Day One: Monday, 26^th February, 2024

Day one of the 2024 Nigerian International Energy Summit (NIES) was characterized by pre-conference activities made up of arrivals, registration and exhibition setup. It also involved a dinner that was hosted in honour of foreign ministers, heads of delegations, diplomats and chief executive officers/presidents and executives of National and international energy companies.

Day One: Monday, 26^th February, 2024

Day one of the 2024 Nigerian International Energy Summit (NIES) was characterized by pre-conference activities made up of arrivals, registration and exhibition setup. It also involved a dinner that was hosted in honour of foreign ministers, heads of delegations, diplomats and chief executive officers/presidents and executives of National and international energy companies.

Day Two: Tuesday, 27^th February, 2024

Opening Welcome Speech by: Amb. Nicholas Agbo Ella, Permanent Secretary, Ministry of Petroleum Resources

Amb. Nicholas Agbo Ella extended a warm welcome to all attendees of the 2024 Nigerian International Energy Summit in Abuja. He expressed his honour, privilege, and sense of duty in welcoming everyone to this significant event.  Amb. Ella reflected on the journey that had led to this milestone in the energy sector, emphasizing the evolution of the Nigerian International Energy Summit into a vital platform for shaping government policies and interventions.  He highlighted the summit’s dedication to fostering progress, innovation, and collaboration within the industry, as evidenced by the outcomes of the past six editions. He underscored the timeliness and importance of this year’s summit theme, “Navigating the new energy world order: security, transition, and finance,” in light of the transformative shift in the global energy landscape.  He expressed sincere gratitude to His Excellency, President Bola Ahmed Tinubu, GCFR, President of the Federal Republic of Nigeria and Commander in Chief of the Armed Forces, for his exemplary leadership in guiding efforts in the energy sector. Amb. Ella acknowledged the instrumental role of the Honourable Minister of State for Petroleum Resources (Petroleum), Senator Heineken Lokpobiri, and Honourable Minister of State Petroleum Resources (Gas), Honourable Ekperikpe Ekpo, in the organization of the summit.

He extended heartfelt appreciation to sponsors, exhibitors, delegates, visitors, and the media for their continued support, emphasizing their invaluable contribution to the success of the Nigerian International Energy Summit. Amb. Ella expressed profound gratitude to all the various committees involved in organizing the summit, recognizing their collaborative effort and attention to detail in making the event a reality year after year.  In conclusion, Amb. Ella welcomed all attendees to the seventh Nigeria International Energy Summit with anticipation for the insights, collaboration, and innovation that had emerged from collective efforts and discussions. He emphasized the importance of navigating the new energy world order together to foster a sustainable and prosperous future for Nigeria and the global economy.  Finally, he extended a warm welcome to foreign visitors and wished them a pleasant stay in Abuja, concluding with a blessing for the Federal Republic of Nigeria.

Opening Remarks by: Mr. Abdulrazaq Isa, Chairman of IPPG and Chief Executive, Waltersmith Group

 Mr. Abdulrazaq Isa expressed extreme delight and honour as he conveyed his remarks on behalf of the Independent Petroleum Producers Group. He began by expressing appreciation to His Excellency, President Bola Ahmed Tinubu, GCFR, for his presence and for the progressive reforms undertaken by his administration. Mr. Isa acknowledged the efforts of the Honourable Ministers of State for Petroleum Resources, Oil, and Gas, Senator Heineken Lokpobiri and Honourable Ekperikpe Ekpo, in executing the President’s programs and convening the summit, which serves as a platform for networking, problem-solving, and collaboration. He highlighted the turbulence and accelerating disruption in today’s energy age while emphasizing the relevance of the summit’s theme, “Navigating the new energy world order: security, transition, and finance.” Mr. Isa discussed the ongoing transformational shift in Nigeria’s energy sector due to IOC divestments, which signal increased indigenous participation and control, leading to empowerment, economic growth, and sustainable resource management. Mr. Isa stressed the importance of energy security and accelerated value capture from Nigeria’s hydrocarbon assets for socioeconomic development, urging expedited conclusion of the divestment processes. He commended the Nigerian Upstream Petroleum Regulatory Commission for its framework and solicited better cooperation from NNPC.

Lastly, Mr. Isa highlighted Nigeria’s economy’s link to petroleum resources and emphasized the goal to accelerate oil and gas production recovery and attract investments for sustained growth. He reiterated IPPG’s commitment to working with the government to address industry challenges.  Mr. Isa concluded by advocating for Nigeria’s leadership in the African energy sector and wished all attendees a productive and engaging time at the summit.

Goodwill Message by: H.E. Haitham Al Ghais, OPEC Secretary General

H.E. Haitham Al Ghais extended his best wishes to all esteemed guests and attendees and congratulated the organizers, sponsors, exhibitors, and everyone associated with the event for its continued success. He expressed his great privilege and honour in meeting with His Excellency, President Bola Ahmed Tinubu of the Federal Republic of Nigeria, highlighting the government’s sponsorship and support for the event and Nigeria’s leadership role in international energy policy and security. H.E. Al Ghais expressed gratitude to the President and the Nigerian government for their support to OPEC. Despite it being his first visit to Abuja since assuming the role of Secretary General, he acknowledged Nigeria’s integral role in OPEC and expressed feeling at home due to the warm Nigerian hospitality. He recognized and thanked His Excellency Senator Heineken Lokpobiri, Minister of State Petroleum Resources (Oil), and Nigeria’s head of delegation to OPEC, Ambassador Gabriel Tanimu Aduda, Governor to OPEC, and Mr. Mele Kyari, Nigeria’s national representative and member of OPEC Economic Commission Board, for their contributions to the OPEC-Nigeria relationship.

H.E. Al Ghais praised the Nigeria International Energy Summit as one of the leading industry events in Africa and highlighted OPEC’s strong connections and identity with Africa, with half of its members being African countries. He mentioned significant historical meetings held in African cities and Africa’s critical role in the future of OPEC and the energy industry. He highlighted Africa’s young and vibrant population and the substantial growth opportunities in the continent’s oil industry. H.E. Al Ghais expressed gratitude to the Nigerian government for facilitating his participation in the event and reiterated OPEC’s pride in counting Nigeria as a member country, expressing optimism for a successful partnership between Nigeria and OPEC in the future.  In conclusion, he thanked the Nigerian government once again and expressed OPEC’s anticipation for many more decades of a successful partnership with Nigeria.

Opening Remarks by: Mr. Mele Kolo Kyari, Group Chief Executive Officer, NNPC Limited

In his opening remark, Mr. Mele Kyari expressed gratitude, noting the crucial role of all IPPG members, who also serve as shareholders. Mr. Kyari emphasized the indispensability of two key elements in the industry and highlighted the robust regulatory frameworks in place, with support and cooperation from business stakeholders and regulators such as NUPRC and NMDPRA. He extended a warm welcome to Engineers Komolafe and Alhaji Farouk, recognizing their presence on behalf of IPPG. Mr. Kyari underscored the significance of an appropriate legislative framework, citing the importance of the Petroleum Industry Act (PIA) in driving industry progress and attracting investment. He acknowledged the pivotal role played by the National Assembly in facilitating legislative support and expressed gratitude to legislators for their esteemed presence at the summit. In conclusion, Mr. Kyari emphasized the necessity of collaboration between business stakeholders, regulators, and the government to ensure the success of industry initiatives.

Opening Welcome Speech by: Hon. Ekperikpe Ekpo, Honourable Minister of State Petroleum Resources (Gas)

Hon. Ekperikpe Ekpo, the Honourable Minister of State Petroleum Resources (gas), expressed his honour to address the esteemed audience that have converged at this year’s NIES Summit. This pivotal event brings together key stakeholders in the energy sector to discuss the challenges and opportunities that lie ahead. The theme of this Summit, “Navigating the New Energy World Order: Security, Transition, and Finance,” underscores the challenges and opportunities defining the times. The Honourable Minister shed light on the symbiotic relationship between the summit theme and the transformative potential of the gas industry in Nigeria. He emphasized the importance of energy security, highlighting the role of the gas industry with abundant proven reserves in enhancing it. Hon. Ekpo outlined the strategic pillars for revitalizing the country’s economy through natural gas development, including promoting gas-fired power plants, encouraging gas-based industries, developing necessary infrastructure, and strengthening regional gas cooperation. He reported significant progress in major gas projects and innovations, such as the Nigeria gas flare commercialization program and the Ajaokuta-Kaduna-Kano (AKK) pipeline.

Acknowledging the resilience of NNPC Limited and the commitment of President Bola Ahmed Tinubu’s administration to gas sector growth, the minister emphasized the importance of private sector participation. He concluded by highlighting the gas sector’s pivotal role in navigating the challenges and opportunities of the new energy world order and called for collaborative efforts to shape Nigeria’s energy landscape into a sustainable and prosperous future.

Oil Industry Address by: Senator Heineken Olokpobiri, Minister of State for Petroleum Resources (Oil)

Senator Heineken Olokpobiri, Minister of State for Petroleum Resources (Oil), welcomed all attendees to the summit, noting the presence of the Secretary-General of OPEC, who was visiting Nigeria for the first time. He highlighted the importance of the Summit initiated by Professor Ibe Kachikwu, emphasizing the gathering of industry experts and stakeholders. He proceeded to discuss Nigeria’s energy security challenges despite its abundance of oil and gas reserves. Senator Olokpobiri emphasized the need to translate these reserves into economic prosperity and called for an exploration of successful models from other regions. Addressing the issue of politicized allocation of oil blocks, Senator Olokpobiri advocated for identifying individuals with proven capacity, both locally and internationally, to explore resources for the benefit of Nigerians. He stressed the importance of attracting the right investments to guarantee energy security. Senator Olokpobiri raised concerns about global calls to abandon fossil fuel investments, highlighting Nigeria’s need for continued investment in the oil and gas sector to ensure economic growth. He supported the plan for an African energy bank and emphasized the importance of finance in driving investments. He urged delegates to explore solutions to energy security, transition, and finance issues during the Summit. Senator Olokpobiri assured attendees of Nigeria’s investment-friendly environment and dispelled concerns about divestments, stating that IOCs are not leaving but moving to deep offshore areas. In conclusion, Senator Olokpobiri welcomed all attendees to the 2024 Nigeria International Energy Summit and encouraged collaboration and discussions to propel the energy sector forward. He assured participants of the government’s availability for bilateral and multilateral meetings to address any concerns.

 Keynote Address by: The Special Guest of Honour His Excellency, Senator Bola Ahmed Tinubu, President of the Federal Republic of Nigeria and Commander in Chief of the Armed Forces

The President welcomed all attendees and expressed his pleasure in inaugurating the event. He noted that the summit was not just about discussions and deliberations but also about fostering hope and shaping Nigeria’s future energy landscape. President Bola Ahmed Tinubu thanked everyone who contributed to the summit’s success, highlighting their shared commitment to addressing the challenges and opportunities in the dynamic world of energy. As the first edition of the NIES during his administration, President Tinubu felt honoured to stand before the audience as they collectively charted a course for Nigeria’s sustainable and secure energy future. The theme of the summit, “Navigating the new Energy World Order: Security Transition and Finance,” was timely and critical given the rapidly transforming global energy landscape. Energy security was emphasized as paramount, both nationally and globally. Given emerging challenges, it was crucial to ensure the resilience of Nigeria’s energy infrastructure. The decisions made at the summit would have a lasting impact on energy security for future generations. One key issue addressed was the removal of the petroleum subsidy, a challenging but necessary step towards securing Nigeria’s energy future and fostering economic growth. President Tinubu highlighted the positive impacts of removing the subsidy, including improved domestic oil production capacity, reduced consumption, and improved import capture rates. The funds previously allocated to subsidizing petroleum products were now redirected towards developing and upgrading energy and social infrastructure. He acknowledged the immediate impact this decision may have had on citizens, especially those with lower incomes, and assured that social intervention programs would mitigate their effects. He called upon all stakeholders, including industry experts, policymakers, and the general public, to engage in constructive dialogue and collaboration to build a resilient and sustainable energy future for Nigeria. He also emphasized the importance of energy transition, highlighting the need to leverage innovation and collaboration to ensure a smooth and just transition to cleaner and more sustainable energy sources.

In conclusion, President Tinubu expressed confidence that the discussions at the summit would be instrumental in shaping policies and strategies for Nigeria’s energy future. He challenged attendees to actively participate and contribute their expertise towards finding solutions to the complex energy challenges faced by the nation. Together, he believes, they could navigate a new energy world with resilience, innovation, and shared commitment to a sustainable and secure energy future for Nigeria.

Panel Session 1: Keynote Address for the International by: H.E. Haitham Al Ghais, OPEC Secretary General.

Theme: Navigating the New World Energy Order: Security, Transition and Finance

 In the Keynote Address, H.E. Haitham Al Ghais, OPEC Secretary General, expressed gratitude to Professor Emmanuel Ibe Kachikwu, and commended Nigeria’s leadership in OPEC. Reflecting on COP 28, he highlighted the importance of inclusive dialogue and criticized attempts to exclude the oil industry from climate change discussions.  Al Ghais emphasized the need for diverse approaches to energy transition, rejecting a one-size-fits-all model and advocating for just, orderly, and equitable transitions. He cited examples of African leaders’ positions on fossil fuels and stressed the importance of technological innovation. Al Ghais outlined projections for global energy demand and emphasized the continued significance of oil in the energy mix. He underscored the necessity of investment in the oil sector for market stability and energy security, highlighting the risks of halting investment prematurely. Al Ghais reiterated OPEC’s commitment to market stabilization efforts and called for continued engagement from Nigeria. The OPEC Secretary General concluded his address, expressing anticipation for the ensuing discussions.

Panel Session 1: Navigating the new world energy order: Security, Transition and Finance

Panelists:

1. Dr Umar Farouk Ibrahim, Secretary General, African Petroleum Producers Organization (APPO)
2. E Gunther, Ambassador of the Federal Republic of Germany to Nigeria (Represented by Johannes Lehne)
3. Olu Arowolo Verheijen, Special Adviser to the President on Energy
4. Olalekan Akinyanmi, Chief Executive Officer, LAKEOIL Limited (Represented by Edward Dunny)
5. Osagie Okunbor, Country Chair/CEO, Shell Companies in Nigeria/Chairman, Oil Producers Trade Sections (OPTS) (Represented by Elohor Aiboni)
6. E. Haitham Ghais, OPEC Secretary General.

Moderator: Professor Ibe Kachikwu, Former Minister of State for Petroleum, Nigeria

Moderator

What do you see as a challenge that African countries face as they deal with the new energy paradigm, especially as it concerns security, transition and finance? How are you able to, working in collaboration with other APPO members, fashion a way forward for Africa to address this issue?

Dr. Umar Farouk Ibrahim

For APPO, the onset of the energy transition posed serious challenges to our member countries because these are countries that have relied heavily on oil and gas revenue for virtually everything they’re doing. And the success of energy transition means a quick move away from the use of fossil fuel to renewable energies. Incidentally, for most of our countries, in 70 to 100 years that they have been in the oil and gas business, they have been heavily dependent on outsiders for financing the industry, for exploration and producing, for refining and virtually everything including technology, expertise and market; because we produce and sell or export outside of Africa 75% of the oil that we produce, 45% of the gas produced. Yet our continent has the largest proportion of its population living in energy poverty. To address the resulting issues we now face, we concluded that Africa needs to first change the way we think. In other words, more of looking to the same source for financing, for technology, for markets will not work. That is why APPO decided to initiate the establishment of the African Energy Bank in collaboration with Afrexim Bank.

Beyond finance, there is a technology and an expertise challenge. No one African country can succeed on its own in the oil and gas industry once the IOCs finally leave the continent. None of us has the money to establish the kind of research institutions that can make us excel. However, if we come together and pull resources together, we can get there. We went around all our member countries to see what they have in terms of research institutions, training centers, et cetera. And we were not impressed. Instead of each country trying to establish these research institutions on their own, there should be collaborations among countries to establish regional centers of excellence. Finally, on market, we’ve been told severally that we are too poor to buy energy. I don’t believe we are poor. Africa is rich. Our governments are rich. If only they will sit and prioritize and eliminate corruption. With 900 million Africans living without access to modern energy or 600 million without access to light, we can’t say we don’t have a market. We have the market, but we have not developed it. If we decide to develop it, we’ll find that the 7 million barrels of oil that we produce and a few billions of gas, is not even enough for us.

Moderator  

With OPEC’s advantage of seeing the dashboard in terms of total energy mix, how do you see the field of play and what advice would you offer those African countries who think that they should retain their oil production and continue to go forward, and those African countries who think that we need to begin to look at very clean energy.

H.E. Haitham Ghais

I think this is a multifaceted question. There are many ways to achieve what you have asked, but I’ve consistently repeated the importance of investment. Today, the whole world has been talking about energy security. It’s become like a theme that everybody just loosely throws around without really contemplating the true essence of what energy security really means. To me, the fundamental number one factor that’s required to achieve energy security for any country is to have enough adequate investments in the oil and the gas sector, energy sector in general. As I mentioned in my remarks from now to 2045, our research shows that the whole global oil industry, the whole value chain, we’re talking not just upstream, the bulk is upstream, but also downstream, midstream. The full value chain will require over $14 trillion, nearly 610 billion per year. Over the past few years, unfortunately, the industry has suffered from underinvestment. We must have adequate stability that’s required in the market and a stable environment with reduced volatility where people can find the appetite to come and invest. The last thing anybody needs, whether you are an importing nation or a producing nation, or a hedge fund or an industry player or an investor, the last thing you need is volatility. Unfortunately, we are witnessing a natural decline rate of about four or 5% per year. We need to invest today just to keep production flat at a hundred million barrels a day, let alone to cater for the future growth in oil demand, which we project to be, reaching 116 million barrels a day by 2045. And this is our base case, by the way. We have a more bullish case where we believe oil demand could even hit 120 million barrels a day by 2045. So, this is the first thing, the importance of investment.

Another critical factor is the importance of having a balanced discussion on energy matters. You cannot just look at energy security and then not think of the other elements of energy poverty.  How can we call on the industry to stop investing when we have people who don’t have access, even to switch on the lights?  How can we call on people to stop investing in oil and gas when this is the future source of wealth for the nations and the people? We must do things in a balanced way, and that includes tackling environmental concerns. We should encourage investing in renewables, investing in gas, and continuing to invest in oil and the full value chain in the oil industry. And more importantly, investing in the technologies required to reduce emissions that deals with the emissions issue. But we have to deal with the energy poverty. We have to deal with affordability. And that’s how I think the importance of having a balanced discussion about all the energy related matters is very important, especially when we look at the future and the statistics, the staggering primary energy demand forecasts. The world is going to grow. I think we’re going to hit even 10 billion by 2050. The size of the global economy is going to double in size. It goes without saying, there’s not going to be one single source of energy that can supply and feed all of this demand growth. It has to be a balanced discussion. We have to continue to invest in the fuels of today in order to ensure the security and affordability that we aspire for, and to fund the transition from today’s fuels to the future fuels.

Moderator

Nigeria’s presidency has its own dashboard on total energy mix and is looking at addressing all the security concerns. With the ongoing debate, what’s Nigeria looking to do? How do we balance the obvious need to continue to produce the resources that we have and then the need to prepare without being caught unawares with the global requirement for energy transition?

