Africa Oil and Gas Producers need to Embrace Reality of Energy Transition- Komolafe

Engr. Gbenga Komolafe, CCE NUPRC

…Fossil fuels will continue to be core part of global energy mix beyond 2050

Delivering his goodwill message at the 44th Nigeria Annual International Conference and Exhibition (NAICE), of the Society of Petroleum Engineers (SPE), titled: “Global Transition to Renewable and Sustainable Energy and the Future of Oil and Gas in Africa,” the Commission Chief Executive (CCE), Nigerian Petroleum Upstream Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, commended SPE for bringing cutting-edge technical content and great networking opportunities into the conference.

Komolafe acknowledged that NAICE has over the years been consistent in delivering internationally recognized high quality technical contents; attracting delegates from a broad spectrum of global oil and gas communities including industry professionals and academics involved in the research and developmental activities. “Today, the SPE Nigeria Council has again sustained the tempo and have shown their unalloyed commitment to this commendable pursuit by gathering some of the brightest minds in the petroleum industry at this 2022 edition. The theme of this year’s NAICE, “Global Transition to Renewable and Sustainable Energy and the Future of Upstream Oil and Gas in Africa”, is indeed apt, considering the current trends and realities in our industry.”

He said the commitments from the Paris Agreement of 2015 and the recently concluded 26th Conference of the Parties (COP26) in Glasgow, in which Africa actively participated, places demand on all of us to keep global temperature rise to within 1.5 °C – 2.0 °C of preindustrial levels. The implications of this for upstream oil and gas industry in Africa are far-reaching. “The need to decarbonise our oil and gas production facilities not only requires commitments but entails that we have the right discourse on policy direction to guarantee energy security throughout the journey to our net-zero target. Hence, the SPE”

Nigeria Council through various symposia, conferences, seminars, workshops, industry collaborations and lecture series has continued to blaze the trail in the energy transition discourse. This 2022 edition of NAICE presents another opportunity to make invaluable contributions to this noble discourse.

As the quest for cleaner energy and net-zero carbon footprint garner momentum, the need for oil and gas producers in Africa to embrace the reality of energy transition and take strategic position to leverage on the opportunities presented by the unfolding era has become more pressing. However, recent events around the globe indicate that fossil fuels will continue to be a core part of the global energy mix well into the future, even beyond the 2050 targets for achieving net-zero that has been set by most countries.

The recent increase in the price of energy, mostly occasioned by the conflict between Russia and Ukraine and the ensuing energy disruption have reawakened the call for geopolitical energy security and sustainability. For instance, in the United Kingdom, the North Sea Transition Authority (NSTA) – formerly the Oil and Gas Authority– is envisaging a leasing and licensing round for oil and gas exploitation and future projects.

According to the NUPRC Chief Executive, it is evident that in meeting the growing energy demand in the short and medium term, the upstream oil and gas industry in Africa would need to carry out further exploration and development drilling to optimize reservoir extraction, drill into new targets, and employ technological advances to optimize production yields for appropriate energy mix. “We at the Nigerian Upstream Petroleum Regulatory Commission (the Commission) have steered our focus towards working with all stakeholders to ensure business investments in the oil and gas sector are adequately protected. We are striving to ensure that all bottlenecks associated with regulatory processes are eliminated or minimised, to ensure seamless operations as we gradually roll out the key policy initiatives necessitated by the Petroleum Industry Act (PIA) 2021.”

Komolafe noted that gas is being positioning as Nigeria transition fuel while adopting phasedown approach in energy transition quest geared towards paying greater attention to the development of untapped gas resources. This energy source with low carbon footprint would serve as the transition fuel in meeting energy security as a nation.

Fortunately, several African countries including Nigeria, Algeria, Mozambique, Egypt, Libya, etc. are blessed with huge gas reserves. With a total of over 620 trillion cubic feet of natural gas reserves and 125.3 billion barrels of crude oil, the future of upstream oil and gas in Africa is promising but requires the right legislative framework and a change in policy direction for maximum economic recovery and energy sustenance.

Accordingly, the recently enacted Petroleum Industry Act (PIA), 2021 in Nigeria has generous fiscal provisions aimed towards attracting investment not just for oil development but for harnessing of the rich gas potentials of the nation which is among the highest in the world. As the country drives for investment in cleaner hydrocarbon development, without prejudice to maximum economic recovery strategies for development of oil resources, the Commission empowered by the PIA has placed its focus on four cardinal areas for sustainable gas development and utilization as follows:

  1. Gas reserves growth
  2. Optimized gas production

iii. Domestic gas utilization

  1. Gas flare elimination.

Other countries in Africa expected to adopt suitable anchor points and roadmaps similar to those presented in the foregoing in order to achieve the right energy mix while decarbonizing our oil and gas development.

Komolafe reiterated that energy transition discourse should revolve around the implementation of a fair, equitable and sustainable energy mix that entrenches the principles of inclusiveness and guarantees energy security.

“I believe that, while we deliberate on the global transition to renewable and sustainable energy, the discourse around the future of African upstream oil and gas should be open and unbiased and should consider the following:”

  1. Energy transition discourse must be balanced by the energy needs for developing economies and the rights of fossil fuel rich countries to develop using their naturally endowed resources.
  2. Focus should be on safe disposal and utilisation of CO2 in the harnessing of oil and gas resources and not the intentional defunding of petroleum assets in the guise of energy transition.

iii. The concept of ‘Just Transition’ is necessary as developed economies have utilized fossil fuels in the development of their infrastructure within the last century and would therefore be just and fair for emerging economies like Africa to have similar opportunities in a ‘phase down’ approach.

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