Oil & Energy
‘Take Advantage Of Energy Transition To Attract Investment’
The ongoing disruptions in the international energy industry present a unique opportunity for the Nigerian oil and gas industry to attract investments and serve as one of the leading hubs to meet global energy needs.
The Executive Secretary, Nigeria Content Development and Monitoring Board (NCDMB), Simbi Kesiye Wabote, stated this at a lecture at the Society of Petroleum Engineers – Oloibiri Lecture Series and Energy Forum (SPE – OLEF) 2022 in Abuja.
Speaking on the theme: “Global Energy Transition: Implications on Future Investments in the Nigerian Oil and Gas Industry”, he stated that the clamour by developed countries to reduce carbon emissions through cutting the utilisation of fossil fuels is because those nations have run out of hydrocarbon reserves.
Wabote outlined his perspectives on global energy transition, its implications on global energy security and investments and the opportunities for the oil and gas industry in Nigeria, pointing out that the outcome of energy transitions has always been the redistribution of the constituents in the energy mix rather than the outright swap of one form of energy for another.
According to him, the rush to move the world away from fossil fuels has resulted in first world countries shifting funding away from the development of hydrocarbons towards renewable energy and energy shortage, causing a decline in the supply of hydrocarbons due to lack of investments, because the pace of the shift to renewable energies is unable to meet world energy demand.
Bearing in mind the technological capability and natural endowments as key drivers to the energy mix, the NCDMB boss observed that divestments have resulted in the emergence of indigenous companies playing major roles in exploration and production activities such that companies like Aiteo, First E&P, Eroton and others have acquired assets and are now responsible for the production of about 15 percent of the nation’s oil and more than 60 percent of domestic gas.
He decried the divestment of the IOCs and their reluctance to make further investment in oil and gas which has resulted in the repatriation of capital out of the country.
He lamented that this has stifled the nation’s economy of the much-needed foreign exchange and funds used as loans to acquire oil and gas assets instead of developing new production assets.
He also hinted that energy shortage has provided a huge opportunity for the Nigerian oil and gas industry by diversifying oil and gas energy hubs even as it works on adding renewables to the global energy mix to ensure energy security.
Wabote canvassed for a balance between the drive for renewables and new investments in fossil fuels, warning that a misalignment in the transition strategy will result in supply and demand disruptions as witnessed in the current situation in Europe.
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Oil & Energy
Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
