Page 5 - AfrOil Week 13 2022
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AfrOil COMMENTARY AfrOil
“Nigeria needs to ramp up crude oil production a $1.2bn deal with a local firm, Seplat Energy, to
on existing discoveries that have not yet mate- hand over its shares in four oil mining licenses
rialised to be able to sustain a secure supply in and natural gas recovery plants. Factors such
future to meet local, regional and international as vandalism of infrastructure, the continued
demand. Lifting of force majeure at the Brass failure to invest in new exploration and politi-
terminal, Bonny NLNG and Okpai power cal instability/civil unrest in oil- and gas-rich
plant comes at the right time. We have to con- regions of Nigeria also continue to disrupt the
tinue paying attention on vandalism, sabotage country’s ability to optimise production and
and theft in oilfields. The close collaboration increase exports.
between the government and Industry could not
be more important now,” stated NJ Ayuk, AEC’s Reforms and improvements
executive chairman. Despite these deficiencies, last year’s recent
enactment of the Petroleum Industry Act (PIA)
Gas capacity is a game-changer for Nigeria’s oil and gas mar-
Meanwhile, on the gas front, Nigeria’s massive ket, as the law is anticipated to increase the
production capacity will place the country entrance of IOCs and investors.
among the top three producers in Africa in The PIA is expected to provide clarity to
2022 and a potential supplier to meet demand market players on issues of taxation, investment
in Europe. Nigeria has an estimated gas reserve and licensing that have previously slowed down
of 209 trillion cubic feet (5.919 trillion cubic deployment.
metres) and will produce 1.78 trillion cubic feet The law is expected to boost investment in
(50.41bn cubic metres) in 2022, up from 1.45 oil and gas upstream activities to improve explo-
trillion feet (41.06 bcm) in 2021. ration, production, infrastructure development
Existing producing projects and the projects and the country’s energy portfolio.
currently under development in Nigeria are The Nigerian government has been taking
expected to ensure a resilient supply through measures to make its oil and gas market more
2025. With this portfolio, Nigeria has an advan- attractive, but so far, the country’s hydrocar-
tage for Europe to look up to the West African bon energy resources remain not fully tapped.
country as a potential supplier. Nigeria has not been able to fully leverage its oil
Additionally, the 4,128-km Trans-Sa- and gas reserves to meet local demand and to As the EU seeks
haran Gas Pipeline (TSGP) planned by the increase exports. Today, 50% of the Nigerian alternative
governments of Nigeria, Niger and Algeria population is living in energy poverty.
will eventually be capable of integrating with supply chains to
trans-Mediterranean pipelines such as Gaz Discussing the issues
Maghreb-Europe (GME), Medgaz and Galsi, AEC’s upcoming annual conference – African reduce reliance
thereby allowing Europe to leverage gas from Energy Week (AEW), which will take place
both West and North Africa to meet demand. October 18-21, 2022, in Cape Town – will on Russian
Once completed, TSGP will transport 30 bcm discuss policy, investment and infrastructure gas, Nigeria
per year of gas, and Nigeria, as a leading pro- requirements for Nigeria to boost its energy pro-
ducer in Africa, can produce a significant share duction to meet local demand whilst expanding could provide a
of that capacity. its energy exports to Europe.
With Europe seeking alternative supply significant share
Better infrastructure chains to reduce reliance on Russian gas, Nigeria
“Nigeria is rich in oil and gas resources but still could provide a significant share of the capac- of the capacity
does not have adequate infrastructure, such as a ity the bloc needs. The European Commission, the bloc needs
functioning refinery. In order to utilise its oil and governments, energy companies and financial
gas resources effectively, Nigeria needs to build institutions can help Nigeria with the funding
more infrastructure locally to process its energy. and technical expertise required to speed up
To be able to build the infrastructure needed, the development of infrastructure for increased
there is a need for direct involvement from a production and energy transportation. AEW
combination of the private and public sector 2022 will hosts discussions around future Nige-
partners,” stated Hendrick Malan, the CEO of ria-Europe partnerships on oil and gas trading.
energy market research firm Frost & Sullivan, in The African Petroleum Producers Organ-
an exclusive interview with the AEC. isation (APPO), a consortium of hydrocar-
Additionally, Nigeria’s current gas fields bon-producing countries, will rally its member
are expected to see production levels decline countries – including Africa’s top oil and gas
sharply as we approach the mid-2020s. At the producers Nigeria, Equatorial Guinea and Alge-
same time, major international oil companies ria – to participate at AEW 2022 and discuss
(IOCs), including ExxonMobil (US), Shell (UK) continental energy market trends, opportunities
and TotalEnergies (France), all of which have and the role its member states can play to ensure
been top producers of oil and gas in Nigeria, are global energy security.
expected to diversify their portfolios from 2022 AEW 2022 will host panel discussions, round
onwards and exit the market. Their exit might tables, presentations and high-level meetings
negatively affect production and reduce the about how Nigeria and APPO member states
ability of the West African country to expand its can improve exports to Europe whilst addressing
energy exports to Europe. energy poverty at a continental level. (Reprinted
Meanwhile, ExxonMobil has already signed courtesy of African Energy Chamber)
Week 13 30•March•2022 www. NEWSBASE .com P5