Mrs. Olu Arowolo Verheijen

The global energy markets have gone through a seismic shift, if you can put it that way, since the Russia-Ukraine War. Which means that the tightness that we see in the market will remain there for some time. Nigeria has a role to play, not only in meeting energy security demand in-country, but to address the same on the continent in order to power our industrialization. And we need the gas to power value chain; moving literally from darkness to light. We are still at the very early stages and if we focus on even just meeting energy demand on this continent, there will be a need for oil and gas resources for some time to come. So, in talking about the energy transition, we have to make sure that we are transitioning from fossil fuels in a way that matches affordability of sustainable energy sources. When we look at the levelized cost of solar, especially grid scale, or alternative sources of energy, it is still twice or three times the cost of gas. So, we see our gas playing a strong role in the energy transition not only domestically, or regionally but also globally.  When you look at the demand curves or the supply curves going forward way into 2050, you see oil dropping a bit because of the replacement of cleaner technology, mostly due to electrification of road transport and some transition into cleaner fuels.  But for gas, when you look at coal switching in Asia, when you look at the need for industrialization – gas for feedstock and for petrochemicals – gas has a longer leg throughout the transition. So, what have we decided to do to prepare? I think the idea and the theme of this conference is really to think through what we do to enable ourselves to provide energy security, to make sure we’re doing so sustainably and that we are able to make sure that this is affordable. In Nigeria, we looked at our competitiveness and our ability to attract capital regardless of where that capital is formed, whether it is formed domestically, regionally, or internationally. The point is that when you look at the need for investments, particularly in the upstream, I think BP estimated it to be a close to $400 billion upstream over the next decade alone. In Nigeria, when we engaged the operators, we saw opportunities for at least another hundred billion over the next decade as well if the conditions are right.

So, regardless of where the capital forms, whether it’s indigenous capital, whether it’s an African energy bank, our opportunity set needs to be attractive. And one of the focus areas for this administration is to ensure that the government doesn’t stay in the business of investing capital in a sector that can easily attract private sector capital if we are able to make sure that the opportunity sets are just as attractive and rank high in global portfolios of investors. So, one of the quick things that we’ve looked at are things that help us reduce the circle time of our projects and execution timeline of our projects. It doesn’t matter how much capital is in the market, if it takes almost four years for you to execute a project, that capital will go somewhere else.

The other thing that we’ve been looking at is ways to optimize our cost premium. There are many things that have contributed to that, whether security issues that we’ve been dealing with in the Delta, an aging asset and many other things. And so, there are other initiatives being led by the regulators, particularly, I’m aware that the upstream regulator is looking at ways to bring down the cost of producing those barrels. In addition to making sure that initiatives like gas flare commercialization, carbon capture, utilization and storage are used to continue to decarbonize our oil and gas operations as we grow production. And when it comes to other sectors, I think in the electricity sector in particular, what we have focused on making sure that that remains a viable financially and commercially attractive value chain for investors. We’ve looked at ways to reduce the debts that are owed to whether they’re gas producers or generation companies, and we’re looking at the underlying cause of those accumulation of debt, which is the fact that the distribution companies are not financially healthy enough to remit money up the chain. So, one of the initiatives that we’ve been working with from the presidency is tackling the technical, commercial and collection losses of the distribution companies with a presidential metering initiative that basically looks for ways to reduce collection losses and improve revenue assurance in that value chain so that we can continue to remit money up the chain and make the gas value chain more attractive.

I think on the final point, one of the things that we’ve also been looking at is the competitiveness of our fiscal structures and the regulatory frameworks. Non-associated gas remains a bit of a challenge, particularly if it’s dry. If you look at the remaining reserves that we have, we talk about gas being our fuel for the future and our transition fuel. But 75% of our remaining gas reserves is non-associated and below a certain CGR or GOR ratio, it is unattractive or uncompetitive when you compare it against opportunities in Mozambique or in Ghana. So, it doesn’t really matter, again, where capital forms, if we’re not in a competitive environment and we’re not making sure that our opportunity set is attractive, then we will not be able to attract that capital. We are now working very closely to make sure that the post PIA fiscals make it much more attractive for investors to make the investments over the next few years.

Moderator

I know that during the Ukraine war, a lot of European countries began to move back not on their commitments to sustainable renewable energy, but on existential energy production. Now, I am asking in the context of all the arguments that are going on in terms of justifiability of the energy transition process, how is Germany looking at all this vis-à-vis the argument that Africa is not culpable for environmental issues like the West and so need to be given time to be able to grow their own base.

Mr. Johannes Lehne

Germany has started on a new phase of industrial revolution and industrial change in their landscape because climate change is real. We see the effects all over the world, and as it was rightly said, over the last 150 years, the industrialized countries have used up their fossil fuels. Fossil fuels are not endless. They will be finished one day. Therefore, this is the right time to start to invest in renewable energies and to change into an energy matrix where everything is well balanced and where you have energy security and sustainable energy supply; without contamination and with the help of the newest technologies. The Ukraine War was a catalyst for this. From one day to the other cheap Russian gas could not be used anymore, and therefore the industry in Germany had an energy deficit and they had to look how to fill it. How did they fill it? They started immediately to build LNG terminals so that gas can come from other countries who produce gas in abundance, and therefore Germany is for them a new market where they can sell and where they can rip profits. But on the other hand, Germany has a very ambitious agenda to convert their energy matrix into renewable energies. And we built between 15 and 20 gigawatts, annually in renewable energies from all types, wind energy, geothermal, so that we, by 2050 will be CO2 neutral and hopefully by then have a new energy matrix, which makes us very much independent of fossil fuels. I have the impression that somebody tries to play out financing for renewables against financing for oil and gas, and they tell us that the money is not enough for everything. But I think even listening to the words read by the Minister of Information of your own President, we are of the firm belief that the right mix is the solution to the actual energy crisis. Of course, we recognize that countries in development need oil to create revenue. They need gas as a bridge energy source, but don’t forget renewables. Also, all these countries are rich with possibilities for renewable energies from the sun shining 300 out of 360 days a year, which is not the case in Germany.  You have other geo thermal biomass solutions for renewable energies, and if you mix it right and create the right conditions for this, then your fossil reserves will last for much longer and will create the necessary condition for sustainable development.

Moderator

What do you see as the benefits in staying with existing fossil or looking into the new energy mixes? How are you benefiting from the opportunities thrown up either way and are you being supported by the regulators who are meant to enforce industry regulations?

Mr. Edward Dunny

We cannot over stress the importance of energy security in Africa. It’s kind of the most important thing that Africa is facing at the moment, because it affects everything. It affects health, food, transportation, economies, political stability, et cetera. So, it’s very important. And there are over 600 million people in Africa without proper electricity. That problem is going to even get worse because population is expected to increase to over 2.5 billion 2050. So, it’s very, important that the African continent is allowed to continue developing its fossil fuel alongside taking up the challenges of sustainable energy. And one thing that needs to continue, that’s very clear, is funding, because the funding needs to happen still. After all, when you look at the polluters in the world, the African continent is only representing about 3.8% of the overall carbon emissions. The big culprits you have are the US, China, India, et cetera. And if you look at what these countries are doing now, they are actually increasing their production of fossil fuel. So, we have to be very careful what we do, and the idea of having our own bank will help financing significantly. One of the biggest things going for Nigeria is the natural gas, which is considered a transition fuel. Most of the companies here have gas that can power all of Nigeria for sure. For companies like Lakeoil and other IPPG companies, they have been in this oil business for decades. And most of the skills, most of the experience, et cetera, that has been acquired over these decades can be transferable over to renewable energy. We also talk about supply chain. The supply chain processes that are used in the oil business can easily also be transferred over and utilized in that area. You also have a lot of knowledge in the subsea side, and that’s comes in very handy if you’re looking at carbon capture and storage. You need to understand your subsea systems. And last but not least, drilling capability. Whether it’s geothermal, et cetera, you have to be able to transfer that knowledge over. So overall, going on to developing renewable energy is also going to be exciting for Nigeria and the continent. But the key is the financing. Even with what we’re planning to generate within Africa, the western side needs to be able to continue funding the projects in Africa,

Moderator

Are you seeing a lot of collaboration between African operators? There are visa issues, travel issues, the African free trade agreement itself is still on a working line. It hasn’t really achieved all the objectives as expected. How about the market itself? Are we making any efforts at all to see an African common market where you can trade energy products? So that countries that are deficient in this can get from countries that have a surplus on this and technology can freely transfer. What your experience so far?

Mr. Edward Dunny

Any challenge comes with an opportunity. And I’m sure Africa will rise to the challenge and be able to strive through because there’s a lot at stake, quite a lot at stake. The survival of the whole continent depends on surviving there. Obviously, things are difficult. In Nigeria, for example, it is not an easy place to do business as we all know. it’s not different in most of the other African countries. But still things continue to get done. It might take longer, it might be done in their own way, but things are still done eventually. So, I don’t see any of those things are challenges necessarily that will stop the African market from functioning even without support from the West.

Moderator

I guess Shell must be in a very delicate type situation. On one hand, you’re trying to focus on your deep offshore, and you are trying to pull out from your onshore assets. You also arrive at the global level on pushing the issue of alternative and greener energy. How are you balancing all these conflicting interests with what your responsibilities are to countries in Africa where you’ve already invested.

Mrs. Elohor Aiboni

If you look at the history of the energy sector in Nigeria, you can’t tell that story without talking about Shell. And the same thing can be said of other African countries. If you look at Tunisia, if you look at Egypt, if you look at Ghana, if you look at South Africa, you will tell the story with Shell in it. So, with that, we clearly understand why for us in Africa, fossil fuel continues to remain important.  If you look at where we sit today in Africa, 63% of our fuel or our energy comes from fossil fuel, of which 50% of it is coming from oil and gas and 13% from coal. We still have a huge gap to close in Africa. We’ve got over 600 million of us without access to electricity. We’ve got about a billion without access to clean cooking gas. So, it’s no wonder why we are beginning to shift the renewed focus towards gas in line with the decade of gas agenda we have in our country. And that’s why you hear us talking about things like train 7 in NLNG. Just recently, we also took an FID for Eseni, mainly focusing our agenda on gas. But having said that, if we look at the changing energy mix today, Local content still plays a key role. As at 2022, the NCDMB did share with us, I believe last year in this same conference, that we’ve achieved about 54% of our local content level. We have a 10-year strategic roadmap, and in that our goal is to achieve 70% by 2027. So, we’ve got that gap still to close. And if you look at the multinationals today, we play a key role in closing that gap. And our focus is mainly on building human capacity and improving the supply chain we’ve got in Nigeria. If you look at our local content in our energy sector today, you see quite a number of players in there. Compared to the last 10 years, there’s been great increase.

Without international oil companies, you can’t tell the story of oil and gas in Africa.  And we’re beginning to see the same thing in the renewable space. If you look at the renewable space today, we’re beginning to shift in there. We recently commissioned a hundred megawatt per annum solar processing plant in Nigeria. That is critical when it comes to sustainability in Africa today. So local content indeed plays a critical role in driving sustainability and making every business competitive. And that’s why you continue to see us focus in this area because we greatly believe that in developing the capacity of locals in country, that’s one of the ways in which we can close the gaps that we see today in the energy sector.

Moderator

A lot of the things that have been said here fall right under the purview of what the new NNPC will help us achieve. Where do you see NNPC being in the next 10 years given the speed between the international community that is trying to move you to alternative energy mixes, and yet the need for you to fast produce what it is that we have as our national assets. What are the difficulties that you see? What are the areas that you think you need help?

Mele Kyari

It’s clear that we have a very difficult operating environment today that has taken away confidence from investors, including us. And that the key issue is managing the security situation in the Niger Delta. This is quite critical. And I’m also aware that substantial work has been done in partnership with the national security agencies, private security contractors, our partners, and the renewed push that Mr. President has put in place to see that we can bring it to containment. And this is showing up in the result that we are seeing today. But can we say that we’re done with security issues? The answer is no today.  So, the first issue that we must tackle headlong is to take back current production. Of course, we’re aware of the national decline that would always happen with reservoirs. If you don’t drill new wells, you continue to go down. That’s normal. Some of us are drilling. I can see a number of our partners are already drilling. But that is not sufficient to cover the decline that we’re seeing today. And that will come back when we’re able to address the security issue and also respond to some fiscal issues. And while the fiscal issues are addressed, even in the short term, you’ll see new capital will come in. The same way it is true for NNPC, it’s also true for our partners. So, until new capital come in, there is no way you can elevate production. And new capital can come in only when the right climate to do business is in place. And in our country, this is very understandable. That’s why we’re building new partnership with all the indigenous oil producing companies. We’re also looking for opportunities to bring in other mid-scale companies into our country. This is unavoidable. Yes, we can build local capacity, but we also do everything possible to see more external capital coming into our country so that we can build in the short term, we can put money into the business and grow production, not just for oil, but also for gas. We know that it is easier to get capital for gas than you can do for oil. That means that oil itself, once you’re able to produce it, its own cash flow can support some of the things that we can do without much of troubles. So, we’re focused on making sure that we build the domestic gas infrastructure, which will provide energy and then other sectors of the economy will pick up. And we can also make money from the gas. But also, the world needs gas today. It’ll do so probably even by 2050. We know that even by 2050 there will be substantial requirement of gas globally. So, gas is not going to go away. But it can go away from jurisdictions where your cost of production is higher and efficiencies are much more difficult to achieve. That means that you must make your own environment very competitive so that people can put their money here and they can rely on you to deliver gas into the market. And that’s what we’re doing in the short term, building new partnership, creating floating LNG.

There are a number of initiatives on ground, some are almost approaching FID, many are maturing to points where we can say yes, in the next 3 to 6 years, we can see at least one or two of these floating LNG come on the table. This is the quickest route. But you can also do the classical LNG. That’s why we’re also pushing with our partners. I’m not sure I have their authority to speak, but I think I can, we have 49% of the business.  We are pushing to make sure that we have a train 8, not just train 7 and beyond. And of course, there are other opportunities we are looking at. New partners to go back to the table and create new LNG plans. This is practical. We have all the gas that we require and we’re seeing new willing partners that are coming on the table. And lastly, pipelines across our borders. As my minister has mentioned, we are pushing with all determination the trans Nigeria/Morocco pipeline and also there are a lot of alternative routes across the Sahara through Algeria into Europe. We don’t have scarcity of gas. So that means that you can practically do all of them and still not exhaust the resources that we have within the timeframe of the energy transition. So, if you put all into your basket, you have a national energy company that has the right partners, operating in the appropriate fiscal environment. Issues beyond our control are issues around security.  There’s really no big deal producing 2.5 barrel of oil in this country, provided we’re able to address this. I don’t think its rocket science. It’s about putting capital, getting the technology right, partnership, and it’s already being brewed. I am sure that we will deliver this. Of course, this includes some of the conversations around the divestments that we’re doing. It’s part of the journey. And of course, that’s why we insist that anyone that is buying, doing business with us must be ready to do incremental production from where we are today.

Moderator

Is there anything in the horizon about an alternative to the Nigeria LNG? Given the fact that money is not available for gas transition energy, are we pushing to see whether your company can invest in an alternative to Nigeria LNG so we can begin to speed up the whole process of gas production and distribution?

Mr. Kolo Kyari

Yes, there is. What I can confirm is that we’re working on an alternative LNG plant in our country. We have two or three floating LNG projects that are on the table. Over all, we think that we can deliver. The bottom line is that we’ll do another LNG plan. I can say that with good authority.

Moderator

Honourable Minister of State for Petroleum (Oil), please address some of the concerns APPO put on the table in terms of our readiness to help put Nigeria in the position to give some commitments on some of the things that they’re looking for?

Senator Heineken Lokpobiri

We’re doing a lot in that regard. We took the Secretary General to go and locate a building for the proposed energy bank. Our commitment is to ensure that we do what is necessary to meet the deadline of March 31 so that the bank can be domiciled in Nigeria. I have also briefed the President a couple of times, and the President is committed to doing whatever we can as country. We’re also trying to raise the capital that is needed as equity contribution. NNPC, Local Content, NUPRC, all of them are on the table to ensure that we raise at least the money that is needed to meet a minimum equity of hundred million dollars. I assure Nigerians that we’re doing everything we can to ensure that we meet the requirements.

Moderator

Let me summarize and say that from everything that we heard across the table we must begin to distinguish between the issue of alternative energy commitment and the pace at which we achieve it. Africans should not become reticent about what a global movement is. The reality is that people are moving to a different alternative on energy mix. And whether or not we like it, they provide the finance. And if we do not have the finance, we’re going to get stuck at some point in time. So, it’s important that for the 10 or 15 or 20 years that we see our traditional fossils active in terms of production, we spend quite a lot of that money to begin to look at the alternative mixes and begin to fund those. That will be a better way to provide security in our energy mix than the polemics of look we have got to keep going because we didn’t cause it.

The second point I think is important is that we’re beginning to look at how to self-fund both through APPO, and hopefully through OPEC at some point in time so that we can have funds that we can reach out. And some of these funding mechanisms may not necessarily be institutional funding mechanisms. it’s may well be reaching out to development funds of some of these fairly liquid countries. And Nigeria provides a huge opportunity for such play in terms of getting our refining capacity, which sooner or later we find excess of what we do domestically. If we had investors like Saudi Arabia be able to invest in sources of crude for us to be able to funnel at these refineries, we can really make a good run for the African play. The collaboration within the African continent is absolutely key and we need to begin to address that and nobody to drive that harder than indeed Nigeria through the global affiliation of NNPC and other producers who are here.

Finally, local content is key and that’s one area where Nigeria has done so well and exported so much skills. But we need to do more. A 10-year roadmap to grow African content is too slow given the fact that we have been in this domain for sixty years. I would say speed up the process. Let us see how much more we can do in terms of growth of the African content. The future is bright. It is very challenging. It’s going to be dependent on us to grow. And one of the things I willlike all of us to take away from here is that at the end of the day, the policy makers help, but the players are more important and the players are all of you.

Panel Session 2. Ministerial Panel on Sustainable and Equitable Transactions on African Oil and Gas in the New World Order. (Nigeria & Other cases)

Panelists:

1. E. Honourable Tom Alweendo, Minister of Mines & Energy Namibia
2. E Senator Heineken Lokpobiri, Minister of State Petroleum Resources, (oil) Nigeria.
3. E. Right Honourable Ekperikpe Ekpo, Minister of State Petroleum Resources (gas) Nigeria.

Moderator: Mrs. Oghogho Effiom, Regional Director, Africa Society of Petroleum Engineers (SPE) Domestic Gas Business Opportunity Manager for SPDC

Moderator

Nigeria holds the top spot as the largest oil and gas producer in Africa with very large reserves. The government of Nigeria has taken significant steps to enhance sustainability, transparency, and equity within the transactions of the oil and gas industry with the PIA. And the aim of that Act is to create an environment that is conducive for sector growth and to address the issues that the communities might have had with the extractive industries. What are the other initiatives and reforms that the government is looking at in order to support the oil industry in Nigeria?

Senator Heineken Lokpobiri

The fact that Nigeria has enormous reserve is not a doubt. But like I said when I was talking, these haven’t translated to real economic prosperity: Reasons being that we have a lot of fallow wells. We have a lot of wells that have been drilled, capped, but not being utilized. They are abandoned. One of the easiest ways for us to come out of this problem is to produce enough quantity for supply to the refineries and make energy available to our people. So as government, one of the innovations we’re bringing to bear is to ensure that those idle wells are all made available to companies and individuals who have proven capacity to be able to utilize them. This will bring in a lot more thousands of barrel addition to our production volume. To make it work, we are not going to politicize the allocation process. Among those allotted marginal fields in the last process, only 3% of the beneficiaries are today being able to actually do proper exploration; all because the process was politicized. Also, those who have modular refinery licenses and have capacity to explore will be given priority. If you look at Walter Smith, he has a refinery which produces about 5,000 barrels a day. But he has the field stock. He has a marginal field next to it. So, he just takes his crude and then refines and then sells to the public. So, there’s a lot more value addition. We are looking at borrowing that kind of model. Timeline will be given for exploration. Once this expires without activity, the award automatically expires at the end of the timeline. We are also trying to make the entire industry more transparent and liberal. Ministerial consent or license renewal will no longer be delayed, for example. We are confining the selection to those with proven capacity.

