Energy editors upbeat on petroleum industry activities
The Society of Energy Editors, SEE, expects the Nigerian energy sector to witness significant developments in the first quarter of 2025.
This, according to the Society, would be driven by President Bola Tinubu’s proposed N49.7 trillion-naira budget for the year.
The budget is anchored on an increase in base crude oil production to 2.06 million barrels per day, expected to drive down inflation from 34.6% to 15% in 2025.
The SEE, in its “Nigeria Energy Outlook Q1 2025”, said key areas to watch in the energy sector in the first quarter of the year include oil oil exploration and production; domestic crude refining; gas production and liquefied natural gas, LNG, export; power generation and transmission as well as labour relations.
“The government’s target to increase crude oil production is ambitious, but its feasibility hinges on addressing security challenges, particularly in the Niger Delta region.
“Nigeria plans to hold a fresh oil licensing round in 2025 focused primarily on handing out blocks that remained undeveloped, as the country battles to raise crude reserves and production,” it said in the Outlook.
It added that “the Federal Government would have to show the necessary political will and apply a lot of push for this fresh oil licensing round to happen during the year as planned”.
On domestic refining, the Society noted that the commencement of petroleum refining at the Dangote Refinery is expected to reduce fuel imports and ease the burden of petroleum subsidies, but, added that the steady supply of crude oil feedstock from the NNPC Ltd to the Dangote Refinery will be crucial in determining the refinery’s impact on the economy in 2025.
Nigeria spent N9.176 trillion on the importation of the Premium Motor Spirit, PMS, also known as petrol, in nine months, from January to September 2024, rising by 60.87 percent, compared with N5.704 trillion worth of the commodity imported in the same period in 2023.
Focusing on gas production and LNG exports, the SEE projected that Nigeria’s gas sector will grow during the first quarter, driven by the government’s “Decade of Gas” initiative and the country’s ambitions to increase its gas reserves to 210 trillion cubic feet, Tcf, in 2025 and 220 Tcf by 2030.
“Gas production and supply will also increase in response to the Federal Government initiative on gas for automobiles and the need to meet the current shortfalls being experienced by power generating stations and industries,” it also projected.
According to the Society also, gas export through the Nigeria LNG Limited will be steady during the first quarter.
In the area of power generation and transmission, the Society of Energy Editors, said efforts to expand power generation and improve transmission infrastructure will continue, with a focus on increasing the share of renewable energy sources in the energy mix.
It maintained that power transmission and distribution infrastructure remained very weak with the national grid recording 12 incidents of collapse in 2024. Adding that 2025 would witness a repeat owing to poor mitigation measures aimed at tackling inherent weaknesses.
On labour relations, the Society stated that the government would need to address labour concerns in the downstream and upstream petroleum sectors, as well as in the electricity sector, to maintain stability and avoid disruptions.
Listing challenges and opportunities, the Society stated, in the Nigeria Energy Outlook Q1 2025, that the government’s expectations for reducing inflation and improving the exchange rate may be challenging to achieve, given the current market realities.
It asserted that the development of the Niger Delta region, through the activities of the Niger Delta Development Commission, would be crucial in addressing the root causes of insecurity and instability in the region.
“The solid minerals sector offers significant opportunities for revenue growth and job creation, but the government will need to address the challenges of artisanal mining and ensure that the sector is developed in a sustainable and responsible manner.
“Overall, the first quarter of 2025 will be critical in setting the tone for Nigeria’s energy sector in the year ahead. The government’s policies and initiatives will need to be carefully implemented to address the challenges facing the sector and to unlock its full potential,” the Energy Outlook Q1 2025 further stated.
