The Federal Government has said absence of long-term investment in the oil and gas sector and insecurity should be blamed for Nigeria’s current low crude oil production.
A statement by the Senior Adviser, Media and Communications, Horatius Egua, quoted the Minister of State, Petroleum Resources, Timipre Sylva, as having made the comment while speaking at a ministerial plenary, at the ongoing Ceraweek, in Houston, Texas.
Specifically, Sylva stated that this development was responsible for the inability of Nigeria to meet the Organisation of Petroleum Exporting Countries (OPEC) quota in recent times.
Although Nigeria’s OPEC production quota is pegged at 1.8 million bpd, in the last few years, the country has struggled between 1.3 and 1.4 million bpd.
Sylva insisted that the speed with which International Oil Companies (IOCs) and other investors were withdrawing investments in hydrocarbon exploitation had further contributed significantly to Nigeria’s underperformance.
“The rate at which investments was taken away was too fast. Lack of investment in the oil and gas sector contributed to Nigeria’s inability to meet OPEC quota. We are not able to get the needed investments to develop the sector and that affected us,” he stated.
He also cited security challenges as another major factor that contributed to the lack of significant growth of the sector in the country and added that the drive towards renewable energy by climate enthusiasts had discouraged funding for the sector.
Sylva, however, called for a change of attitude, stressing that in decades to come hydrocarbon will continue to play a central role in meeting the energy needs of the world.
The Minister said although Nigeria was in full support of the energy transition, the country and the African continent should be allowed to develop at its own pace to be able to meet the energy needs of the over 600 million people who have no access to any form of power in Africa.
“There are about 600 million people in Africa without access to power and of that number the majority live in Nigeria. And of the over 900 million people without access to power in the world, the majority live in Africa.
“So how do we provide access to power for these people if you say we should not produce gas? We believe that gas is the way to go.
“We believe that gas is the way forward and the one access to power. For the energy transition programme to be taken seriously we need to have an inclusive energy transition programme,” he argued.
According to him, while Africa believes in the energy transition, it has its peculiar problems.
“We are saying that our energy transition should be focused on gas to bridge the energy gap. This is what we have been saying. We need a just and equitable energy transition programme,” Sylva further stated.
According to him, Nigeria was also not in any way against the energy transition programme, but urged promoters of renewable energy as the only path to energy transition to give the poorer countries of the world the opportunity to achieve energy sufficiency before doing away with fossil fuel.
“As Africans we are saying that we must be allowed to transit through gas. We cannot achieve one energy base load through renewable alone. The rest of the world must listen to us. We are happy that our point of view is being taken,” he stressed.
Rising Costs Delays Clean Hydrogen Dreams
Despite increasing interest, green hydrogen production is hampered by high costs and a lack of adequate policy and financial backing.
Recent projects, such as the green hydrogen corridor between Spain and the Netherlands, demonstrate the global push for hydrogen dominance.
The IEA report emphasizes the urgent need for government support and R&D investments to reduce costs and drive the hydrogen market.
There is currently not enough funding and support for hydrogen projects to roll it out on the scale they require to achieve the net-zero scenario by 2050, according to several energy experts.
The widespread rollout of clean hydrogen projects has been restricted due to the high costs involved with producing the clean energy source, which is much more expensive to make than dirtier forms of hydrogen derived from fossil fuels.
In addition, while companies worldwide are showing increasing interest in green hydrogen, many are failing to get the government backing required to commence operations.
Green hydrogen is being viewed as increasingly critical to the global green transition as it is a versatile energy carrier that can be used in a range of applications from heating to transportation fuel.
It provides an alternative to natural gas and fossil fuel-derived fuels and can also be used to power cars and other forms of transport instead of electric batteries.The fuel is produced by using renewable energy sources to power electrolysis.
There has been increasing interest in green hydrogen in recent years, with various regions of the world competing to gain sectoral dominance – from the Middle East to Europe.
Last year, the Spanish energy firm Compañía Española de Petróleos (Cepsa) partnered with the Port of Rotterdam to establish “the first green hydrogen corridor between southern and northern Europe”.
The aim is to develop a green hydrogen supply chain between two of Europe’s main ports – the Port of Algeciras in southern Spain and the Dutch Port of Rotterdam.
Meanwhile, several energy companies are investing in developing green hydrogen projects in some of the world’s emerging economies to drive down costs.
However, this month, a report from the International Energy Agency (IEA) suggested that rising costs and lagging policy support from governments are limiting clean hydrogen’s potential.
There have been several announcements about the launch of green hydrogen projects around the globe over the last couple of years, but the report found that many are being significantly delayed due to a lack of policy government support.
The Executive Director of the IEA, Fatih Birol, said the world had seen “incredible momentum” behind low-emission hydrogen projects in recent years “but a challenging economic environment will now test the resolve of hydrogen developers and policymakers to follow through on planned projects”.
Hydrogen produced in a low-carbon process continues to account for less than 1 percent of the world’s total hydrogen production. This is perhaps surprising given the momentum in green hydrogen projects in recent years and the media attention given to the energy source.
