Former Minister of State for Petroleum Resources, Dr Ibe Kachikwu has noted that the divestment of assets by some International Oil Companies (IOCs) is beyond the global push for energy transition.
Kachikwu spoke at a Chief Executive Officer Round Table Session at the ongoing Nigerian International Energy Summit (NIES) in Abuja at the session with the topic: “Strategies for Confronting the Energy Transition.”
Kachikwu noted that the IOCs including Shell and Exxon Mobil have divested some of their Nigeria assets in the past few years citing the need to diversify their portfolios.
The former minister said there was the need for the companies to be engaged in further discussions regarding the move.
He, however, noted that the sale of the assets were beneficial to Nigerian companies and would deepen local participation in the oil and gas space.
Kachikwu said the successful completion of the 2020 marginal Oilfields bid round and the passage of the Petroleum Industry Act were huge milestones for the Federal Government.
He said Nigeria must look at efficient ways to improve oil and gas production and speed up development of production now, especially with the rise in crude oil prices.
Kachikwu emphasised the need to improve domestic refining capacity by rehabilitating the existing refineries and supporting private owned refineries such as the Dangote Refinery being constructed in Ibeju Lekki, Lagos.
He said energy transition was inevitable and Nigeria must prepare for it by focusing on its abundant gas resources.
On the funding constraints for development of oil and gas projects due to the global energy transition, Kachikwu recommended the setting up of a special fund for such purposes.
Also speaking, Malam Mele Kyari, Group Managing Director, Nigerian National Petroleum Company Ltd. said the government would continue to engage the IOCs to ensure that any divestment does not lead to a loss of value to Nigeria.
Kyari said the government had put measures in place to check oil theft, adding that it would not relent until the situation was brought under control.
He said the government had adopted gas as Nigeria’s energy transition fuel and was investing massively in gas infrastructure toward deepening gas utilisation in the country.
Kyari said the projects include the Obiafu-Obrikon-Oben (OB3) and the Ajaokuta-Kaduna-Kano pipelines to deliver gas into the domestic market.
On his part, Mr Leye Falade, the General Manager, Production, Nigeria LNG Ltd. (NLNG), reiterated the company’s commitment to improving domestic gas consumption in Nigeria.
Falade said the NLNG had in 2021 signed Sales and Purchase Agreement with three indigenous power companies to deliver 1.1MTPA of gas for them to supply power to industrial clusters.