Moderator

Just to paraphrase what I heard is that yes, Nigeria has a lot of reserves, but we also have a lot of locked-in potential. Many wells have been drilled, capped and abandoned. And of course, it’s like having money and keeping it under your bed. You can’t utilize it and you can’t use it for growth. So that’s one of the areas where we want to try to unlock because we need more and more feedstock to be able to feed the industry and to feed our prosperity. You also talked about something that resonated quite well, which was removing politics from the industry sort of, and then focus on giving rights to people that have proven capacity.  The example of Walter Smith is one of marrying both the industry with the feedstock – everything becoming like an industrial area and it all ties together in a cohesive supply chain. Short timeframes for regulation and field operational activities should be the norm.

Moderator

How is Namibia balancing the need for economic development with the equally important need for environmental conservation and social responsibility in your resource transactions? And what role does the international collaboration play in Namibia in this regard?

Honourable Tom Alweendo

Namibia understands fully well that the kind of energy landscape we want to see on the continent is something that cannot be done by one particular country alone. If you want to talk about how Africa is going to make use of its resources, we need to have a continental approach. And that’s why for us, it’s very important to be part of this conference, to be part of this discussion. But I also want to say, that I have attended several energy conferences on the African continent, and invariably what we discuss at these conferences is how we must be allowed to use our fossil fuel resources. We want to make that point how we are energy poor in the continent, how the transition is not fair because we did not pollute the environment. I think we’ve made that point sufficiently. What I would want us to see going forward is for us to start to talk about how to put in place a successful energy program on the African continent.  What are the strategies that we need to put in place to make it happen? Strategies should be developed around local content, markets, financing, making the oil and gas industry useful for our economies, for our communities. This is so that we don’t find ourself in a situation where the traditional capital markets where we are getting the capital now is not available anymore. The energy bank, for example, is a really good idea. We need to continuously talk about it. How do we make it successful as one of the strategies?  Also, marketization of the 600 million Africans who don’t have energy. What would be the strategy to develop this group into an African market?

On, your question about how do we balance the requirement of the environment and what we need to do? I think it’s tied in very well with the energy transition issue that we talking about. Because we are being told if we do too much fossil fuel production, we’re going to pollute the environment and therefore need to be careful how to do that. I don’t think that’s a reason why we shouldn’t exploit the natural resources we have. Recently, I think the technology has improved such that we should be able to exploit our fossil fuel resources with a technology that is available right now to minimize the effect of emission that is likely to come from the production of fossil fuel. In Namibia, environment is very much on our agenda. In fact, it is captured in our constitution. Ours is probably one of the few constitutions where environmental protection is not just a law on its own, but part of our constitution and therefore we are quite mindful of the fact that we need to do this in such a way that we do not make the environment worse off.  Namibia is not an oil producing country yet, but we have made very good discoveries and we are about to go into production. And as I emphasized, we as Africans need to collaborate. I’m hoping that Nigerian business people will take the opportunity being offered, to invest in Namibia, especially in the area of local content.

Moderator

We have many initiatives in place to boost the gas industry, but we still have some issues that persist. These include: inadequate infrastructure, funding gaps, investor concerns, etc. Are there initiatives that you can share that are work-in-progress to help address some of these specific challenges to the gas sector?

Honourable Ekperikpe Ekpo

Nigeria is a gas nation and it’s a known fact. Our responsibility is to ramp up production and increase it for the good of Nigeria and for export. Under the Decade of Gas Initiative, we have about 20 projects that we have identified, which will add more flow of gas into the system that is awaiting FID. We are working on it and once that is concluded, it’ll add about 4.6 trillion cubic feet of gas per day.  We are looking at non-associated gas also. The current PSE does not favour non-associated gas, so my office and that of the senior special assistant to the president on energy are working on reviewing the PSE commercial terms to ensure that access is granted for non-associated gas. These are ways of trying to ramp up production. And of course, after the production, we need to evacuate it and then circulate it. That is where the OB3 and AKK come into play. For OB3, work is in progress and will likely be completed this March 2024. Nigeria has no business with energy poverty with the proven quantity that we have in stock. Once these infrastructures are completed, we will have abundant gas in circulation. Beyond OB3, the AKK will take gas from the southern part of the country to the North-Central and up to Kano.  The Geometric IPP was commissioned because of sufficient gas supply. The government is putting measures in place to ensure that we have enough gas supply to penetrate all the nooks and crannies of Nigeria. Mr. President has appointed the MDGIF council whose mandate is to help provide funds for gas exploration, reticulation and distribution in conjunction with willing and able investors.

Moderator

I would just like to round up by saying a little bit about the Society of Petroleum Engineers. Because of the importance of gas to this country, the Society of Petroleum Engineers is also working on a gas innovation summit, which will take place later in the year where we will be able to take the business, match it up with cutting edge technology, and then put them together in a room where we will deepen these conversations and take them to the frontline, where they’re being worked. And it’s our commitment and dedication to turn this around for this country.

NIES 2024 Women in Energy Roundtable – Experience Sharing

Special Guests of Honour:

1. Barrister Uju Kennedy-Ohanenye, Minister of Women Affairs
2. Doris Anite, Minister of Industry, Trade and Investment.

Remarks by: Dr. (Mrs.) Blessing Enakimio, Director of Events, Brevity Anderson

The session was called to order and introduced by Dr. Mrs. Blessing Enakimio. She greeted the attendees, expressing her pleasure at their presence and gratitude for accepting the invitation. She emphasized the conversational nature of the roundtable, highlighting its purpose of fostering mentor-ship opportunities and sharing experiences among women. Dr. Enakimio emphasized the importance of women taking proactive steps to create their own opportunities, rather than solely seeking inclusion in existing structures.

The participants were welcomed, and their presence was appreciated. Dr. Enakimio expressed her optimism for productive deliberations and the possibility of establishing a road map for future actions. 

Opening Remarks by: Barrister Uju Kennedy-Ohanenye, Honourable Minister of Women Affairs

The Minister of Women’s Affairs, Barrister Uju Kennedy-Ohanenye acknowledged the strong character and hardworking nature of women, noting that while some may not be proactive in creating opportunities, the Ministry is working to change that mindset in order for women to be more assertive in seeking opportunities. She addressed concerns about women’s involvement in politics, citing poverty as a major hindrance. She emphasized the need to empower women economically to increase their participation in politics. Drawing from her experience as the only female presidential candidate among men, she highlighted the importance of women asserting themselves and earning respect in male-dominated spaces. Dispelling the notion that women are not supportive of each other, she shared examples of women thriving in non-traditional roles like engineering and mechanics. Barrister Kennedy-Ohanenye encouraged women to be determined and self-encouraged. She expressed confidence in women’s ability to excel, noting that while mistakes may occur, they should not be used to judge all women. Highlighting the power of women, she announced a sustainable empowerment program for women in villages, encouraging them to register and become part of the initiative. She emphasized the importance of accountability and tracking of resources meant for women and children through the program’s portal. She encouraged women to excel in various fields while also fulfilling their roles as supportive partners in their homes. She advised against undermining men while striving for equality in the workplace, emphasizing the need for balance between professional ambition and family responsibilities.

Opening Remarks by: Dr Doris Annite, Honourable Minister of Industry, Trade and Investment

Dr. Doris Annite thanked the organizers for their commitment to diversity and inclusion of women in the energy sector. She highlighted the importance of women’s participation and leadership in the energy sector for driving economic growth, innovation, and social progress. She noted, however, that the percentage of women in the energy sector is significantly lower compared to other sectors, attributing this gap to educational, religious, and cultural biases. Acknowledging the government’s awareness of these biases, Dr. Annite mentioned educational policies aimed at encouraging young girls to pursue science-related subjects. She cited initiatives such as the Adolescent Girls Initiative for Learning and Empowerment project and the STEM Project of Nigeria and Tech Women program, which mentor and train young girls to unlock their potential in science-based careers and the energy sector. Dr. Annite emphasized the role of women as primary energy managers in households and the ministry, highlighting the government’s efforts to promote the renewable energy industry in line with the United Nations’ sustainable development goals. She stressed that promoting gender diversity and inclusion in the energy sector is not only a matter of social justice but also a strategic imperative, as a diversified team leads to better decision-making and improved productivity. In conclusion, Dr. Annite proposed creating mentorship programs and having role models to help women navigate challenges and take on leadership roles in the energy sector.

Discussants

1. Elohor Aiboni: Managing Director, SNEPCo on allyship, technical achievements and industry trends.
2. Catherine Uju Ifejika: Chairman/Chief Executive Officer, Brittania-U on mentorship and networking.
3. Nkechi Obi: Group Managing Director, Technooil Limited on Entrepreneurship
4. Oladunni Owoh: Dr. Oladunni Owoh, National President, Women in Energy, Oil and Gas (WEOG) Nigeria on diversity and inclusion
5. Efuntomi Akpeneye: Chief Legal Officer, Oando Plc on career journeys
6. Adesua Dozie: Vice Chairman, ExxonMobil Nigeria on career opportunities/paths for women

Moderator: Mrs. Eyono Fatayi-Williams, President Women in Energy Network

Moderator 

You are in the man’s world doing what men do. But one thing is clear, you have networked correctly. You have done whatever it takes to ensure that you are at the top of the house. What advice do you have for women who are seeking opportunities in the energy sector? And, talk to us about the importance of networking, mentorship in building a career or building a business because that obviously is something that brought you to where you are today.

Catherine Uju Ifejika

I’m a lawyer by profession. I worked for Texaco and Chevron. I became the general counsel for Texaco in 1991. I was the youngest, at 31 years. In 1997, I became the company secretary, public and government affairs manager; I was the first to hold the three positions in one. And by 2001, when Chevron and Texaco merged, my portfolio for public and government affairs covered West Africa, while I still remained the company secretary for Nigeria alone. And I held these positions, without promotion for seven years until 2007 when I decided to resign my appointment. It was smooth sailing for the company while I was there. However, the same month I resigned, things began to go awry. The company wanted me back and decided to elevate me to executive director position. I refused and left. The managing Director then offered me a five years consultancy to handle government affairs. I said, no; that I needed to have time for my family before deciding what next was in line for me professionally. I started Brittania-U with 1.5 million Naira, which was $10,000 then. Impossibility is not in my book. As a matter of fact, I like proving that everything is possible; because God said that He created me in His own image. I took that 1.5 million Naira and used it to take a bank loan of 23 million dollars for upstream investment, which I knew nothing about. Business is in my DNA, so, I got a foreign partner because to operate as a marginal field operator, you must have a technical partner who, unknown to me was going bankrupt. They wanted to use me, but instead I got $4 million out of them because I was able to see through the agreements they had prepared.

The first thing to be a successful woman, from experience, is to have capacity in your chosen field. Put aside those fixations on makeups and the flaunting of waists. You must be able to negotiate favourable terms by being able to see through documents prepared by the other party for you to sign. You must be bold and able to make informed decisions. The greatest thing that we have is partnership, but this partnership must be with people that you have the same mindset with. When our drilling failed and we got a dry well, I was advised to quit and get paid off because I had practically lost the borrowed $23 million. I refused and went back to my bank to ask for more money.  One thing that you must do for you to go into business, is to build your reputation. My reputation spoke for me and the bank gave us additional $11.4 million. Back in the field we did a prognosis of what went wrong and found out that we went in the opposite direction. Five days later we struck oil. If I didn’t hold my position that I was not moving anywhere, they would have paid me off and I would have been the loser. If you want to go into business, know what you want to do. If you are looking at somebody to help you, be sincere and be open and ready to learn. After we struck oil, they now asked us to do pipeline. I told them, I don’t want to do a pipeline because every community on that route will require us to pay. I went and did FPSO. It was built in Louisiana and in a record time of seven and a half months, instead of the normal 12 months to 18 months duration because I pressed them in order to save time and money in my operation back in Nigeria. Now, as you’re doing business, you must be looking out for opportunities. The challenges I faced became a learning curve and an opportunity. Our delaying in finding oil cost a loss of $6.8 million. The pushed my mind towards owning a vessel. I bought one for $3 million and started to rent it out to IOCs at $14,000. Because it cost $1,000 daily to load out from Port Harcourt, I went and got a jetty in Warri. I then got my own export terminal because the transaction with Chevron was not favourable. Other operators have the opportunity to come to our terminal. We have the largest gross tonnage vessel in Nigeria, even before regulation made it mandatory to own one. Today, we have everything that we need across the chain. We have the vessel, we have the FPSO, we have the jetty where we move from.

I was given two months to fizzle out of oil and gas business. That was in 2007. Today, I am still here while those who were sneering at me have gone under. I’m not only the first female owner-operator in West Africa, but around the world. I reckon among the six most powerful women in the oil and gas industry world-wide according to NASDAQ Mentorship is about passing on your knowledge, your skill, your experiences. But you don’t just throw it around. You must pass it on to somebody who is ready and has the same mindset. So, if somebody wants to mentor you in oil and gas, you must have the mindset of what you are coming to do because it is serious business with risks and challenges. When faced with situations, you cannot say let me go and talk to my mom or my dad. No. Mentees must be bold and fearless.

Moderator

It’s all right for us to say we mentor people. But are you ready to be mentored?  The days of trophy women are gone.  Do you have the mindset for mentorship? Who are your partners? Do you know them? It’s not about just money. It’s about knowing what to do. This is a story of focus, determination. Every difficulty, every challenge is an opportunity to do something different.

You’ve already charted a course for yourself. Chief Legal Officer of Oando PLC, not just a small company. What advice would you give to the young women here today who are aspiring to pursue their careers, to do the sort of things we’ve just heard? What would you advise them to do if they want a career within the energy industry? What sort of experiences and lessons can you share with us?

Efuntomi Akpeneye

I started my career in Banwo and Ighodalo, a leading law firm in Nigeria. I was there for about three years and then I spent another four months in another company before starting at Oando. I started as a legal officer, right at the entry level. In terms of what I would advise younger lawyers who want to venture into the energy industry, the first thing I would really say is that you are first a lawyer before you become an energy lawyer. And your foundation is so key. So, my first advice would be to start off in a good law firm. Being a lawyer, there are rudiments of the legal profession you must learn before you transition into in-house. I mean legal drafting, advisory, all those basic things that you must learn. I cringe sometimes when I see how some lawyers draft. You must learn the basics before you move in-house. Now I like acronyms. So, I’ve coined an acronym that I use to describe what I would advise and its PRAISE. P is for Personal Development. It’s non-negotiable. You must develop yourself. The industry is so dynamic, things change every day. But there’s so much information out there. When I started, there was hardly internet. You had to read big books, but now there’s so much on the internet. There are podcasts, there are articles. There’s so much you can learn on your own. Don’t wait for people or for your organization to train you. One of the first things that get cut is the training budget. So, you have to take responsibility to train yourself. At Oando, what we do is that we have a platform called Oando Academy where different employees in diverse areas train others. That’s another way to do it. So personal development is key. You can’t get away without it.

The second thing I would say is Relationships and Partnerships. There comes a time in your career that it’s a given that you have talent and intelligence. So, what really takes you to the next level are the relationships you’ve built, both with your colleagues, especially as an in-house lawyer like myself, you have to build those relationships because it makes the work easier. Relationships you build with other stakeholders outside of your immediate environment. So just build those relationships and make sure that you are networking, you’re reaching out to other people. The third thing I’ll say is Acumen, basically your business acumen. To advise your organization you have to learn the language of the business. I remember when Oando had the energy services subsidiary where we got rigs, and we were contracting them out, I had to learn all the terminologies. I’ll get the technical people to sit down and say walk me through how it works from the wellhead to the terminal. You have to learn the business or else you cannot advise. And another thing is that you have to make sure that as a lawyer, you are not just throwing the book at the commercial people. If you do that, you become increasingly irrelevant. You’ll see that you are not being invited to meetings. They’ll just take decisions and you are not at the table. So, you have to make sure that you are providing creative solutions within the legal ambit that can help achieve corporate objectives. You have to learn the business. You can’t negotiate that out.

The next thing is integrity. You have to have integrity. I’m not going to dwell too much on that, you know what that means. Now, S is for self-care. Now we’re speaking to younger women. You know, you are probably at the same time as your career is growing, your family is probably growing. So, there’s a lot of pressure on women, young professionals that have families as well. So, I would say that you need to take care of yourself. You can’t draw water from an empty cistern. Make sure that you are taking care of yourself as well as everything else that needs to be taken care of. And lastly, excellence. Excellence in everything you do. I mean, your work will speak for you. For you and I, and I think I mentioned that part of excellence is that your foundation must be right. So, if you are starting out your career, please as much as you can, start off in a law firm and make sure that you learn the basics and, when you transit, your work must speak for itself. You must be excellent. So, I think those are the points.

Moderator

You’ve given us something we can’t forget. Praise: personal development, relationship, acumen, integrity, self-care, and excellence. Young people learn the business. There is no shortcut.

You represent a women’s organization and, when we are talking about closing the gender gap, you are at the forefront of doing this, making sure that this happens. I’d like to zero in on diversity and inclusion in asking you this question. How can organizations foster diversity and inclusion in the workplace? And maybe you share what initiatives the organization has put forward to make this happen, to promote these values.

Oladunni Owoh

Talking about diversity and inclusion, and using WEOG as a case study. Africa is in darkness, energy-wise. 70% of African countries don’t have reliable electricity. Nigeria discovered oil 50 something years ago and we left the men alone there. It’s not good for men to be alone, so let’s go and help them. Let’s get into the business, let’s get to the table. And if they don’t give us a space at the table, let’s carry and stand on the stool. We will even be taller than the table.  WEOG started as an idea in 2017. Now how have we fostered diversity and inclusion? When we all started, we were very focused on what we wanted to achieve. And I knew it wasn’t going to be a sprint, so we just had to ensure the foundation was solid. So, the very first thing we started was capacity building because when I moved around Africa, I could barely see any women in energy, oil, and gas group or anything. I met a group in America and I became a member.  They’ve done it for 25 years and they still have 25% women representation. So, we put out the word, anybody, any woman that’s interested in the industry and wants us to build gender diversity, please come on board. Let’s go for training. We facilitated training, got sponsorship by Wells Fargo. At the training session, we who were women in energy, oil, and gas in Nigeria, were taken as a case study. With this case study we designed how we can implement our vision. And of course, we started making calls. And then because we saw that it was going to be a national roll call, because there’s no way you can make that happen if you don’t plan for the policy change aspect of things, we began very intentionally linking up with governments. We did a lot of research. During the PIB review, we shared a 238-page document to people in the downstream, midstream and upstream sectors. Each group was to come up with points that would go into the PIA. Eventually, we came up with a seven-point position, which we presented to the government and to the National Assembly. After we finished presenting it, we followed up because we wanted to get policy. We followed up the Senators and members of the House of Representatives. The majority of our contributions were adopted for the PIA. And when the job was done, we highlighted the fact that if you want to cause a change in the nation, you must come from the top to bottom. So, we were focused on getting government attention first. So, we did research as of that time, there was no single woman in DPR at the top leadership, the same thing with NNPC. The first women to get on NNPC was our chairperson. And that was in 1991. So, I’m talking about 2021, 30 years later. No single woman.

