IOC divestment opens new investment opportunities – Wabote
The ongoing disruptions in the international energy industry present a unique opportunity for the Nigerian oil and gas industry to attract new set of investments and serve as one of the leading production hubs to meet global energy needs.
The Executive Secretary of the Nigeria Content Development and Monitoring Board, (NCDMB) Engr. Simbi Kesiye Wabote maintained in a lecture he delivered at the 2022 Oloibiri Lecture Series and Energy Forum hosted by Society of Petroleum Engineers in Abuja that developed countries clamour to reduce carbon emissions because they have run out of hydrocarbon reserves.
Engr Wabote who spoke on “Global Energy Transition: Implications on Future Investments in the Nigerian Oil and Gas Industry,” 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.
He pointed out that the outcome of energy transition has always been the redistribution of the constituents in the energy mix rather than the outright swap of one form of energy for another.
He said the rush to move the world away from fossil fuels has resulted in first world countries diverting funding from hydrocarbon to renewable energy, energy shortage, and a decline in the supply of hydrocarbons due to lack of investments.
He noted that the current global fuel crisis is caused by rapid shift to renewable energies at a time the new industry is unable to meet world energy demand.
He also argued that technological capability and natural endowments are key drivers to the energy production, pointing out that indigenous firms like Aiteo, First E&P, Eroton and others that acquired assets are now responsible for the production of about 15 percent of the nation’s oil and more than 60 percent of domestic gas.
He noted that divestment of assets by foreign companies has resulted in the emergence of indigenous companies playing major roles in exploration and production activities.
Engr Wabote decried repatriation of capital out of Nigeria by the international oil companies (IOCs) through the divestments and their reluctance to make further investment in the country.
He lamented that this has denied the nation’s economy of the much-needed foreign exchange revenue and depletion of local funds meant for new production developments in acquiring divested brownfield assets.
According to Engr Wabote, the global energy shortage has provided a huge opportunity for the Nigerian oil and gas industry to expand energy hubs and add renewables to the 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 would result in supply and demand disruptions as witnessed in the current situation in Europe.
He further suggested that as the world continues to expand the options of sources of energy available for use, it should be open to welcome new additions without discarding existing ones.
Engr Wabote called on nations to jealously guard their local energy sources to ensure it remains in their energy mix for the benefit of its people. He condemned the indignation against oil and gas and setting of unrealistic deadlines for countries to abandon fossil fuel.