In addition, green hydrogen has been identified by the IEA and several other energy organisations as one of the most promising fuels for reducing emissions in hard-to-decarbonise industries, such as steel and chemicals.
The report found that the annual production of low-carbon hydrogen, including that derived from using captured CO2 if all projects are realised could total 38 million tonnes by 2030.
The pipeline includes 27 million tonnes from electrolysis and 10 million tonnes from carbon capture. However, this seems increasingly unlikely as a final investment decision has been made for just 4 percent of the projects.
Projects have been further jeopardised by high energy prices, rising inflation and global supply chain disruptions owing to both the Covid pandemic and the Russian invasion of Ukraine.
By: Felicity Bradstock
Bradstock writes for oilprice.com
Strike: NUPENG To Shut Down Fuel Supply Operations
Amidst growing tension over the indefinite strike order billed to commence on Tuesday, October 3, by the organised labour, the leadership of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has threatened to shutdown its fuel supply operation.
The union described as very disturbing and unfortunate the Federal Government of Nigeria and other tiers of government’s insensitivity to the excruciating and debilitating socio/economic pains faced by citizens as a result of harsh and sudden economic policies taken by the current administration.
In a mobilization letter jointly signed by the President, NUPENG, William Akporeha, and General Secretary, Afolabi Olawale, the leadership of the oil workers who expressed regret over the impact a 24-hour industrial action by the organized labour on businesses and socio/economic lives of the nation, however, said the government’s actions and inactions are inextricably forcing the organized labour to take this “very hard and painful route”.
“Consequent upon the joint resolution of the National Executive Council of the Nigeria Labour Congress and Trade Union Congress as the outcome of the joint National Executive Council meeting of the two Labour Federation, held on 25th September, 2O23, we wish to inform all our members in the formal and informal sectors of the Nigeria oil and gas industry and alert the general public that the rank and file of members of our union are hereby directed to commence full mobilization and ensure an unwavering compliance with the directive of the two labour centres to all affiliate unions to embark on a nationwide industrial action from midnight of 3rd October, 2023.
“The leadership of NUPENG described as worrisome the apparent lack of regards and respect to the cries and yearnings of the organised labour, civil society organisations and the general public by this administration.
“lt appears the administration is arrogantly taking the goodwill and the tolerance level of the workers and Nigerians in general for granted.
“This arrogance is demonstrated clearly and loudly by the ways and manners meetings with organized labour and outcomes of such meetings are taken with levity and disrespect.
“Beyond any reasonable doubts, the government has demonstrated high insensitivity, lack of respect and regards to organized labour and the Nigerian masses.
“Therefore, it is in the light of the above that NUPENG as a responsive and responsible affiliate union of the Nigeria Labour Congress (NLC), will fully comply with the resolution of the joint NEC meeting and we hereby direct the leaders in the four (4) Zonal Councils of our great union to mobilize all our members in the formal and informal sectors to shut down services effective 3rd October, 2023.
“All NUPENG members, including the Petroleum Tanker Drivers (PTD), Petrol Stations Workers (PSW), Liquefied Petroleum Gas Retailers (LPGAR) and all other allied workers in the value chain of petroleum products distribution must comply with this directive from midnight of Tuesday, 3rd October 2023”, NUPENG said.
NUPENG further directed all its branches and units to ensure full compliance by setting up Compliance and Monitoring Teams in all operational locations.
OB3 Gas Pipeline Project: Ekpo Tasks Contractors On December Deadline
Minister of State, Petroleum Resources (Gas), Ekperikpe Ekpo, has urged contractors handling the Obrikom, Obiafo and Oben (OB3) gas pipeline project to ensure its completion by December this year.
Ekpo stated this during a tour of the 48 × 1.8km gas pipeline project designed to run across the River Niger, conveying gas from the South-South and South-East to the South West and the Ajaokuta, Kano and Kaduna (AKK) Project, among others.
In a statement signed by the spokesperson to the Minister, Louis Ibah, and made available to newsmen, Ekpo stated that the December 2023 deadline would greatly enhance the Federal Government’s aspiration of making gas available to all nooks and crannies of the country as well as addressing some of the challenges associated with the removal of fuel subsidy.
He told the officials of Enikkom and HDD Thailand, the joint venture contractors handling the project, that “Nigerians are waiting for this project. Mr. President (His Excellency, Bola Tinubu), is passionate about gasifying Nigeria, and this is also my mission as a minister.
“The withdrawal of fuel subsidy has been causing problems in the country, but if we get this project right the pressure will come down.
“When that is done, it will go a long way in easing doing business in Nigeria and forex will come into the country. So, I implore you all to be intentional, committed and passionate about this project completion deadline”, he stated.
He described the project as a game changer, saying its inauguration would boost the quest to provide enough gas for domestic needs, and commended the contractors and others involved in the project
Earlier in his speech, the NNPCL boss, Mele Kyari, assured that the project would be completed by the end of the year, stating that most of the initial challenges had been identified and surmounted by the contractors.
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