Now we don’t preach equality, we have to also mix and match it with culture. But we preach diversity, we preach equity, and we preach inclusion. A bit of my background in the industry, I joined this industry in 1996 as intern at a downstream kind of arm of Shell. And then from there, I moved to Unipetrol where I stayed for 12 years.  From there I went into Wall Street; representing some Wall Street organization in facilitating energy teams across Africa.  I was helping them to do fundraising. But at one point, I just realized that it was like a task that wasn’t gaining any traction. Because going around Africa, one of my discoveries was that African nations weren’t even prepared to actually close their energy gap. We don’t want to do it. We leave it out to other people to come and help us do it. We don’t want to do midstream; we don’t want to do downstream. That’s where the real money is. CEOs in the industry said putting money into refining was high-risk money.

Moderator

 From the diversity and inclusion point of view, what steps can companies take to create an inclusive workspace culture, the kind of inclusive culture that allows a woman to be in the position that you’re in as the Vice Chairman of Exxon Companies in Nigeria. One that encourages women to explore diverse career paths within this technical industry of ours, and one that allows them to seize leadership opportunities when they may become available.

Adesua Dozie

I started my career in a law firm. Very shortly thereafter, I had the opportunity to work for Total. I was with Total for three and a half, almost four years before I went to work for Coca-Cola Company, where I worked for almost a decade. I left Coca-Cola as the equivalent of General Counsel for Eurasia and Africa. Thereafter, I joined General Electric in Lagos, Nigeria, initially to support the power business, but left General Electric as General Counsel of Africa. I’ve been with ExxonMobil since 2019. I have had a diverse career. I’ve worked in different industries. A lot of it has been curiosity.

I think what the question is asking is from a company side, what can companies do as the first female to occupy the position? I’m acutely aware of a number of things. First of all, I have a responsibility to ensure that I create a pathway for other women. I’m not the last, but I’m also acutely aware of the barriers, the unique barriers in our industry for women. Globally, 18% or less than 25% of the workforce is female. In Nigeria, the data is even more stark. I think it’s less than 20%. And when you look at leadership positions, only about 1% of global CEOs of oil and gas companies are female. When you look at executive leadership, the data shows us about 17%. And the question is, why should companies care? I’m not going to look at this from the equity perspective, but really just bring in the fact that it’s actually good for business and good for cost profitability. There’s data by McKinsey that shows that diverse teams are more resilient, they’re more productive, and they’re more innovative. McKinsey data also shows us that companies that have diverse teams in their top quarter are 25% more likely to have above-average profitability than companies in the bottom quarter. So, it’s good for business.

And the question you asked is how can companies do this? I think some of what we’re doing today, talking about it, but I really want to start with walking the talk and the tone from the top. If you look around the room and this is really a good start, and I celebrate the organizers and Brevity Anderson and everyone. But really, we’re in a room of women talking to women, a panel full of women talking about an issue for women. And I think that really has to change. We are leaders, male and female have a responsibility not just to endorse diversity but to champion it. We need to walk the talk. Companies also have to look at the reasons why there are challenges with recruitment and retention. And I think some of the challenges that we face specifically in Nigeria and across the African continent are unique to us. There are gender issues, but quite frankly, there are also issues regarding age discrimination. It behooves us as leaders to put policies in place to support that. We also have responsibilities to ensure that we are not just championing, but also making sure that we have meaningful career paths for women. And when we see people struggling, we are putting in place structures to support them. Things like the Women in Energy Network, and what my other co-panelist was talking about and certainly what we have in Exxon like the Winning Ladies Network, which is an affinity network that supports and promotes the retention and promotion of women are critically important because they ensure that women can lead, thrive, and grow within the organization. So, we are not where we used to be, but we are not where we should be. And it’s not just about individual companies, it’s not about ExxonMobil. It’s not about NNPC. But each one of us as individuals, and as leaders, we have a responsibility to make sure that we are creating workplaces where women can grow, thrive, and be promoted. The point is the scales are tipped so largely in favor of men that companies have a responsibility to create and put in place networks and frameworks to support women.

Moderator

As a successful entrepreneur in the energy industry, what challenges have you faced, and what strategies have you employed to overcome them? How have you stayed the course?

Nkechi Obi

Let me thank the organizers of the summit. I think this is the seventh edition and Techno Oil has been able to sponsor this women’s segment. This is all about the commitment we have for women. We believe that networking is part of our success. For me, it’s part of my success story and that’s why we always come to be part of this event and to see that women gain as much as possible. But the challenges will be there. Like, when you look at the business, especially when you look at the petroleum sector, you see our girls, they’re all very brilliant. But along the line, they see that girls are going down. What is the cause? Culture, and it’s not just about Nigeria, it’s about motherhood, and what can we do about it? Nothing. That does not mean that we still cannot excel in it. We can do that. So, when it comes to the challenges we have as women, especially in the oil business where it is dominated by men. They network at night, in the midnight, they’re all over the place, but I’m going to look at my own strategy very well, study it, look at it and see how I can adopt that. These are part of what we have used. Because for me in Techno Oil, it is all about identifying gaps. I don’t imitate businesses; I look at what is not there. That’s how I started Techno Oil. My career started at Mobile Oil. That was the name. And there was a gap. I was there, the company didn’t want to go into it and I decided that I have to close the gap. It’s all about seeing the gap and closing the gap. And today we’re in fuel, we’re in lubricants, we’re in gas, we have a cylinder manufacturing plant. That was a business that we needed to close off for the government because the adoption of gas was very low. So, we looked at it and thought about what we can do in that area. For me, it’s not all about profit and that’s just it. So, all our models are built around closing the gaps. We looked at lubricants, we have plant facilities. We looked at the fuel depot at that point where Techno Oil started the business. These are where the IOCs were basically 25-26 years ago. The IOCs were dominating this business.  There were no indigenous companies. But then we had to start up something and look at what they’re not doing and their businesses at that point were focused on their own safe analysis. So, what we could do was to start up something and deal with our local production, that’s the business.

Moderator

A business model is built on closing a gap where there is a need; you’ll have customers pure and simple. Work on your own strategy. Do not look for somebody else’s. If somebody else’s strategy is networking at night, you find a way of networking during the day to get the same results.

Share examples of effective ally-ship in the energy industry. How we can continue to promote technical achievements and stay ahead of industry trends. How can women remain in the core parts of the business? You have a family, you are in a business, but you’ve stayed the technical course. How can others do that?

Elohor Aiboni

If I look at myself as an individual, what got me to where I am, I must tell you, is that disruptive capability thinking, disruptive capability mindset. That got me to where I am today. I was ready to challenge the status quo. I was ready to embrace change. I was ready to take on challenging tasks. No was not an option. So, with that in mind, I stayed focused at work. One of the things I quickly learned growing up in an oil company is I needed allies to survive. Imagine you’re less than one year in a company working with men that are old enough to be a father and they have to teach you. I got in as a production engineer working with technicians and one of the things, they said to me was, we’ll finish teaching you work, you’ll become our boss. And I said to them, at least I will make you proud. Yes, until today they have that pride, they’ll tell you they taught me work and I’m happy to say yes, they taught me work. I like to build ally-ship very early and that’s what we must do to be able to close the gap. We can’t close that gap alone. We can’t change things alone. We’ve got to raise men that will go on that journey with us. And it actually starts from us women at home, how we raise our boys. It starts from there. As African women, to be honest, I think our mothers didn’t do justice back then. The men, they were treated differently. It has to change. For those of us in this world, it has to change. We must treat ourselves differently. And then when we treat the men, the boys at home differently, they grow up to be young men. And before you know it, the narrative begins to change. And that’s why I love what I see with the women organization these days. And you said it, we’ve got to come together. I think we are too siloed. We’ve got the silo mentality. It’s about we, it’s about ways, it’s about that. We’ve got to come together to be able to close this gap. Take the men with us to be able to work together as we want to close the gap that we see today. So how do we build technical competency? It starts from catching them young in STEM. We’ve got to go out to the schools to help educate our boys and our girls in school. When we give scholarships, a lot of companies here give scholarships. How many percent goes to women, young girls? We’ve got to be deliberate about it. If we’re not deliberate about it, I’m sorry, that funnel will not be full. And if you look at the young entrepreneurs today, look at the startups. See the young girls there, their brains are fire. How do we encourage more girls in there? We’ve got to encourage entrepreneurship and startups to be able to embrace technology. Technology, for us in Nigeria, we’ve got to spend money on infrastructure. We don’t have lights. How do we expect them to gain the competencies they need? Cost of living in Nigeria is high. The internet these days is a lot more affordable than it was then. People are able to do a lot more these days. But how else can we further encourage people to embrace technical competency? We’ve got to work with the government. We’ve got to embrace emerging technology today. We celebrate our banking sector. What did they do differently? Why can’t all sectors do the same? So, it comes with being very, very deliberate to close the gap that we see, the technical gap that we see today. To be honest, the onus is on you, it’s on me. It’s on every one of us here to help close that gap. And when we do, Africa will be a better place to live in.

Catherine Uju Ifejika

Regarding career building, you must be able to do two things. The first is work-life balance. You must understand your first job starts at home. You’ll be able to go to the kitchen, you cook because you are the mirror to your children. The second thing is networking. For you to build a network that is enduring, you must keep in touch. Develop good communication skills so as to be able to appeal to people’s conscience. Networking is what translates to partnership.

Adesua Dozie

When we talk about energy security in Africa, it goes to gender issues as well. Because women are the backbone of a lot of African societies. And, if you have 600 million people around the continent who don’t have access to electricity, it means you have a whole bunch of women who are fetching water, doing different things, and they’re not learning, not earning, and not participating in community decisions. In order to change the narrative, rebalance the gender inequality, and the gender stereotypes, it’s an imperative that we have energy security.

Moderator

We must close the gap and when we do, Africa will be the better for it. We talked about disruptive capability mindset, readiness to challenge the status quo. You need allies to survive, women. Let’s stop talking to only each other. Let’s start talking to the men as well. We need to take them on this journey. We are not where we want to be, but we’re on a journey and we are moving in the right direction. And I’d like to encourage the companies here, please encourage STEM, sponsor those girls. Be deliberate. Go around the value chain. Create opportunities for women in contract, in procurement, in projects. Whatever needs to be done. The woman who is in the energy sector today has value to bring to the table. She will make a difference. So please give her a chance.

Panel Session 3: Young Energy Professionals Forum on Digital Transformation and Sustainable Energy Solutions in Upstream and Downstream Sector.”

Opening Speech by: Mr. Ahmed Galadima Aminu, Executive Secretary/CE, Petroleum Technology Trust Fund (PTDF).

At the Young Energy Professionals Forum on Digital Transformation and Sustainable Energy Solutions in the Upstream and Downstream Sector, Mr. Ahmed Galadima, Executive Secretary and Chief Executive of the Petroleum Technology Trust Fund (PTDF), delivered the opening speech. He remarked that the summit was a pivotal event in the oil and gas sector, providing a platform to showcase innovations and discuss industry issues. Addressing the young professionals gathered, Mr. Galadima expressed pleasure and honour in delivering the opening speech, noting that they represented the true leaders of the fast-evolving generation.

Acknowledging the generation’s familiarity with digital technologies, he emphasized PTDF’s commitment to developing skilled manpower and promoting technological advancement in the oil and gas sector. Mr. Galadima highlighted the importance of understanding the younger generation’s values, learning styles, and career motivations.

The session’s theme, “Digital Transformation and Sustainable Energy Solutions in the Upstream and Downstream Sector,” aligned with the PTDF’s objectives. Mr. Galadima emphasized the role of digital technology in revolutionizing operations in both upstream and downstream sectors, citing examples of advanced analytics, artificial intelligence, and robotics improving efficiency and safety. However, he acknowledged the challenges on the journey towards digital transformation and sustainable solutions, emphasizing the need for investments in human capital, technology infrastructure, and fostering a culture of innovation and collaboration. Mr. Galadima stressed the importance of STEM education in laying the foundation for innovation in the energy industry. He announced the launch of a STEM program to cover one thousand schools in a pilot scheme and the establishment of two centers of excellence in Port Harcourt and Kaduna. In conclusion, Mr. Galadima highlighted PTDF’s efforts in nurturing an ecosystem where young researchers can explore innovative ideas and technologies in collaboration with universities, strategic partners, industry leaders, and technology providers.

Panelists.

1. Mr. Sops Ideriah, Group Managing Director, West Africa, SLB
2. Mr. Tayo Akinkunmi, Country Manager, TechnipFMC
3. Mrs. Ehimhen Agunloye, Business Opportunity Manager, SPDC
4. Mr. Olakunle Osobu, Deputy Managing Director, Nigeria LNG Limited
5. Mr. Gbolahan Lawal, Managing Director, GIL, Automation Limited
6. Dr Isaac Enakimio, Chief Executive, Knowledge Incorporated Ltd.

Moderator: Dr Yetunde Aladietan, Senior Lecturer University of Abuja and Managing Consultant, Klensfield Environmental Services.

Moderator

When people talk about digital transformation, all they think about is digitization.  But it goes way beyond that. We talk about skilling, re-skilling, and upskilling people so that they meet up with the emerging technologies. The panel will go beyond digital transformation in order to marry it with the sustainable energy solution because there’s pressure on the energy sector to go with the energy transition whereby we produce clean fuels.

In your experience in SPDC, what are some challenges and opportunities for sustainable energy solutions in the Nigerian upstream sector? And how is SPDC addressing them through digital transformation?

 Ehimhen Agunloye

First of all, generally as an energy industry, we’re facing a lot of challenges. The first one I’ll say is that there’s going to be a lot of population growth in Africa itself. Urbanization is happening, and we can’t kid ourselves.  We need the energy industry people to solve the whole urbanization problem by getting energy to the interiors. So, this can also be an opportunity. No matter how we pretend, the traditional oil and gas industry is under a lot of pressure from energy transition. That doesn’t mean that oil and gas is not going to be here. There’s a lot of reports that oil and gas is going to remain here for quite a while.  And by 2050, we’re still going to have oil and gas here for 50% of our energy. Nonetheless, I think oil and gas companies, big companies have a huge role to play when it comes to energy transition. The reason is, we have a large risk appetite. Companies like Shell have a good balance sheet. We can afford it. Technology requires a lot of money. I think the real game changer comes from technology. We need to start applying technology in the right form and across the industry before we can really make that shift. And if we cannot make that shift, a lot of the companies, big companies like mine and even the smaller companies, would struggle to move through the energy transition. In Shell, we do a lot of things when it comes to energy transition. We have a whole business unit that is investing in renewables. We have the power, we have the money, we have the bandwidth, we have the customers to be able to do things. What we need is for industry to collaborate in order to really make this leap change.

Moderator

How do you think digital transformation can enhance the efficiency and safety in the adoption operation, particularly in West Africa?

Mr. Sops Ideriah

SLB as a company is moving from being a leading oil and gas servicing company to evolving into a global technology company, driving energy innovation through a concept we call a balanced plan. Sustainable energy needs to be cleaner, affordable, reliable, equitable, and secure.  This is my own view of what balance means when we talk about sustainability and sustainable energy. Coming to your core question about technologies and areas where we can drive progress around sustainability. In SLB, we’re looking at this in four buckets. The first bucket is driving everything around decarbonization initiatives. We can’t run away from where we are as an industry and the impact of our industry on the environment. So, the very first thing we’re doing is investing and deploying our innovative capabilities in decarbonizing industry currently as it’s. So that’s decarbonizing ourselves, the oil and gas industry and even other industries. That’s our primary focus. There are technologies there like CCUS, which is carbon capture utilization and storage, or other areas like methane monitoring and methane minimization. Understanding that methane is 80 times more potent than carbon dioxide. So that’s the first area that we’re focused on.  The second area is investing heavily in renewable energies. We have technologies like hydrogen, geothermal, and energy storage. Most of the areas that are very relevant to the renewable energy industry. We are investing heavily in this. The third part, which is a bit infused into what we’re discussing here, is bringing software technology to bear beyond hard technology, which is a digital aspect of it. We think that the application of digital in all forms, we’ve already had AI, machine learning, remote ops, automation connected platforms in all aspects. Digital has such a transformative impact and potential that for regions like ours in Nigeria and West Africa, there’s so much potential there. So, we’re investing heavily in digital, and we’re providing multiple solutions on the digital front, which will come to bear within this industry and the world at large.  And the last piece I’ll just share is collaboration, and that’s the last piece. We are pretty focused on partnerships and collaboration and driving ourselves forward from a standpoint of sustainability and from a standpoint of digital. And I’ll give you one example where we’ve partnered with the government, academia and the industry to put forward a program which we call the next step program. In SLB, we partnered with NCDMB and SLB ourselves. We went to three major universities, and we basically started a cohort program where we opened up our digital technologies to the brightest within the universities and asked them to build, using AI machine learning to build new plugins for Nigeria specific market. And last year we just went past the, the first cohort. And since this also has a tilt towards the generation coming through, I think this piece on collaborating and making sure we’re bringing through academia as our fourth pillar is extremely critical for us. So those four areas are just areas I wanted to share in which, SLB is making strides in terms of driving us a sustainable future in Nigeria and the world large.

Moderator

Looking at it from a global perspective, what trends do you see emerging in intersection of digital technology and sustainable energy solutions?

Mr. Isaac Enakimio

Taking off from the last gentleman, I just want to pick up something about digital transformation and something you said earlier that digital transformation goes beyond just technology to understanding the context that sits within it. So, if you think about digital technology as the all-encompassing business model, people, process, technology, and all different things that make up that, you then think about digital transformation from a point of key context that you need to take into account. So, things like purpose. Purpose is a strategic lever for anything that you do when it comes to digital technology. You think about the people you’re dealing with, you talk about the different aspects of the operational processes, stakeholders, the knowledge capital, and local knowledge. What exactly are we trying to benefit from that? And these are the key things that we begin to see as the conversations around digital transformation and the different industries considering the sustainability is one of the key trends that runs across all industries in today’s society. So, when you think about trends that are coming up today – we have talked about smart grid, we’ve talked about IOTs, we’ve talked about robots as well. When you think about robots, when you look at it from a perspective of people, process and technology, technology is primarily an enabler.  We talk about technology as being stimuli. But technologies enable us. So, you think about how virtual reality has come into play today. Virtual reality does a lot of simulation and building.  It enables decision making, reduction of waste. It enables efficiencies.  So, these are key things that we talk about.  So, when you look at the sustainable energy goals, they fall generally around environmental, social, and economic viability. Now, putting these things together, you are looking at innovation, it’s a key driver to reducing waste and creating efficiencies in human capital. You look at the utilization of knowledge gap, for example, when you think about different stakeholders within the organization, people that come, people that go.  There is a huge loss of knowledge capital, especially around digital nomads.

When you take that into account, using technology in a sustainable environment means you take advantage of local knowledge while they’re there to map out different world. I listened to the Women Round Table where one of the panelists talked about drilling for the first time, but not finding oil and losing about $23 million on that drill. But they went back to do some prospecting.   Using technology, using confirmation, using information, they were able to say, okay, let’s drill from another quadrant and they struck oil in huge quantity. That’s what technology does. It saves time, it creates efficiency, it creates deliverables that we didn’t have in the first place. So, when we put all that together, there is a key element around the trends that are coming today. We’ve talked about networking. Networking is absolutely beneficial. But from a global perspective, global networking becomes very viable, very achievable. Again, there’s something that the pandemic did as crazy and as nasty as it was, one of the benefits is that it made the world smaller. It made us a whole village. So, with technology, there is a lot of collaboration that can be done. Just by a click, you can join a conference in Nigeria from the UK via technology. And we’re talking about policies, we’re talking about innovation.    These are some of the key things that we see in digital transformation. I want to emphasize here that when you think about the use of technology in today’s society, we need to think about it from a blue ocean perspective. Now, when you look at it from the point of the fact that when you put a master group together, the master group is made up of people from different industries who come together around a common goal with different perspectives coming up with a blue ocean strategy or idea that enables or fosters innovation, that fosters creativity, that fosters growth. Otherwise, technology is useless if it’s not adopted. If we don’t gain new value from it, it’s useless. If there is no advancement that comes out from it, it is useless. Technology is the key game changer to move sustainability and the energy firm forward. We need to implement the technology that we have, but also be able to think outside the box to make sure that we can report new value that delivers results, that delivers benefits.

