The Group Managing Director of Nigeria’s state-owned oil company, the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has said that there is at least $10 billion worth of investments currently ongoing in the energy sector in a bid to delist Nigeria from one of the most energy impoverished nations in the world.
Kyari, who spoke on the second day of the Atlantic Council Global Energy Forum, 2021 on the topic “Delivering Energy Access in the Developing World,” noted that although the country aligns with the push for renewables, it is now focused on using its oil and gas resources in developing infrastructure till when the commodities become less relevant in about four decades.
He said Nigeria with significant gas reserves, has approximately $3 billion to $4 billion projects currently going on, some of which have reached advanced stages, in the country’s efforts to rev up production for domestic use and for export.
He said: “We are not a petroleum country in the real sense. It’s agreed that we have the 10th largest reserve of oil and a significant gas reserves. Of course, what everybody recognises is the oil. The reality today is that we have a country in excess of 200 million people. Seventy per cent of this population is well below 30, with a growing middle class and one of the fastest-growing economies in Africa.
“More importantly, for us today, an energy deficient country, over 60 per cent of our country is not electrified, the poverty level is very high, extremely challenging. But so much is going on to see how we can reverse this trend. When you combine all these, you will see that as a country of focus today, many things are happening in the energy sector.
“For instance, we are seeing investment in our energy infrastructure, especially in the area of gas in excess of $10 billion; this is ongoing. There are a number of gas-based projects about $3 billion to $5 billion dollars and some of them are at the Final Investment Decision (FID) stage.”
According to him, Nigeria as a country is currently in transition and not necessarily in energy transition, adding that the country is not oblivious to the changes in the global oil and gas sector.
He explained that Nigeria is at the moment witnessing increased domestic gas demand in the industrial and power sectors, leading to increased production and reduced gas flaring.
Kyari added that the country is also witnessing increasing household access to gas networks and natural gas in the main cities, while there are deliberate plans to expand that access to rural areas.
He said the federal government’s recent plan aimed at deepening domestic gas consumption, led to the advent of Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) and that it was part of the policy to deploy resources in the right places.
According to him, “The best of forecasts have said that in 30 years we will still have at least 100 million bpd of oil consumption.
“So, oil and gas will still remain relevant in the near future, but the transition is real. What countries and nations are doing is to move towards much cleaner fuel and this cleaner fuel is clearly gas and that’s why we as a company are focused on gas resources, making sure to supply the domestic market and create opportunities for export.
“So, what we see as an energy resource-based country is to utilise the available resources of today to create the enabling environment for growth and prosperity in the country and that clearly aligns with the reality on the ground.
“We have significant goodwill and understanding across countries, nations and companies. For instance, we have significant engagement with the United States Department of Energy in the sense that we receive some support in our transition to cleaner fuels so that we can develop our gas infrastructure so that we move away from the liquids to gas ultimately.”
On whether or not Nigeria can survive without oil, especially given the current crisis in the global oil market, Kyari explained that Nigeria is gradually moving away from its dependence on oil.
“What does this mean for a country like ours which depends on oil for cash? Obviously, we have seen how we can transit to something better for our country, so we don’t depend on that today. You may be aware that today, the country’s resources are mostly coming from taxes and those taxes are growing because population and prosperity is growing and we want to get more work done.
“As a country, we are facing the new realities and we are moving towards the use of gas and also we are developing our resources as quickly as possible so that when the real transition comes in 30 to 40 years time, we will be in a position to say this is a developed country that has taken advantage of its resources,” he stated.