of combating climate change by achieving zero net greenhouse gas emissions by mid-century in a report first published yesterday.
To those set by the Paris-based IEA Climate milestones include requiring rich countries to have zero emissions from power generation by 2035 and the rest of the world by 2050.
Some of the keys to achieving th According to the IEA, this would be an unprecedented investment in Renewable and clean energy, an end to sales of new internal combustion engine cars by 2035, a quadrupling of the use of solar and wind power by 2030, an unprecedented level au of international cooperation between governments; and the adoption of “no new oil and gas fields approved for development” and “no new coal mines or mine expansion”.
Several countries, including the United States and the European Union, have committed To achieve zero emissions. IEA Executive Director Fatih Birol said the transformation would create millions of new jobs and fuel economic growth around the world.
HOWEVER, elusive legal and regulatory framework, especially the two-decade-old Petroleum Industry Act (PIB) ) has left most of its oil and gas projects on track as the country missed out on foreign direct investment (FDI), valued by the National Assembly at around $ 235 billion.
At one point, this oil giant arrives Nigeria Ltd’s Shell Petroleum Development Company (SPDC) has already attempted to separate its equity from some oil blocks in the Niger Delta. Minister of State for Petroleum Resources, Timipre Sylva, said in Abuja yesterday that the federal government is weighing options for moving the company.
While the minister announced that the country’s oil exploration company, the Nigerian Petroleum Development Company (NPDC ) or local oil companies could take over the ceded assets, he noted that the oil giant is engaged and stressed that it has won It is not in the country’s best interests to watch the company exit the sector in any way Recall that The Guardian reported that international oil companies (IOCs), including ExxonMobil, Chevron, BP, Total, Shell and ConocoPhillips, plan to acquire $ 27.5 billion in assets to sell to invest in new regions, according to research by Rystad Energy.
Many projects that were initiated in the Nigerian oil sector were still years e after their initiation in the planning phase or were bogged down by legal hurdles. Some of the projects include Shell’s Bonga South-West and Aparo, which are expected to add approximately 225,000 barrels per day (bpd); Bonga North (100,000 bpd); Enis Zabazaba-Etan (120,000 bpd); Chevrons nsiko (100,000 bpd); ExxonMobils Bosi (140,000 bpd); Phase 2 satellite field development (80,000 bpd) and Ude (110,000 bpd).
These projects are estimated to cost around $ 100 billion and can increase land production by up to 875,000 bpd and sales by up to 875,000 bpd increase about $ 1.5 billion.
The $ 20 billion brass LNG project in the state of Bayelsa has also sunk into the dark. the $ 9.8 billion Olokola LNG in Ogun; the 5,000 km Nigeria-Morocco offshore gas pipeline, which at current market prices would cost an estimated $ 20 billion.
Although Nigeria has been successful with some FIDs, stakeholders yesterday insisted the country move faster than projected into a revenue crisis if the economy continued to rely solely on the oil and gas sector to function.
Researchers at the IEA had insisted that the world would, even if the current climate promises made by global governments , including Nigeria, would not bring energy-related carbon emissions to zero by 2050 Due to the global commitment to be feasible, the Agency noted that there would be no investment in new fossil fuel supply projects and no further final investment decisions for new ones unabated coal-fired power plants may be made The IEA prognostizi states that gas demand will fall 55 percent to 1.75 trillion cubic meters per day by 2050, while oil demand will fall 75 percent to 24 million barrels per day. However, Sylva believes Nigeria would have an escape through development, underscoring that the country is poised to become a leading gas country by increasing its existing reserve to 6 trillion cubic feet and adding that incentives are already there The PIB includes reducing license fees for gas from 7 percent to around 2.5 percent.
“We are not in the race for the transition from fossil fuels. For Nigeria, we consider gas as a transition fuel or a target fuel, ”said Sylva, adding that the country will expand its transport sector, agriculture and industrial development, especially gas petrochemicals.
The minister who also spoke about the refineries, stating that the current government was not interested in selling a dead refinery, adding that the refineries would be refurbished and turned over to global technocrats involved in refinery management.
According to him, the country would not discuss options for management or sale until the refineries are up and running.
Sylva warned the country had no choice but to subsidize To delete Premium Motor Spirit, which he described as not benefiting the masses, and announced that this was the intervention of the Department of Petroleum (DPR) to assist the Fe deration Accounts Allocation Committee (FAAC) in May.
Vice President Yemi Osinbajo yesterday stressed the need for a just, just and inclusive global energy transition, especially for developing countries. Osinbajo noted that while fossil investment is sustained in wealthier countries, the ban on gas investment in developing countries raises questions, especially as the global community nears the net zero emissions target of 2050.
The Vice President spoke in A keynote address at Columbia University’s 7th Annual Global Energy Summit in New York, organized by the Columbia Center on Global Energy Policy. This is evident from a statement by the Presidency that was published yesterday evening.
This year’s edition, which took place virtually, focused on the design of the current energy system, on the future of energy policy, energy markets, geopolitics , technology and efforts to reduce emissions while tackling climate change.
According to Osinbajo, “the global energy transition must be inclusive, just and just, take into account the different realities of different economies and take different paths to zero by 2050. Nigeria and countries across Africa are committed to a net zero future, especially given their vulnerability to the adverse effects of climate change, and all have committed to their national development contributions under the Paris Agreement, but there is stronger support for that Development and implementation of robust energy transition plans required.
In clear support for a fairer approach, the Vice President said: “An inclusive and just transition will also take into account the principles of shared but differentiated responsibility and leave no one behind, which is anchored in global treaties Sustainable development and climate protection. “
In the Nigerian context, Osinbajo remarked,” It means building sustainability into our economic planning. That is why we have developed a plan for economic sustainability, which our flagship “Solar The Power Naija” program is to electrify five million households and 25 million people and use solar mini-grids and stand-alone systems by 2023. We believe in the potential of off-grid renewable energy to fill the energy deficit in Nigeria and across Africa. “
An energy economist, Prof. Adeola Adenikinju, spoke of the growing advocacy of fossil fuels, saying the country’s ability to expand oil reserves is at risk. He stressed that the impact on the country’s oil and gas production would not be immediate, “but it will have implications for future production and energy markets as prices would fall due to lower demand.”
Environmental lawyers Nnimmo Bassey said: “This should be a good moment for Nigeria. Plan vigorously to withdraw from its dependence on fossil fuels, adding that further investment in new areas may stall.
President the Nigerian Association for Energy Economists (NAEE), Prof. Yinka Omorogbe, stated that the prevailing trend must drive home the urgent need for the country to re-strategize and reverse the current negative development of the oil industry.
“If this does not help us to recognize that our gas usage activities need to be prioritized now and not later, and if this does not let us know, i If we make ourselves more of a global mockery with this and so many other writings on the wall every day when we start the oil reform, then I don’t know what will happen. “She said.
Renowned energy student Prof. Wunmi Iledare noted that it is very difficult to predict whether the IEA has such a large impact on investors in a global sense, adding that Nigeria is an optimal one Strategy needed in response to the energy transition momentum.
Another expert, Madaki Ameh, said it was high time the Nigerian government recognized that the profile of oil and gas as the fuel of the future is steadily declining Will.
He said, “Without funding new projects, oil and gas recovery will decline as other fuels of choice take on a better profile. The signal for Nigeria is an urgent and targeted diversification, as in other oil and gas producing countries such as Saudi Arabia. “