Moderator 

Can you share examples of your successful integration of digital technologies in the upstream processes, to optimize production and minimize environmental impact?

Tayo Akinkunmi

 Digital transformation is a buzzword that came to us in the early 2000. But it’s building on all kinds of successes that we’ve had since humans started using Abacus. At some point we found transistors. At some point, we decided to get integrated circuits. Then we stumbled on telephony system and then worldwide web. And at some point, we decided, look, we can start using this for our business. We created software tools and one of them was ERP. And then parallel to that, we were creating all forms of really nice sensors that would detect things, and the limitation was how to transmit that data and beyond that, how to understand that data. Now it’s everywhere – on the reservoir, to the workshop, to what is going on with thermal imaging.  So digital transformation is a concept of saying, look, we have all these successes, we have all these technologies, we have this massive amount of data that we have to understand and use for the benefit of optimizing our efficiency and bringing that to our industry. What does efficiency mean to the oil and gas? It means timely discovery of first oil; cost savings; uptime and availability system. This is what drives our innovation. We have all sort of transmittable data. So, we focus on leverage. We leverage available hardware, available technology that allows us to transmit a lot more, a lot faster. And then we went into developing or creating eco-space of applications that can talk to each other, even to the point of being autonomous. And so, you gather all that data and the next thing is how do you use it from the standpoint of helping our customers go from discovery to first Oil as soon as possible? We decided to go on what we call an SSI mantra, which is simplifying something and then standardizing it. Talking about standardization, I remember at some point in 2015, someone told me that there are over 250 specs of yellow colour paint. Which means if a customer wants a certain spec of yellow, you have to mix it. And if you miss it, you’re going to have to redo it. So, we went overboard. And the idea now is, let’s standardize this. Let’s not make every engineer that comes out of college create his own spec and everybody has to stick with it.

The last part is industrialization. In other words, how do we improve our processes to industrialize the process of creating that value for our customers. Beyond that on the opex side, you imagine that you have a system, you have an operation plant where you do have thermal imaging system and capability. You have methane monitoring system. You have operation efficiency systems. The whole idea then is to bring all of that together. So, you have a system that automatically adjust valves. You have a system that is constantly looking at each valve that’s operating on the field and comparing it to what we call the valve signature. So, you can look at every valve and every time the valve operates, you compare how it performed to how it was supposed to perform. And then you can warn the folks at the monitoring system about the potential failure of the valve. In doing that, as an example, you are able to go from a response based to a risk-based maintenance system. You can do a condition-based maintenance. So, all of this put together, we have it in a suit of software. Now, there are challenges. Obviously, customers have a lot of data that they don’t want to share. And it’s understandable. But the good thing is that it comes back to the technology that we talked about, blockchain technology. The same one that powers crypto currency can actually manage our data and secure our data. Again, this is where we are taking a tool and using it for digital transformation. So ultimately, we focus on delivering what our customers need. We focus on leveraging existing, and in some cases, we have to create new ways, new technologies, new sensors or make them more configured to how they’re going to be used. Ultimately, the focus is taking people out of the red zone; keeping them safe; making sure the system is up and always running; have predicted maintenance system that allows the customers to plan the maintenance program in such a way that it does not disrupt their operation. And more importantly, ensuring that we simplify the system to where it can be secured can be used.

Moderator

This is a youth forum, and we can’t have this session without talking about talent development and also training because it’s key for the young professionals; constant training. So how important is talent development and training in ensuring the successful implementation of digital transformation initiatives within the LNG industry?

Mr. Olakunle Osobu

I’ll start with a bit of statistics. It’s been judged by the World Health Organization that the population of Nigeria by 2050 will be about 400 million. That would make Nigeria the third largest populated country in the world after India and China. That’s good news, by the way, because we have the area to take the mass. The second thing is we have a huge youth bulge. For those who don’t know what a youth bulge is, it means we have over 65% of our population being between the ages of 10 and 35. So we are in a very viral country. And that’s a very good thing. And if you’re just thinking about it, that was one of the reasons the COVID-19 incursion was not as lethal as everybody thought it would be in Nigeria and maybe in a lot of the African countries. Now, having said that, it means we have a burden of very viral young men and women that we need to engage. They need to be trained; they need to be upskilled. We have to start thinking of human capital development. How fast can we do this? The first thing is to build the institutions as fast as the children are being turned out. When you have a huge gap of over 10 million out of school children, that is trouble. Another challenge is even how to put them in the classroom. Where is the classroom that will take almost 10 million people that will write JAMB every year? And if everybody passes, they can only accommodate maybe a fraction of that number because of not having enough universities. And that is where technology comes in. Technology comes in because now you can sit in your own classroom and get a degree. So, it’s all about digital transformation. It’s all about networking. It’s all about connectivity. And this is what COVID helped us to advance while we had to sit at home.

For a company like NLNG, the COVID scourge wasn’t as impactful as it was everywhere else because there was nothing we wanted to do that we were not able to do because we are putting technology that allowed our staff to remain in their homes and continue to be productive and do their work even more than they did in their offices when they were allowed to come in. And that was so successful that even post COVID, people still work from home. Secondly, gas has become a ready-made alternative fuel to crude oil. Gas is where we sit. Now that we’re thinking decarbonization, we’re thinking cleaner energy and so we are back to base because Nigeria is originally a gas country rather than a crude oil one. Coming back to gas is home for us. So, what are we saying? How can we use technology to better produce gas and where do we sit today? We take gas from the IOCs, compress it and sell. We’re able to take propane out, take butane out, which are also cleaner than fossil fuel and sell to the Nigerian market. What does this do? It helps to fill that gap for domestic consumption in homes. And 100% of what we produce today is consumed within the system.

What do we also use technology for in advancing gas production? We have digital twin technology. Digital twin is able to simulate what an engineer does in a plant.  Right now, to mature a plant operation mine from inception to being an independent plant operator takes about two years. With digital twin technology, you are typically able to do that within months. And I’m saying months, three, six months. This is what would’ve taken you nothing less than two years to achieve. So, technology is able to help fast-track and simulate for the young man what he needs to learn in two years. We have for the plant what you call smart helmet. What this does is it allows the OEMs who typically don’t sit within that space to communicate with our engineers and work with them in activities they hitherto will need assistance for without having to wait for days. This improves our production; it improves our efficiency and also in a safe manner. And we have a zero tolerance within our company for safety. So, we work in a safe, clean, and efficient environment using our technologies. We use Artificial intelligence. And I tell you, for everybody in this room that has a smartphone, and I know we all have a smartphone, your smartphone is an AI device. Very few people use up to 10% of the functionalities in your smartphone.   I bet a lot of people cannot imagine what a smartphone can do for them today. That phone can see into your house, into your room, and listen to conversations you can never imagine if you know what to do with it. And those are the things that will fast track education for the young ones. And I tell you, those young ones know these things I’m talking about more than a lot of us, the older ones.

So, what we are doing with the young ones is bringing technology to their fingertips. And that’s why you see a lot of not so school-educated young men on the internet, on social media, being able to be productive and make so much money by just putting out contents that people watch, getting followers, getting views, and so many things to make money from. So, if you’re thinking, what should we be doing with this youth bulge? What should we be doing with the youths? It is to bring them into the digital space. Teach them coding, talk to them about the tools they have in their hands. Let them be creative. Now, a lot of people talk about AI, robotics and technology taking jobs. The technologies will still require human intelligence. It’ll require human creativity. The difference is we will be able to do more.  So today in NLNG we are smart working and not hard working to produce more. We work efficiently and work safely.

Moderator

How can SMEs in Nigeria leverage digital technologies to compete effectively in the energy sector?

Mr. Olakunle Osobu 

The energy industry is a very conservative industry. As early as maybe 10, 15 years ago when I was hopping jackets, deploying technologies in the oil field, you would find out that there were very few areas where you had GSM network. Whereas GSM network has been a proven technology over and over again. Even as earlier as two years ago, I went for a commissioning meeting at an FPSO in Nigeria and internet was only allowed in some parts of the building because of cybersecurity. But it is still a very knowledge driven industry. So, without having experience, you can’t just jump into the oil field. Hence, training on man – machine interface is very important as we go ahead and deploy. Otherwise, you go into places where, in every other country, this technology drops your operating expenses by 30%. But in Nigeria it does nothing because of human and environmental factors.  The second thing you look at or that I’ve seen as an indigenous automation company and deploying digitization is that there’s also a big play for deploying fit for purpose solution. Let give you an example. Fourteen years ago, we went to deploy a wellhead SCADA system. Everybody knows SCADA is a no brainer. If you deploy technology that measures your production on each of stream or wellhead, it gives you immediate value over time. If that is a shallow field where you go by helicopter, just from a helicopter ride, the cost of deploying the technology is already saved? So, it’s a no brainer. Everybody should have it. Well, but here’s the catch. When we deployed, they started giving data. Two weeks later, the whole well was stripped because to a fisherman, that solar panel was more important than what we were doing. And while trying to harvest that solar panel, he brought down the whole well.  This is technology that saves time, saves money and has been deployed across the Gulf of Mexico, but in Nigeria it loses production and causes problems with community people. Another challenge in deploying technology is battery life. Some of these systems are designed for climes where the humidity is not as much as what you have in Nigeria. So, you see on data sheet, on spec, that battery life of a particular solution or the board rate for transmitting signal is x factor. And this has been proven everywhere else. But if you bring it to the creeks of the Niger Delta, you find out that it’s a whole different experience. So, as we go out to deploy whether as a small operator trying to use cloud computing or AI as a differentiator or as a big system trying to use digitization to solve the aging of your operations or even lower the cost of production and so on and so forth, you need to have in mind that Nigeria is very, very unique. And the same concerns that affect deployment of infrastructure in the non-oil and gas industry affects what happens in the oil and gas industry. Solar panel to the fisherman helps him to charge his phone, which is tied to survival because he has to speak with his child. If only they gave us the option of providing them with solar panel, we would have donated a truck load of solar panels to them just to keep our well producing.

Day Three: Wednesday, 28^th February, 2024

Panel Session 4: National Oil Companies Forum

Theme: Sustainable Strategies for Energy Leadership: Navigating Security, Transition and Finance in a Changing World 

Brief Ministerial Remarks by: Senator Heineken Lokpobiri (Ph.D.) Minister of State for Petroleum Resources (Oil), Nigeria.

During the National Oil Companies Forum, Senator Heineken Lokpobiri, the Minister of State for Petroleum Resources (Oil) in Nigeria, delivered a brief remark on the theme “Sustainable Strategies for Energy Leadership: Navigating Security, Transition, and Finance in a Changing World.” Senator Lokpobiri welcomed the attendees, including permanent secretaries, dignitaries, chairmen or MDs of IOCs, and industry leaders, noting the importance of national oil companies (NOCs) in ensuring the welfare and well-being of their respective countries. He highlighted Nigeria’s reliance on oil for 80% of its foreign exchange and emphasized the strategic role of NNPC, Nigeria’s national oil company, and other NOCs worldwide.

Senator Lokpobiri emphasized that NOCs will define the future of the oil and gas industry, especially in the face of campaigns urging the abandonment of fossil fuels. He stressed that while Nigeria is open to transitioning, it will do so at its own pace and emphasized the need for indigenous funding solutions for the oil and gas sector. He encouraged collaboration among NOCs and suggested that NNPC could enter joint ventures with countries like Saudi Arabia. Senator Lokpobiri also highlighted Nigeria’s favourable investment climate and competitive fiscal framework, despite challenges with slowing investment.

In conclusion, Senator Lokpobiri expressed gratitude to the panel experts and attendees, acknowledging their role as the architects of a new global order in the oil and gas industry. He welcomed their insights and collaboration suggestions, recognizing the importance of financing for a successful transition.

Keynote Address by: Mr. Haytham El Maayergi, Executive Vice President, Global Trade Bank, (Afreximbank)

Mr. El Maayergi expressed his gratitude for the opportunity to address the audience and highlighted the importance of the theme in addressing pressing issues facing the continent. He emphasized the need for Africa to navigate energy security, transition, finance, and other strategies with courage and boldness. He recognized the significance of the gathering in shaping Africa’s energy future. Regarding energy security, Mr. El Maayergi noted the paradox of Africa’s abundant energy resources and the lack of access to reliable and affordable energy for the majority of the population. He emphasized the importance of universal access to clean energy and called for legislative environments that attract investors. He also stressed the need for regional cooperation to balance demand and share resources effectively.

On the issue of energy transition, Mr. El Maayergi acknowledged Africa’s vulnerability to climate change despite contributing minimally to greenhouse gas emissions. He advocated for a just transition approach that considers Africa’s perspective, highlighting the continent’s potential to become a world leader in renewable energy due to its abundant resources. Regarding energy finance, Mr. El Maayergi noted the challenges faced by the oil and gas sector in attracting investment. He highlighted Afrexim Bank’s role in financing the sector and its commitment to the African Energy Bank, which aims to provide sustainable financing for the energy sector on the continent. In conclusion, Mr. El Maayergi emphasized Africa’s potential to become an energy powerhouse but stressed the need for intentional efforts and internal funding capability to achieve this goal. He thanked the audience for their attention and participation in the summit.

Panelists:

1. Kwame Baah-Nuakoh, General Manager, Strategy & Investments, Ghana National Petroleum Corporation (GNPC)
2. Fatima Adanan, General Manager, Finance, Nigeria LNG Ltd
3. Natalie Taft, Exploration and Production Planning Manager, Strategic Fuel Fund (SFF), South Africa.
4. Athony Chatu, Chief Geoscientist, National Petroleum Corporation of Namibia
5. Baboucarr Njie, Group Managing Director, Gambia National Petroleum Corporation (GNPC)

Moderator: Engr. Tony Attah (FNSE), Independent Energy Consultant and Former MD/CEO, NLNG Ltd

Moderator

For over the last 100 years, it’s been about fossil fuel. But within the realization of the need to save our planet and the implication of how fossil fuel is contributing to that, this transition is being accelerated, it is about that acceleration that we gather here to talk about energy security, energy transition and most importantly financing. We have the oil, but unfortunately, we don’t have the technology, nor do we have the money. And therein lies the dilemma.

Can you just speak to the sustainability strategies that GNPC is deploying and how are you going to make that difference to deal with the three elements that we talked about? You’ve got the reserves, you don’t have the technology, nor will you have the financing if the world transition from fossil fuel?

Kwame Baah-Nuakoh

We at GNPCs share a lot of the positions taken so far in this Summit. For instance, the APPO Secretary General talked about the fact that we don’t need anybody’s permission to produce the resources that we have. And I think Minister Alweendo from Namibia also had a similar position. So, from that standpoint, we appreciate the transition. We are not in denial, but we also believe in the fair and equitable way of transitioning. Mr. Atta talked about the fact that we’ve always been in transition. Ghana used to produce a hundred percent of its power from hydro. And so, we were green long before others started thinking about energy. Of course, the results of these greenhouse gases meant that the water resources in certain stages had to dry up during certain parts of the year. So, you don’t have enough water to power your hydro systems. So, then that’s when we went into looking for heavy oil to produce power. We transited into fossil fuel and now to gas to power. And so, if you fly into Accra, you see the lights on it is because GNPC and its partners very early on as part of our strategy, decided to do gas to power. And currently about 70% of the power produced in Ghana is from gas engines. So, I think for us, the other point we need to make, sometimes it’s about definitions. Do we see gas as a transition fuel for GNPC or we see it as a destination fuel, if somebody tells you and you are convinced that gas is a transition fuel, it means within a certain period of time frame you probably need to think about moving away from gas. We don’t plan to do that in the next 30 years. So, then the question is, is gas a transition fuel or is a destination fuel? I mean, this is open because whoever defines a concept controls the narrative. So, if we accept a particular definition of what gas is, especially for Nigeria, which has such a large discovery of gas, if the conversation is that gas is a transition fuel and you’ll be transitioning from it, then how does this justify the economics of your gas projects? If we’re defining what green resources were, would Norway have said that oil was a dirty fuel when their whole economy relied on that? So, at every stage in time, definitions do matter. And so, we need to be careful when we are accepting a particular definition. Having said that, at GNPC, we are trying to deepen our operator capabilities so as to be able to monetize our oil and gas resources. We are in the era of divestment by IOC’s and other companies. We are positioning ourselves to efficiently operate these untapped, and divested resources. I mean, we’ve worked with our IOC partners to build capacity and we think as a national oil company, we should be in a position to take over some of these assets.

We are having discussions with the support of our minister for those fields that were given out to companies that have not shown the capacity to develop these fields. The timelines are a bit more stringent. Either you do it or you move on so that somebody else takes over. We need to make sure that our resources don’t become stranded assets. And so, from a policy direction, we are looking at that. From a commercial angle. We are even buying stakes into existing producing fields. I’m sure you heard of the 10 jubilee fields. In 2022 we took an extra 7% commercial stake in these fields. It’s providing us with a cash flow for our subsidiary GNPC flow code to be able to support other projects. In terms of gas infrastructure, it’s critical that to be able to use the gas domestically, we provide all the necessary critical infrastructure. It is very easy to say, well, we want to continue producing our gas. What if the rest of the world is not buying your gas? What do you do with it? So, creating domestic demand for our gas, either in the homes or for industry, is one of the key strategic moves that Ghana is taking. So, we are building the gas critical infrastructure, including pipelines, gathering stations, regulatory and distribution facilities. Examples include the Tema city gate, which is a project to make sure that we have different levels of pressure supplied to different industries within the Tema enclave to produce power and other manufacturing activities. We are also setting up the Tema LNG project together with Shell. And then there’s the Genser pipeline, which in the middle part of Ghana.We are trying to transport gas from the western part to the centre to produce power. So, for us, gas has a critical role in the Ghanaian economy. We think we are going to do it long term, but we are going to produce it more efficiently, especially together with our partners. We’ve agreed that by 2025, there will be no flaring of gas on that project. So, we are very clear in our minds the role gas has to play and the infrastructure required to do that. And we are also very much in collaboration.

Moderator

We’re all accepting that gas is a transition fuel. For Africa, transition to what? How is Nigeria LNG contributing to Nigeria’s energy leadership more from the domestic angle?

Fatima Adanan

I think it is a very important discussion about where do we want to be, and I totally agree with Kwame that we don’t want anybody setting the narrative for us. Now, as Nigeria LNG, I know a lot of you are under the impression that we produce mostly for export. I would like to clear up that thought. In actual fact, Nigeria LNG, a few years back, we do produce LPG, which is butane and propane, and also condensate in addition to the liquefied natural gas, which we produce. And we took a decision to make sure that a hundred percent of our LPG is sold in-country and in Naira, so that it is easy for accessibility. Now, when we started, we were producing 70,000 metric tons. Today we’re producing upwards of 1.5 million metric tons of LPG. So, part of our vision as a company, Nigeria LNG, is to make sure that we make Nigeria a better place. What Nigeria needs now is to empower our people and make our economy grow. That multiplier effect, we need to make sure that it is homegrown because we are the ones who will produce what will make our country better. We are starting with LPG. We have a trajectory that in the next two to three years that we have at least 40% penetration of changing the energy mix in Nigeria from coal and biofuel to using gas, which is cleaner. In a long way, that will go to alleviate some of the climate goals.

 Moderator

 1.5 million tons of LPG coming into the country. That has to be remarkable. But it’s even more remarkable that it is available in Naira. Given the pressure we’re having on the Forex, that has to be a major contribution by a company.

What are the roles of Strategic Fuel Fund within the South African energy leadership space? I know coal was a big deal, still a big deal from the standpoint of energy, but also employment and livelihood. The entire energy transition today is challenging.

Natalie Taft:

Strategic Fuel Fund is the strategic oil reserve agency of South Africa. On behalf of the country, it is our mandate to procure and store oil so that in the case of an emergency or energy crisis, we would be able to supply the country. We also manage all other fuel related assets for the good of the nation. We report directly to our Department of Minerals and Resources. And we are fully a government-owned agency operating as an NPO. Our business involves infrastructure development. We have the biggest crude oil storage facility in the Southern Hemisphere. If you could imagine the length and breadth of six soccer fields, that’s in ground tanks, we are able to store up to 45 million barrels there. We also have an aboveground storage facility that we are in the process of refurbishing that can store up to 7.2 white products. And recently we have just bought another petroleum products storage facility also in Cape Town. So, the anchor business for SFF is within the storage of crude oil and products. But as part of the country’s IRP plan, the integrated resource plan, one of our key initiatives is to fund infrastructure projects that can help with the transition of the country to cleaner fuels in order to lessen energy poverty. But at the same time, we need to work towards sustainable development as well. So, to this end, we fund various projects. Although coal is still 82% of our energy mix in South Africa, we are working towards various other plans as well. SFF itself is busy with a project where we plan to build an LNG facility on the east coast of Africa. Prior to 2020, we had a terminal operator license just to import because South Africa is a net importer. As net importers, our approach to our energy mix is very different from everybody else. There is so much reliance on the coal system at the moment. If you visited South Africa in the last few years, you will know we have a phenomenon which we call load shedding, where our power grid is subject to outages and shortages. And this is directly linked to the coal supply because it can be quite erratic. And there are many points within the supply chain that can be affected at different times. So, to this end, the IRP was created, the integrated resource plan, and this plan is pushing us or pointing us towards having a renewable system or focusing more on renewables with gas definitely one of the parts. And also, we are looking at solar. We have parts of our country, like the Northern Cape, very close to Namibia, which is almost a very arid land. So, there they’re looking at solar, looking at wind, looking at hydro, and all other things as well.

Moderator

They have strategic reserves. South Africa through this fund has strategic reserves for oil and did you say for white products? So, when the chips are down, you open your reserves. Your Excellency, strategic reserves. So, bring the oil to the surface, we know where it is. We don’t need technology and financing to use it, as part of your very bold narrative change.

For a long time, it was all Nigeria, Algeria, Morocco, Egypt, recently Ghana, you had Mozambique, very big, Tanzania on the flanks. But the next big deal for Africa, as we are hearing, is Namibia. Speak to how NAMCOR is positioning Namibia as the next energy leader?

Athony Chatu

Currently, we are a net importer of electricity, and NAMCOR plans to play a very important role to ensure that Namibia becomes a net exporter of electricity. Already, we are partnering with a company called BW Energy, who are operating the once stranded 1.3 TCF of gas, which was discovered in 1974 offshore Namibia. However, we expect by the fourth quarter of this year to reach FID on that project. And by 2027 we’ll start production. We will start with around 400 megawatts gas to power plant, which will eventually be upgraded to around 800 megawatts. And, leveraging on the new oil and associated gas discovery, we find that we have more gas available offshore Namibia. And the discovery keeps on coming. Just this year, another discovery came online. So, we expect this to increase our capacity. Right now, the government is upgrading our power transmission lines to Zambia and to South Africa. So, in the near future, we will be able to support South Africa. Right now, we are importing power from South Africa, and also from Zimbabwe through Zambia. So, we intend to position ourselves in such a way that we will be able to provide power to our neighbouring countries, Botswana, Zambia, South Africa and Zimbabwe. So, in terms of renewable energy sources, our country is positioned in such a way that we have the best place to produce wind power and also solar power. The government has embarked on several projects which we are currently piloting, which has to do with green hydrogen. So, we will produce the energy from renewable resources and produce green hydrogen that will be exported. So, our company plans to play a very important role in this green hydrogen space. And we think that the position of Namibia as a net exporter of electricity is well established.

Moderator

Gambia is still really at the more infantile exploratory space. But, Baboucarr, you’re trying to explore to produce what the world is saying we want to move away from. How does that feel when you hear people talk about energy transition relative to energy security for Gambia?

Mr. Baboucarr Njie

 When we gained independence, we realized that agriculture was the mainstay of the economy, and we did very well in agriculture. Then next, we realized that we have to train our populace, and the first government ensured that access to education was very high. A critical mass of people was educated even though we didn’t have a university. Most of our children went to the sub-region, Ghana and Senegal and Nigeria to name a few. And of course, Britain and the US. And then over time, we had a very, very strong civil service. This country that was called ungovernable after a decade became a beacon of hope. And we’ve had Nigerians, Ghanaians, Liberians coming to The Gambia to understudy our civil service. That is how we started. And then came tourism. We developed our tourism sector because of the peace and tranquility in The Gambia. Our former president, well, the founding president ensured that peace reigned in The Gambia, and we had the African Centre for Democracy and Human Rights to be headquartered in The Gambia at the material time. So, because of the peace and tranquility, we were able to leverage on it to expand our tourism sector. And then tourism became the mainstay of the economy. Well, moving on, there became signs of oil discoveries in our neighbouring countries because we belong to the MSGBC basin, and then in the recent past, we’ve seen big discoveries in Senegal and Mauritania. Then government decided to reset and say, okay, why can’t we think about oil and gas? And then GNPC came into being as the Gambian National Petroleum Corporation. We were incorporated in 2014 but well established in 2021. But then because of that Gambian spirit, we ensured that we train some of our best brains in oil and gas, geology, and geoscience to get prepared for this eventuality.

Currently, if you’re looking at energy, electricity access rates, we are almost 70%. And we are moving very fast to develop our rural electrification. And in terms of diversification, we’ve signed off to the existing ECOWAS policies on renewable energy, on energy efficiency, and of course, looking at the 2030 targets and then marching on. Right now, we have started developing renewable energy parks, solar parks for that matter. We are looking at green hydrogen, you know, because some of us were opportune to be involved in establishing ECOWAS green hydrogen policy. We are also looking at wind farms because we have a coastline, very rich in wind. Moving on, like it has been a common statement, well, until yesterday, that gas should be considered the transition fuel.

In the early seventies, there were some exploration activities in The Gambia, and then traces of gas were developed, and some of those wells were sealed. But with the recent discoveries in Senegal and Mauritania, given the GTA project, we decided that we can start looking at gas prospects. In doing so, what we have done is to sign partnership agreements with Senegal and also Mauritania. And currently, we are understudying them, so we don’t want to be left behind in the energy transition. So, we have big brother Nigeria. Last year we signed an MOU with NNPC, and which we hope will yield a lot of dividends because like I said, we have a trained workforce. We have a very robust regulatory framework. We also have a petroleum commission, which is doing very well, even though it’s also in its embryonic stage. And in terms of policies, we are very flexible. And government of The Gambia is committed to attract all the IOCs who are interested to know that a lot of the de-risking has been done because of the discoveries in Senegal and Mauritania, and Gambia is ready for business.

Moderator

 Gambia is not just looking at the conventional sources of energy but to broaden their base, they are also looking already at the renewables and the opportunities around wind within the country.

I would like to open this conversation up by inviting comments, clarification questions from the audience.

Audience Question

My name is Temi George and I’m the head of energy studies at the African Petroleum Producers Organization. My question is for Madame Fatima, you said you are working hard to make LPG affordable and all that, but my question is here in Nigeria, a high percentage of the women still cook. They don’t have access to modern energy. What are your strategies in ensuring that LPG is available and the cooking appliances are affordable, especially in the rural areas?

Audience Question

 My name is Daere Akobo. I’m the chairman of Pana Holdings. My question will be, what is capital and where are the capitals going to? Now that we’re setting up an energy bank, what are we doing to get a technology bank? I fail to see the universities, I fail to see the technology people, there is no science and technology minister here. How do we combine this?

Audience Question

The 1.5 million tons of LPG, my question is to the LNG representative, is that for the country? Is that what the country produces or is that what Nigerian LNG produces? I mean, we’re very concerned really about what the local production of LPG is because there’s also a lot of import of LPG. The figures that I have are very clearly not those figures from NLNG. So, you probably want to clarify. My name’s Toyin Akiotun.

Moderator 

I would like Dr. Kwame to speak to the conversation around capital technology and people and what we need to do.

Kwame Baah-Nuakoh

 I’ll start with the last point about the universities. If we are building capacity, we cannot do away with the relationship between industry and academia. I came from academia into industry, so I understand the issue he raised. So, I’ll use an example of what we have done since 2017. We set up four professorial chairs in four of our big public universities. And my job then as a general manager of sustainability and stakeholder relations was to fund these professorial chairs to the tune of a million dollars over a four-year period for each of them. So, $250,000 given to each of these universities. And the job is to make sure they upgrade their laboratories and their teaching equipment. Because when I joined GNPC, we were spending over 3 million pounds a year on 26 students studying in foreign universities. And I thought that was not sustainable. But then we also realized that there’s a gap in terms of the qualities that our universities could produce. So how do we do it? How do we bridge the gap? You cannot just send the students to the university and hope to use them later if they have not been trained with the best equipment. So, the idea was to start equipping these universities. So, we need to put our money where our mouth is.

In terms of where the capital will come from. I still believe that Africa has the money. I’ll show you where you are investing your funds. $64 billion Sovereign Wealth Fund of APPO member countries invested outside the continent. The money in your sovereign wealth fund, where do you invest them? You’ve been taught that the safest place to invest them is in US treasuries, which gives you less than 2% per annum return. The argument is that we are investing, we are saving the money for the future generation. But if we invest in let’s say an airport or whatever, isn’t the future generation going to benefit?

Moderator

I will yield the floor to Fatima, who is also a finance person to speak to the two questions on LPG.

Fatima Adanan

 I do agree with you that a lot of women, and probably the majority of women in Nigeria today, do not have access to the gas. What NLNG has committed to do is to make the LPG available in-country. So even though our requirement in Nigeria is much larger than what we are producing at the moment, but as NLNG is growing, we will be able to produce more. And what it means is we’re going to be able to put into the stream more LPG for utilization by Nigeria. Now, what we expect the government to do to support this is to educate the women about gas and safety.

Quickly, the question from Toyin. 1.5 million is our own production of 2023. So, this number is from NLNG. Nigeria requires a lot more. So, importation will be ongoing. But as NLNG also grows, we will also be able to provide more.

Moderator

Some studies show that Nigeria’s demand for in-country gas is over 5 million tons and NLNG is doing 1.5. You see that there’s a deficit, which you have to meet via importation, unfortunately.

Audience Question 

My name is Latifa Isa. I produce Biodiesel from Jatropha. Apart from access and the fact that government has been doing a lot to educate women in rural areas to use gas, the problem today is about affordability. Even over 5% of users in the last one year have moved back to traditional cooking methods. I’m happy that NLNG is now using a hundred percent of its production in-country. But what about the issue of price? Even those who have access have now turned back to traditional cooking methods because we also produce a cooking stove that uses briquettes. The numbers of people who are trying to get alternative sources is increasing. What are we doing about gas? Why are we using international market price for gas that is being produced in Nigeria and paid for in Naira?

Audience Question

 My name is Mohammed Othman from AGIP. She has addressed the part of affordability, but also there is delivery. I think also the delivery is making the cost go high. So, we should also find a way to see how to deliver gas, maybe through piping. .

Audience Question 

My name is Tuoyo Aribo. My question goes to the man from GNPC. I’m just curious, how would you describe power sufficiency in Ghana in terms of generation and distribution? And in that configuration, how would you apportion what percentage is generated from the gas projects you talked about and what percentage comes from an external sources such as the West African gas pipeline?

 Fatima Adanan

The question of affordability, I hear you and I understand what you’re talking about. What you also have to remember is we are not the sole producers of LPG in Nigeria. There is importation coming in. Because a lot of LPG was being imported, we were looking at an internationally stated price. And then we walk it back. So, take away the charges of shipping and all the things you need to bring them in. And then we set our own prices. Now, in that respect, it means that NLNG prices will likely be very much more reasonable than the imported LPG. But unfortunately, because we are not selling directly to the downstream, we are actually selling to marketers, marketers will likely have a portfolio. So it may be that the marketer has some volume from NLNG and then they also buy some volume abroad. What they will do is they will tend to price it along the line of the imported one because that is the more expensive one.

In terms of delivery, like I said, we tend to be producing and sending to depots. So, what is happening is we are not the end distributor. So, at NLNG, the way we are set up, we are set up essentially to export, but we actually bought a vessel to be able to bring LPG into Nigeria. So, because of the way we were set up, we had to find a way to bring the LPG into Nigeria, but we are limited to taking them to the depot. So, in terms of delivery, and this is why this is such a wonderful place to have a discussion, people need to take up that delivery position. Investors like you, companies, indigenous companies, this is your chance.

Moderator 

There’s a perspective from Ghana here. Let’s hear from Dr. Kwame with respect to how you’ve managed to put the price at an affordable level for people.

Mr. Kwame Baah-Nuakoh

We found out in our system that most of the women were not adopting it because of the initial cost of the cylinder, which was quite expensive for a poor market village woman who was using firewood to afford the cylinder. So what Ghana is introducing is the cylinder re circulation system where you don’t need to own the cylinder; the sellers own the cylinder. You are only paying for the gas. So, when it’s finished, you take it back to the depot and pick a new cylinder. You only pay for the gas. That affects initial adoption. And once they adopt it, it becomes easier to convince them to continue.

So maybe I can quickly move on to power. From the Ghanaian space, most of our gas is produced in the western part of the country and we’re hoping that we’re working with the West Africa gas pipeline so that there can be gas transmitted through that pipeline from the east to the west when there’s a shortage so we have inter-connectivity and reverse flow. That’s the way we do that. The real challenge with the gas to power system is basically finance. How do you finance the production? And once it is produced, GMPC is the one who has signed up the agreements to buy the non-associated gas. We said we give it to the independent power producers, they produce power and then send it to the electricity company, which then is supposed to distribute and collect the money. Then the issue begins, the collection of the money then becomes an issue because everybody else on the value chain is waiting for one company to collect the money and then get everybody paid off. So, our real challenges are more of the collection of electricity that has been consumed to be able to pay.

Moderator 

Somebody produces, somebody transports, somebody sells. Somebody’s looking at how to collect.

Contribution

My name is Oladunni and mine is more like a contribution. I have listened to the conversation around LPG and everything still boils down to the fact that there is high demand and demand is higher than supply. So, the opportunity in there is for us to look at how we can then close that demand, close that gap, and that is processing. I’d like to say a big thank you to everybody that has gone modular refining for oil. But guess what? The technology people which we try to highlight are currently also creating modular gas processing plants that they’re going to start shipping to Africa for us.  I was privileged to be at one of those plants about two months ago and I saw it and they’re bringing it to Africa and I asked the question, so why can’t you just come and produce, come and couple this gas processing plant because the plant was going to start producing cooking gas and all that. So, the message is let’s start looking at how we can actually get those modular processing plants. Our students can actually do it because I went through the entire plants. They are just engineering stuff we can do.

Audience Question

My name is Ahmed Matar from Iraq. I actually have two questions. We heard about the transition and the climate change and the effect of fossil fuel. As oil-producing countries and oil-producing organizations like OPEC and APPO, should we fund scientific studies to see the facts, the impacts of fossil fuel on the climate and whether it’s really affecting climate change or we are on the dawn of a new ice age. That’s number one question. And the second question for Natalie, South Africa is a net importer as you said, and South Africa, as I know because I worked in South Africa for four years, has three refineries and all three of them are out of service. And my country is interested in exporting crude oil to South Africa, providing that there are refineries there in South Africa. So how long will it take for South Africa to build 1, 2, 3 refineries?

Audience Question

My name is Livinus John. The question is to Natalie on this Strategic Fuel Fund. Is this fund available for access to people outside of South Africa? If so, how easy can this fund be accessed?

Audience Question

My name is Ranti Omole, Vice Chairman of PETAN. Just want to talk a little about the gas penetration to the women. I know of the initiative Smart Gas where about five to ten kilos gas cylinder with a cooker inserted is given out in collaboration with local governments. Can the NOCs and the government join in to support more these kinds of initiatives so that gas penetration can be enhanced?

Moderator

Natalie, I hope you got the two questions.

Natalie Taft

As I said in the beginning, the SFF fund is a government fund for the good of South Africa. So, to put it simply, it is not accessible for outside areas or for anyone else, it’s a tool that the government of South Africa uses to create stability and to fund infrastructure projects within South Africa for the good of the nation.

Yes, you are correct. South Africa, previous to 2020, had six refineries; three of the refineries are now not in working order. And therefore, the net importation of fuel in the country has gone up. This is a huge problem for us, hence again the look or the great drive to increase our energy mix and to make sure that we also bring other sources of energy on board. But your question on how long it’ll take to bring the other three back on board, one of it will not come back on board. The second one is in the process of being refurbished. The third is still at the discussion stage.

Moderator

Fatima, you want to speak to the smart gas?

Fatima Adanan

Just to speak to the financing. And this is a call to our ministers and the people in our governments and all the agencies that provide finance. For you to create any kind of economic development, it is very important that you are able to access finance. Those upstream fields need to be financed to be released for monetization. So, I was very excited yesterday to hear about the Africa Energy Bank. Our government should also attempt to access the global funds that have been put together for climate finance.

Moderator

Distinguished ladies and gentlemen, you’ve heard from the panelist and they have advocated that we become completely unapologetic about our narrative and stop playing the victim. There’s no more time left for Africa to continue to see ourselves as a victim. Let us define our own narrative, starting from defining what our own fuel is. We don’t have any other source that we want to advocate for energy transition. But this panel advocates energy collaboration for Africa right on the back of AFCFTA or whatever is possible.  Let us collaborate and fight that energy poverty that has been troubling Africa all these years. We need to be bold. The challenge is now on Africa. How do we become the new world order?

Closing remarks by the Honourable Ekperikpe Ekpo, Minister of Petroleum Resources (Gas).

Distinguished ladies and gentlemen, the moderator and the panelists, it’s been a wonderful session sitting down and listening to you. Of course, what I intended to do has been done by the moderator. I appreciate what he has done. Thank you so much. What I need to add here is, whether we call gas a transition fuel or a destination fuel in Nigeria, the President has declared it as a transition fuel. You never know when it’ll end. So, if it is transition. Whenever it comes to an end, that is when we will know we have come to a close.

Panel Session 5: Nigerian Petroleum Producers’ Forum

Theme: Innovation, Collaboration, and Resilience: Empowering Independent Producers in the Dynamic Energy Era

Opening Keynote Speech by: Mr. Abdulrazaq Isa, Chairman, Independent Petroleum Producers Group

Mr. Abdulrazaq Isa expressed his pleasure in setting the context for the panel session, thanking the esteemed panelists for their participation and insights. The theme, “Innovation, Collaboration, and Resilience: Empowering Independent Producers in the Dynamic Energy Era,” highlighted the crucial role of Nigerian independents in shaping the nation’s energy future.

Mr. Isa emphasized the need for collaboration and decisive action in light of current challenges. He highlighted the importance of reversing the production decline and meeting national production goals. The recent divestment deals by major international oil companies (IOCs) presented an opportunity for Nigerian Independents to boost production levels. He stressed the importance of timely conclusion of these transactions to derive optimum value and boost national oil and gas production. The panel session aimed to explore strategies to empower Nigerian independents, including policy interventions, sustainable financing frameworks, security enhancements, technology transfer, and asset integrity. Mr. Isa encouraged active participation in the session to chart a path forward that empowers Nigerian independents and contributes to a sustainable energy future for Nigeria.

Special Remarks by: Mr. Osagie Okunbor, Country Chairman/CEO, Shell Companies in Nigeria and Chairman, Oil Producers Trade Section

Mr. Osagie Okunbor expressed appreciation for the opportunity to speak at the summit, emphasizing the importance of collaboration, resilience, and innovative strategies in the energy industry. He highlighted Nigeria’s significant growth opportunity in the oil and gas sector, with vast untapped reserves. He noted the global shift in supply dynamics, creating opportunities for new markets and emphasizing the need for collaboration and innovative strategies. He discussed Nigeria’s energy strategy, focusing on utilizing gas as a transition fuel and addressing challenges associated with transitioning to renewable energy sources. He highlighted the decline in investments and oil production, emphasizing the need for all stakeholders to work together to sustain momentum.

Mr. Okunbor mentioned the challenges faced by the Nigerian oil and gas industry, including high business costs, insecurity, and fiscal challenges. He stressed the need for attractive fiscal policies to develop the country’s gas resources and maximize production from existing assets. In conclusion, Mr. Okunbor emphasized the importance of collaboration among stakeholders to address industry challenges and unlock Nigeria’s energy potential. He encouraged coordination and working groups to achieve sustainable goals in the industry.

Keynote Speech by: Engineer Gbenga Komolafe, FNSE, Commission Chief Executive Officer, Nigeria Upstream Petroleum Regulatory Commission

Engineer Gbenga Komolafe addressed the audience on the topic of innovation, collaboration, and resilience, empowering Nigerian producers in the Dynamic Energy Era. He began by expressing gratitude to the Minister of Petroleum Resources, President Bola Ahmed Tinubu GCFR, and the Honourable Ministers of state petroleum resources for their leadership and dedication to industry reforms. He also thanked Brevity Anderson for organizing the Summit.

Reflecting on the theme of the summit, he highlighted the importance of staying abreast of developments and challenges in the oil and gas industry, particularly regarding regulatory frameworks and investment strategies. He emphasized the commission’s role as a regulator and business enabler, working collaboratively with industry stakeholders to attract investments and ensure energy security and sustainability in Nigeria. Engineer Komolafe acknowledged the challenges faced by the industry, including the decline in investments and oil production, as well as the changing energy map and increasing competition from regional players. He emphasized the need for collaboration among stakeholders to address these challenges and unlock Nigeria’s energy potential. He highlighted the commission’s initiatives to improve transparency in hydrocarbon accounting, monitor work programs, ensure financial viability of operators, and streamline regulatory processes. He also mentioned the commission’s efforts to vacate entry barriers in the upstream, midstream, and downstream sectors to attract more investments.

Engineer Komolafe shared success stories, including the approval of 51 Field Development Plans (FDPs) between 2022 and 2023, expected to attract a total investment of about 17 billion USD. He also mentioned the commission’s efforts to achieve zero flaring and net zero carbon emissions by 2030 and 2060, respectively, through the gas commercialization program. In conclusion, Engineer Komolafe echoed President Bola Ahmed Tinubu’s words that Nigeria has never been more ready for business and offers hope for Africa. He reassured the audience of the commission’s commitment to collaborating with industry operators and stakeholders to ensure optimal development of Nigeria’s petroleum resources for enhanced energy security, economic prosperity, and a sustainable energy future.

Panelists:

1. Adegbite Falade, CEO, Aradel Holdings Plc
2. Elohor Aiboni, Managing Director, SNEPCo
3. Demola Adeyemi-Bero, Managing Director, First E & P Development Co. Ltd
4. Matthieu BOUYER, CEO, TotalEnergies
5. Shane Harris, CEO, ExxonMobil Nigeria
6. Ainojie ‘Alex’ Irune, Executive Director, Oando Plc & COO, Oando Energy Resources.
7. Cosmas Iwueze Director, Joint Venture, Chairman/MD, Chevron Nigeria
8. Oritsemeyiwa Eyesan, Executive Vice President (E & P), NNPC Limited

Moderator: Mr. Adesola Adebawo, General Manager Government JV and External Relations, Heritage Energy Operational Services Limited

Moderator

 The Nigerian oil and gas industry landscape is dynamic. It’s witnessed multiple changes including regulatory, political, social, and investment appetite changes. Strategic investment decisions have played out in the form of large-scale divestments by IOCs from their onshore assets, both as responses to regulatory changes, as well as other factors such as operational risk management, portfolio rationalization, fiscal uncertainties, and climate change. The impact of these has included both intended and unintended consequences. While the process has led to the growth and increased participation of indigenous companies in the industry, certain challenges have continued to inhibit the full harvest of benefits from the changing landscape.

I’d like you to look at the subjects and the seat of our industry, the landscape. Now the opportunities are open for local players. What are your opening thoughts?

Mr. Adegbite Falade

We’ve come as a country with a total production of about 2.5 million barrels per day in 2005 to one where we are doing barely half of that as at today. The challenge is not because the reserves have disappeared. Our geographical basin still remains as prolific as ever. But there is a strong play of above-ground issues arising from some of the factors enumerated by our moderator. These have played significantly in dampening what our capacity can be and has been. Yes, there is also the element of underinvestment that has taken place and the landscape has changed significantly. 60 years ago, we had barely 10 people who were operators in our landscape. 30 years ago, we had probably the onset of indigenous operators. Today as we speak, we probably have nothing less than 40 to 50 different operators. So, the landscape has changed. And I guess the question is how do we get ourselves back? And that’s what we’re going to be looking at today. A lot of the issues that are plaguing us and limiting the realization of our subsurface potentials are extremely local and that’s part of the reason why the international companies are exiting from the onshore terrain, which provides a very huge opportunity for creative, dynamically minded local indigenous operators like ourselves to unlock that value.

Moderator

 You lead SNEPCo an IOC member of the Shell family. Shell is one of the biggest entities in the news in the divestment program. Your thoughts on the state of play?

 Mrs. Elohor Aiboni

 We already know that the world we live in today is changing, and we have defined gas as our transition fuel. For us to be able to close that gap, it’s only critical that we’ve got players in that space. Gas is capital-intensive, and today the players that can actually do gas projects are majorly the IOCs. And for us to be able to close that gap, we’ve got to have the right fiscal terms. So, it’s no news that Shell, as a company, is moving towards deep water and gas. The reason is not far-fetched; for us to be able to meet the demands of the growing needs of a country and a continent like Africa, we’ve got to begin to do an energy mix. And your energy mix comes with a lot of investment. We know the challenges we have in our country; we’ve talked about it in several conferences, and it is absolutely clear to everyone why the IOCs are moving into deeper offshore and gas. So, it’s also important, in the interest of our country, that we’ve got independent players. They understand the local terrains, they’ve worked tirelessly with the international oil companies. The beauty of it is that most of the independents came from the IOCs. They built capacity, they can do the work, they are smaller, they are nimbler, and I think it’s the right time for us to give our local players a chance to develop that space.

Moderator

 You lead First E&P, one of the success stories of indigenous participation in the industry. What are your thoughts on the layout of things at the moment?

 Demola Adeyemi Bero

First, I think it’s about responsibility. And why do I say that? There’s the wider dynamics of energy transition, emissions reduction. But then, if you come back to Nigeria, microeconomics, social revenue to government, there’s a whole plethora of things where we know Nigeria is not where it needs to be. And I’ve always been of the view that oil and gas is a major contributor to making that change. So, when you ask me what’s my view, I think it’s really taking on that challenge of the responsibility. The IOCs are moving to a terrain where their expertise is. So mature assets they tend to move into where technology, major capital, deeper waters, and integrated gas plays. And hence what I see is the responsibility for Nigerian independents to take that mantle up to actually contribute to production growth and what I would call the heartlands of the Nigerian basin. You know, there’s major resources in deep water, but the majority of our resources still sit in the onshore and the shallow offshore. If Nigeria wants to get to two and a half, 3 million barrels a day, easily 50% of that must come from those heartlands. And then you talk about energy transitions. You know, the beauty of this is that gas is going to be a focus. There’s a responsibility we now have to make for this whole transition thing to contribute to that Nigerian growth.

Moderator

I’m coming to you from the standpoint of an IOC. What are your thoughts on the change of guards that’s ongoing?

Mathieu Bouyer

From our standpoint in Nigeria, it’s not a problem of resources. I mean, the figures have been presented. There are a lot of resources everywhere. It’s a matter of how we manage collectively, together collaboratively, to bring them out of the ground. There are enough resources, I think, for IOCs and for local companies. Clearly, what we need is just to grow the pie, to grow the cake, to make them available and productive. As far as we are concerned at TotalEnergies, we are on all terrains. And we have been there for more than 60 years, investing massively, significantly in the last 10 years in particular, to grow the production of the country in oil and gas.We have more that we can put on stream in our production in the coming five, six years. Those investments need support from the fiscal standpoint, from our partners, from the authorities to be able to develop them successfully and grow the production, which is, I think, the mandate from the regulator and from the highest authorities in the country. And we are keen to do that, of course, while maintaining the pace on reducing emissions on our base production and on having emissions-efficient new projects coming on stream. This is a challenging environment that we’re in today, clearly. And we will need the collaboration of all parties in the industry in Nigeria to make them possible, looking forward. This will be the condition to bring competitiveness, this will be the condition to bring investment back in Nigeria, and I think at the level Nigeria deserves. To the point that was mentioned before, I completely concur on the fact that with the turning point that we are seeing today with more and more indigenous companies taking the leadership on some assets will come a great responsibility as well, vis-a-vis oil production, gas production, and vis-a-vis emissions production because there’s still an ambition to reduce emissions in our industry in the coming years and decades. So, I think it’s an exciting challenge that we all have to tackle collectively for the success of Nigeria.

Moderator

ExxonMobil is not new to the transition landscape. You’ve had your bit of experience in the transfer of power if it can be so called. What are your thoughts around the dynamic landscape in terms of how independents are posturing to take over from IOCs on onshore?

Shane Harris

Let me first anchor it in the fact that we have a long and proud history here in the country, nearly seven decades. And we intend to be here for a lot more time to come. I want to circle back to comments from some of yesterday’s sessions. In no way is ExxonMobil planning to exit Nigeria. It’s a proud history that has evolved over time through many dynamics, be it changes to geopolitics, changes to market factors and environment, changes to the macroeconomic environment. That’s the ups and downs of the business that we are in, and the one that we have to navigate. And at the core of this panel around resilience, collaboration, and innovation is the need for ourselves as operators or as IOCs and the government to collaborate, to innovate, to demonstrate that resilience, to be able to navigate through all those challenges that are placed ahead of us, including the transition. So, you know, we’ve heard through my colleagues already, that the challenges are pretty significant that we’re facing down right now. So, there’s no greater point in time that collaboration and innovation are required for us to be successful. Now, a company like ours brings to bear not only a lot of local experience and capability but also, we draw upon that global enterprise, that experience and capability and learnings that we’ve applied everywhere across the world. But of course, at the heart of enabling that to take place, are the tough decisions that also need to occur to come along with that. That is, how do we create an environment that has improved cost and schedule performance for major projects? How do we enhance security around our operations? How do we provide that stability, that predictability, and consistency of fiscals and the regulatory environment that we’re in? So, to truly establish an attractive investment environment also requires, among many things, the ability to see visible and tangible actions that are associated with a topic that’s come up a few times today, which is the current outstanding divestments that are out there. It’s not new to anyone here that the shareholders of Mobil Producing Nigeria require support from all stakeholders to resolve legal issues that have held up that divestment for what now is about 18 to 20 months. And it’s imperative that that’s concluded and that clarity is provided to everyone involved. And then there are some important outcomes or objectives that are associated with that. One, it immediately provides some revenue to the government that comes along with such transactions occurring. It also unlocks potential growth, not only in existing fields but of course in new fields, echoing some of the comments that have been made already, supports the development of our indigenous operators. And for me, what’s really important is it helps resolve a significant amount of uncertainty that currently clouds thousands of people. These are our employees, our contractors, the communities in which we operate, the greater organism that supports our business around our business, that have had this uncertainty for some time now. So, enabling that to happen, that enables an organization like ours to pull on the full strength and support of our global business to really focus on how we can most contribute to the prosperity and future of this nation. And that’s in the deep-water business.

Moderator

Oando is a major beneficiary of the landscape that’s opening up for local players. What do you see when you look into the energy crystal ball? What do you see?

Ainojie Alex Irune

There are local problems largely that plague our efficiency. It’s not a portfolio play for us. See, any of the guys can put their money where it makes the biggest bang for its buck. We don’t have that option. We’re fully committed. Not to repeat what has been said, I think the actions required to take this forward are probably what I’m going to focus on for most of this discussion. The first thing is a higher calling for every single one of us as business owners, regulators, government. We are now presently facing problems that we should have dealt with 20 years ago. I think the entire oil and gas sector is in a state of emergency. We can dance around the issues and talk about an approach; we have to act now. The last time I was on this stage, I spoke about being impatient about developing our oil and gas sector and creating value for our people. Today, we face as simply as a currency escalation. And the one single industry that can provide the buffer and the foundation is ours. So, for me, those are the things. Local value creation is the last point I’m going to make. When these assets transition to local independents, all of that value stays in-country.

Moderator

You’ve had your experience with divestment. Now, as someone who is neck-deep in the industry and a major player, your view on independents posturing to take over from whoever is willing to give up. What do you think?

Cosmos Iwueze

This panel session provides an opportunity to talk about those factors that we need to embark upon to empower all the stakeholders, not just the independents. All the stakeholders need to be empowered because that’s what is required to grow and develop the energy sector. The size of the pie is big, very big. Everybody can participate. What we should all rally around is how to make that work. At Chevron, we pride ourselves on providing and delivering affordable, reliable, and ever-cleaner energy. And that’s our calling, that’s what we do. Capital investment is key to empowering the stakeholders. Technology is key. People development is also important. Collaboration is very important. Capital investment can only happen if we create the environment for that to happen. For us in the energy business, we’ve been talking with the government around that, thank goodness the government has continued to hear us and listen to us. Recently, the leadership of NNPC as well as NCDMB helped with reducing the contract cycle time from what used to be about 38 months or so to six months. During that discussion, we had told them about what it takes to make sure that that works very well, which is increasing the delegation of authority. Right now, 500,000 dollars is what you need before you start going for approvals. We have recommended for it to go to more than that. And the team has worked it out, and I’m glad that one of the executives of NNPC is here. That team has made that recommendation to take it to a higher number. The same with the contract duration. So those are the kind of things that we need to be talking about. The other thing we are looking at from that point of view is the cost of doing business. A lot of work has gone into that space because we still have so much plethora of fees that’s really causing a problem for the industry. And we need to begin to clamp down those things because all of us go to an enterprise level to borrow, to ask for these funds so we can compete. They should look at that and at the same time look at the security disposition. Those are the key factors that if we handle very well, could help us to even harness these opportunities that we have.

Moderator

You sit in a particularly peculiar place as Executive Vice President in charge of upstream. This is all in your backyard. With all of these changing landscapes, do you think the independents are ready? Do you think there are other factors that need to be put in place?

Oritsemeyiwa Eyasan

It’s no news that most businesses are moving from the basic bottom line to the triple bottom line where they’re concerned about profits, people, and the planet. We’ve done several rounds of divestments in the past, and in the industry, if you want to measure success, there are some basic indicators that you will utilize: production growth, reserves growth, asset integrity, and asset value growth as well. So, these are some of the basic indices that you will evaluate. If I were to roll back the prior investment initiatives we did, and to scale or to evaluate the actors in the process, I think I would be untrue to myself if I say everybody has done very well in any of these indices. We acquired assets, but today we are worse off in terms of production than where we were when we did the acquisition, in terms of even the reserves, because we’ve not been able to produce as we should be. We’ve just been flat on the reserves and in terms of asset integrity for some of those assets, we are in a worse state. But that is not to say that even at the time of acquisition, the assets were in good state. If I were to do an evaluation on how we have performed, obviously there are success stories from the indigenous environment, but there are obviously some gaps with the divestments that were done. I believe if we want to make progress going forward, I totally agree with my panelists to say that we need to grow the pie.

And if the IOCs see their niche in the deep offshore, then definitely somebody has to step in and why not those whom we have groomed in the industry to step in. So, we totally agree that yes, there’s a need to grow the pie. Yes, there’s a need to give our indigenous players the opportunity to play in the industry and take advantage of the opportunity that is currently being presented. But then we must step back to evaluate the gaps, do a look back on where we have fallen short. Most of these assets were procured at whatever costs that were presented and we took over those assets and we were not able to put one incremental barrel because we were totally over-leveraged. Now, in terms of even the people running the assets, not all the indigenous operators have done well in building capacity and capabilities indigenously; we are still relying on what the IOCs presented to us. So, there’s still a lot of room for improvement.

Moderator 

Independents will always bump into one thing or another. Resilience is key in manning what’s been handed out. What do you think independents need to do to build the resilience required to make a success of these divested assets?

Adegbite Falade

For independents to be very successful in this play of stepping into where the majors have divested from, especially in the on-shore terrain, resilience is very key. And I’m going to speak to that from three key perspectives as an operator. Aradel Holdings has been a very resilient company. We started off with a marginal field, when production was barely 1,000 barrels. Today it’s 14,500 barrels. That is resilience, that is growth, and not just in terms of liquid production but also in terms of gas production and even further investment in refined products. That is resilience, that is growth. There are three key factors that have contributed to this, and I think those factors are worth replicating for other operators as well. The first one is the governance model. Our operation is a sole risk model, and we think it’s ideal for the kind of terrain where we’re operating. It is not bogged down by the bureaucratic approval process that dominated the IOCs when they divested. We need to recalibrate the governance model by which independents run the business or we would just be having mismatched horses for courses. And I think that’s very important. The second one is that we deliberately choose to have a multi-sector play. We are integrated across the value chain. And what that does is it provides natural hedges for the fluctuations in our industry. Times when we were unable to realize export revenue, but it’s our investment in the domestic that kept us going, so that helps us to be resilient. The third one is building redundancies deliberately in your operations, redundancies physically to the point of sale, redundancies to multiple markets, and doing that within the ambit of what you can do directly by yourself and what you can do in partnership with others. One of the key redundancies we have built is about the evacuation of our product to determine for the export sales that we have. For the moment where our primary export outline, which is the TMP pipeline, has had issues, the redundancy we have built in terms of the alternative good evacuation in partnership with New Cross has been a lifeline and a mainstay for us. Those sorts of redundancies helped. And let me just say that as a result of this, in 2023, we experienced a production growth of 45% over what we did in 2022, just because of these redundancies. So, the way to go is to build resilience, be deliberate about the path that takes you to the market, reevaluate the governance structure as many of the dependent models that we can convert to service so that they can take very nimble quick decisions and ensure fast execution will be the way to go.

Moderator

Effective governance, integrated multi-sector approach, building the right redundancy. Now, this is what we need for resilience among the independents. But Oritsemeyiwa said they didn’t do well. This is inward-looking, but from the regulatory standpoint, what do you think is required in the regulatory landscape to support the capability of independents?

Elohor Aiboni

Regulations are supposed to be enablers for business performance. And every business is there to be competitive in every country. The regulatory framework can be very complex, but I think in Nigeria, it’s not just about the complexity, it’s also about having multiple regulatory agencies to deal with. Yes, that actually creates a lot of issues for the industry. And this is not going to be peculiar to just the IOCs but also for the independents. We need to be able to do that end-to-end review of mapping the regulation to avoid regulatory overlaps, and also to address some of the ambiguities that we see today. And there are processes to help. It has started, but we can further improve on it. We know that there’s Red Tech that is now being used in several countries that can also help us with addressing this. The second thing for me is, it’s not only about the multiplicity of regulatory agencies, we also have issues with execution. For the independents, they took loans to buy these assets, so they’ve got to pay back. But the regulations we have today, we’ve got to make them such that they can incentivize the independents to begin to think of growth from the onset. And the structures and policies would help in that case. The last one for me is reviews of policies. They are necessary. But they should be done to aid doing business. In Nigeria, we always talk about the ease of doing business, but when such reviews harm investment, there’s no way we can attract investment. So, we need to look at that. We are not saying it’s not good, it is good from time to time to do reviews, but let it be with the intention to drive competition in the business industry.

Moderator

Multiple regulations, complex regulations, or friendly regulations. The chief regulator says, we are happy to work with you to look at all of this. So, it seems that the conversation is moving in the right direction.

Now, one of the key factors that independents are worried about is the subject of financing. From your standpoint, firstly, what are the financing challenges that independents face? And in your view, how do you think this can be addressed to facilitate growth and increase investment?

Demola Adeyemi-Bero

There’s a responsibility on the Nigerian independents to actually be responsible in how they operate, to actually be responsible in actually doing the work of growing production. To be able to raise finance, you have to be trust worthy. The banks and the financial institutions will after going through your asset and cash flows, will still carry out due diligence to determine your integrity level; whether you are accountable and responsible enough to be willing and able to pay back the loan. This is the biggest challenge for indigenous operators. We have been given a burden, and the burden is to grow Nigeria’s production alongside IOCs, and we have to grow it as fast as they’re growing theirs as well. You also must know the business. I mean, we took an asset, we bought 40% of Chevron’s interest in OML 83 and 85. It wasn’t producing. We had discovered resources. And in five years, not wanting to sell ourselves, but have to also pitch first TMP, we took it to 40,000 barrels a day, and I think by the end of April it will be at 60,000 barrels a day. It’s about doing the chain properly, explore drill wells, produce wells, build facilities, ensure asset integrity, and be compliant to the regulator. I must commend the regulator for having been a fantastic enabler. Let me also add, your counter-party must come to play. We’ve been lucky to have a counter-party that when we were struggling to raise finances, they stepped up because they believed that our plan was right and that we can deliver. So, when you look at all of these factors, I will say, number one, it’s about confidence in those financing entities to say, can this party actually deliver? And they look at not just the company but the individuals. Then they say, who are the counter parties? And they see a synergy between the counter-parties. When we were talking to financial institutions and an entity wanted to finance us, we were actually in the same room with NNPC. It wasn’t us doing it separately. And what they brought to the table was the confidence that they believed in this plan. And I think lastly is they want to understand that when you look for your drilling rigs and your facilities, you’ll get the approvals from the regulators and all of that. So that’s a factor. And we can’t take it away from this.

Moderator

Recently Total Energies announced that it has achieved zero routine gas flare elimination in all its JV assets in Nigeria. Now independents are moving in big, stepping into the places where the IOCs are leaving off. From your experience, how do you think independents can balance profitability with environmental and social responsibility following the footsteps of some of the success stories you have achieved?

Matthieu Bouyer

For me, it’s a responsibility that does not vary from one operator to the other. You cannot oppose profitability and respecting your communities, respecting the environment because this is the area in which we evolve. It’s a matter of respect, after all. It’s quite challenging for an operator to thrive in its business if there is not this constant care of what’s surrounding my operations, both in terms of people within the communities and in terms of the environment. Of course, it’s a matter of sustainability and resilient operations in the long run. So, I will clearly not oppose profitability and sustainability. I think they go hand in hand, and it should be the strategy, if anything, of every operator in Nigeria and even beyond. If I take one example, which is the one that you just mentioned, we actually stopped all the routine flaring in all our operations in Nigeria. And we are very proud of that. It took a lot of effort for the company. And by doing so, we invested some money, but we saved not only emissions, we saved gas. And this gas, because it is a transition fuel, is now utilized and sold on the domestic market and also on the LNG. So, we create also value out of this emission that we have saved. And, it’s good for the environment, it’s good for the country because we grow the production and we grow the value overall. And I can say that we are lucky enough to do that with the largest local company, which is NNPC. So yes, it can be done and we can balance profitability and sustainability.

Moderator

Some other countries are beginning to be very investment-attractive to IOCs, given the low cost of production and the low risk in those environments. In your view, how do you think the environment can be de-risked so that there could be better profitability, better growth for the independents as they move into taking over these assets?

Shane Harris

I think that growth also needs to apply to the IOCs as well. But it all about bolstering investor confidence. And I think one of the key elements that can really lead to de-risking is really around how do you focus a lot of attention on the companies that already exist in the country. As capital is attracted into the country, the ability for companies that already are here, that already are present, who have the lay of the land, who have the capability and competency in country, they’re the ones who can most rapidly deploy that capital for the betterment of the nation. So, I think that significantly reduces the risk, be it IOC, be it independent. So, what’s required, and I’m going to kind of talk through this through the lens of deep-water developments where we’ve talked already about the investments. There are a number of other factors that require acceleration around collaboration, innovation, to really enable those big investments to take place. And the first is the substantial regulatory uncertainties. And of course, the PIA has provided a really strong foundation for the real collaboration taking place between the regulator and the operators. We’ve been able to come to these win-win solutions that are best for everyone. And so, we need to continue to encourage that, and where we don’t see that happening, that can be an obstacle. So, you’ve got to be able to break through that. We need to agree on necessary fiscal unlocks. I mean, these are massive. The deep water is massive investments with massive risk. At the end of the day, I think we all want to play in that game. But we need to know what the rules of that game will be, and we need to know that the rules won’t change while we’re playing the game.  So that consistency and predictability is critically important. We are making great strides in the project execution and cost space. We need to see that translate to execution. And then competitive gas terms is probably the fourth area that requires significant focus. And there’s one last one, and that is time. We’ve talked a lot today around the need for investment through the lens of growth. I would just say that we need to be careful not to forget that we need investment to mitigate decline. And, you know, we’re in the decline business, simple as that. All the existing fields that are out there right now, they’re declining at five to 15%. And so, the amount of investment that’s required just to hold steady, let alone get growth, is significant. And that’s why we can’t be measuring our response in years. We need to be measuring our response in months, if not weeks, that there is a sense of urgency. If we can act now, then we can certainly create a very bright future for Nigeria going forward.

Moderator

 We need investment to grow. We also need investment to arrest the decline. Recently there’s been an announcement of three major IOC divestment: ExxonMobil, ENI, and Shell. How do we ensure we don’t witness needless delay in the conclusion of this transfer and that we ensure rapidly that the country derives optimum value from this? We’ve heard the announcement, but it’s not certain what needs to be happening.

Ainojie Irune

Earlier on I said that long-term problems have no short-term fixes. I think one of the biggest challenges we have today is the foundation. The PIA is a great base for us to build from, but what we’ve done is waited 20 years to evolve the laws of our industry. So, we are all effectively hitting this bottleneck in almost every aspect of the law. But again, a collaborative supervisor or regulator means we get through the problems. But that takes time. And this is something that we’re going to have to understand. We do need to focus on how that helps us get through the bureaucracy that typically exists in the process of closing these deals. We do need the reviews and consent to come quickly. We don’t have time. We do need to get on these assets and start working on them. I can tell you for a fact that declining production is all about operating philosophy. We are in an asset where even though we bought into the asset at a significant amount, we were not in the driving seat. Now, you must understand operators have a very big engine when it comes to the operating footprint. As these assets decline, as we just spoke about five, ten, fifteen percent in most cases, that big engine still needs to be looked after. So effectively, you are running a very huge cost base on a very low production volume. Now that in itself requires a little thinking and tweaking about how you think about your operational philosophy. And your operating methods. And you will notice that both independents that spoke about scaling up slowly, ensuring the ring fence projects delivering on time, largely sole risk, and ensuring the bureaucracy that depletes NPVs don’t exist, or at least are minimizing their project. So, when you look at it from that perspective, it’s a completely different game when you have an independent in control versus an independent as a non-operating partner. The final point is that we know everything that has been said today, and it really worries me when we come here every year to regurgitate the same things, we said the year before. I don’t know how many of you feel the same way, but I think maybe because I’m younger, I’m just impatient. We just need to act. We do need to find a higher level of ourselves to say, you know what? In one week, I’m going to deal with all the consents, in one week I’m going to deal with all the approvals, in one week I’m going to deal with this issue around procurement and supply chain delays and bureaucracy. These things can be done. I’ll tell you something. When wars are fought between countries, people sit down to negotiate issues that created the war, and they do it in less than 20 years.

 Moderator

 One of the major triggers for the divestment we have experienced from the IOCs onshore has been said to include the need to rationalize asset portfolios, particularly because of increasing operational risks. Question is, in your view, what lessons should independent producers learn from these experiences as they take over the divested assets?

Cosmas Iwueze 

Independents must make sure that they’re not going in with the mindset of just harvesting that asset. If you’re going in with the mindset of harvesting the assets just to pay the bills, then of course what you see is what you get. But the most important thing is to address asset integrity. Very, very important. Spend time on operations efficiency. And that talks about the reliability of your equipment. And then, of course, the asset integrity because some of these assets are very old when you picked them up. So, you’ve got to take good care of them. That requires you to spend a lot of money. So, when you’re borrowing money, don’t just focus on drilling more wells because drilling more wells into an asset that is already decaying does not take the waters. So, ensure you make investment in asset integrity and reliability. Of course, taking care of your security is very, very important. Have a robust system that you use to manage the security issues with all the stakeholders involved, including the community. Ensure you take care of your community. Community engagement processes are very robust. You almost have heard about a global memorandum of understanding, which gave birth to the host community development trust, as we all know it, that’s still effective today. We also involve the community in the contracting process. Engage them. The other one is around protecting the environment where you operate. Invest significantly in ensuring that you have environmental protection. Social equity is very key around the communities where you operate as well. And social governance is also important. At Chevron, we do have plans that are helping to promote these in the Delta. Together, you get where you want to go.

Moderator

Everybody has spoken about production decline.  So, the question is, what do you think we need to do to ramp up production to what is desirable? What drastic measures need to be taken? Everybody has all spoken about the urgency of now, but in your view, as the leader of the upstream sector, what should be happening now to ramp up production?

Oritsemeyiwa Eyasan 

The first thing is to address the security challenges because, like you rightly know, we’ve been inundated with major security issues. We have an architecture that the industry is currently working on, but I think we need to upgrade to something more efficient to safeguard production. That’s number one. Number two, asset integrity. Most of us are sweating our assets without recourse to the health of the asset. And as long as we continue to do that, unfortunately, we will not get the production out. I look at my numbers every day and I expect the numbers to go up, but just then I hear this asset is out because of asset integrity. So again, future-proofing our operations, setting aside a deliberate plan and the financing for asset replacement and upgrade is critical to the survival of this industry. We cannot compromise on that. Governance. Today we see people who have come into the industry who want to make quick money and that’s it. They disregard basic operating procedures just to turn around quick money to pay off debts for the asset they acquired in the past. But I tell you, if we continue on that tangent, we will kill the industry. We will not get the production. We are working with several partners to see how we can mend these governance issues that have plagued us for so long. And until we deal with that, it’ll be difficult to make much progress. But the good thing is that it’s not all gloomy. I think we are seeing the light at the end of the tunnel. We’ve held our production since January, reasonably not where we want to be, but at least we’ve held it out. And I think with the efforts being put in by everybody, we will continue to grow. And lastly, collaboration cannot be overemphasized. Somebody said we should be in the state of emergency. And I totally agree with you. It’s not about sitting down and talking about this. I think we should have a war room where we are talking about these things and setting out concrete plans on how we’ll unlock these issues rather than wait on stakeholders individually to take them on. Collaboration, collaboration, collaboration. 

Panel Session 6: Nigeria Energy Downstream Forum

Theme: Border-less Energy Markets and Investments Frontiers in Downstream

Keynote Address by: Engr. Farouk Ahmed, Authority CEO, NMDPRA, represented by: Kalu Ogbugo

Engr. Farouk Ahmed highlighted the importance of regional economic programs like ECOWAS and AFCFTA in developing markets across borders. He emphasized the need for trans-border infrastructural inter-connectivity to support reliable supply chains across African energy markets. To achieve borderless energy markets, Engr. Ahmed mentioned key enablers such as OPEC, APPO, Afrexim Bank, the prospective African Energy Bank, and the MDGIF. He emphasized the importance of increased upstream outputs and optimal midstream performance for the realization of this goal. He commended the President’s decision to reconstitute the council of the MDGIF, which will stimulate infrastructure investment in gas to power, gas-based industries, and gas to commercial. He also mentioned strategic infrastructural projects with trans-border scopes, such as gas pipelines and regional electricity grids.

In the downstream sector, Engr. Ahmed praised the President’s decision to remove the PMS fuel subsidy, which has led to the operationalization of the backward integration policy to encourage investments in local refining. He highlighted the upcoming Dangote and NNPCL refineries as key projects that will increase in-country refining capacity. Engr. Ahmed emphasized the need for a cost-reflective market and the elimination of price arbitrage within the sub-region to ensure sustainable and legitimate business practices. He outlined several investments needed to transform the Nigerian downstream sector into a regional hub, including promoting competition among operators, encouraging exports, and upgrading infrastructure. In conclusion, Engr. Ahmed assured operators of the authority’s commitment to rolling out initiatives that leverage opportunities in the downstream sector. He highlighted the authority’s review of fees and currency, emphasizing the importance of consultations with stakeholders before finalizing outcomes. He thanked the audience for the opportunity to share his thoughts and looked forward to fruitful deliberations.

Panelists: 

1. Adedapo Segun, Executive Vice President (Downstream) NNPC Ltd
2. Abdullahi Umar, GM retail and Card, Total Plc
3. Timitayo Ogunbajo GM, refinery Aradel Plc
4. Robert Dikerman, CEO Pinnacle Oil and Gas Ltd
5. Oladapo Filani, CEO, Waltersmith Petroleum Ltd
6. Momoh Oyarekhua, Chairman, Crude Oil Refinery Association of Nigeria
7. Godrey Ogbechie, Group Executive Director, Rainoil Ltd
8. Huub Stockman, Chairman, Major Energy Marketers Association of Nigeria (MEMAN) and CEO, NNPC Retail Ltd

Moderator: Engr. Nnoli Akpedeye, FNSE

Moderator

Tell us, what are your insights on NNPCL’s strategic approach to navigating the evolving energy landscape, particularly in downstream activities?

Adedapo Segun

In NNPC downstream, our business is directed by three key mandates. One is to ensure energy security and also be profitable and also run our business in a sustainable manner. And that means future-proofing our business to deliver value to our shareholders. Now the evolving energy landscape, no other business is impacted by it better than downstream. And downstream is where the rubber hits the road and it’s where we have an impact on the daily lives of everybody in the country. And it affects how we refine our products, how we store, how we transport, and how we retail the business, and also how we trade in the energy space. Over the past eight years, we’ve been prepared for this change in the landscape and one of the things we first did eight years ago was to unbundle what we call the former PPMC Pipeline Products Marketing Company, to make sure that we are ready for the future. And now we have three separate entities. We have the retail where we are trading, and we have NPSC that I lead. And one of the other things we do as well is we play in the shipping space as well. So, we diversified our business and now, we are growing the market share. We have invested heavily in human capital development – building the competency and skill gaps that we have experienced over the years. We now have a dynamic workforce to help us in the downstream business. We are also looking at efficiency improvements. As a limited liability company, the focus is also on profitability. We are now competing for revenue with different businesses by improving our operational efficiency. We have assets across the country – pipelines, terminals, depots, and we’re partnering and collaborating with international oil companies and stakeholders to concession some of our assets to grow our market share. We are in the process of restreaming our refineries in Port Harcourt, Warri and Kaduna. So, if we grow our refinery capacity, we’ll be able to add more products to distribute across the country. 

Moderator 

You said that the Port Harcourt refinery is operational, so what is it producing? How many tons of PMS?

Adedapo Segun

Very soon.

Moderator

Total is the front runner in downstream; we have lots of Total filling stations around the country. I think the last count was about 500.  We heard that you had your first solar service station somewhere in Lagos in 2014, and by last year about half of those 500 stations were actually solar-powered. So, I ask you, how is Total Nigeria PLC deploying innovative technologies to improve efficiency and sustainability in the downstream sector?

Abdullahi Umar 

Just to let you know that we have transitioned as a company, we have changed our name from Total to TotalEnergies, and that comes with a lot of responsibility. We are moving from a regular oil company to an energy provider today. There is a huge investment that we are making in terms of renewables, in terms of solar. We have a big contract that we just went into with Airbus in terms of supplies of renewable fuel for their planes. So, with that, you can see clearly that the landscape is changing here in Nigeria. As we’re very much aware, the cost of energy has really doubled and in terms of expectation from our customers, people are looking for value in their money. So, with that, we’ve come up with a very robust card system where our customers will be able to know what is the consumption pattern of their vehicles, and where they can access product.  Just like you said, we’re a company that has a very good spread of over 525 stations across the country. So, technology innovation has been at the pivot point of our trajectory in the sense that today everything we do is to ensure that we meet up with our customer’s expectations. We’ve also come up with another tool where you dispatch a truck to go to either an industrial site or to go to your station. The manager of that station or the owner of the industrial site will be able to go online and check the location of that truck. With that, it has helped us to know what is the level of efficiency in terms of our truck deployment. It has helped us to control the behaviour of our drivers as they move across the country. It has also helped us to ensure that we make timely delivery to our customers. If you look at also the design of our station today, it’s a complete one-stop shopping centre, it’s not just for you to go and fuel your car. You can park your cars, you can wash your vehicle, you can service your vehicles, you can do shopping, you can access our restaurant. So, with that, we are completely innovating and we are moving as the demand of the customers continue to improve. Likewise, just like you stated, most of our stations today, more than half in this country, are operating on solar. In Abuja, we have one of our stations that has operated for more than two months without any energy backup. It’s hundred percent on solar and it doesn’t use a generator, it doesn’t resort to the national grid. And this investment will continue to make sure that all our stations continue to have this sustainable transition. So, this is what we are doing and with that, we are just leveraging on technology and innovation.

Moderator 

So Total Energies is across the full value chain of anything energy from upstream, midstream, downstream, power, renewables, it’s awesome. And then the deployment of technology is something that is really key.

From your own perspective, what are the key opportunities for expansion in the downstream sector within Nigeria and cross-border?

 Temitayo Ogunbajo

 I will speak industry-wide first, then I will come down to specifics; things that relate to us. When we speak about borderless energy markets, we’re talking about the free movement of resources, whether it be capital, technology, or human resource skills without constraints, without borders essentially. The idea here is to be able to create a common market beyond the conventional. And there are two ways you can look at it. You can look at it geographically, which is the quickest one to look at. Meaning not just the Nigerian space, for instance, or not just your local captive market. You’re looking at a much larger market without restrictions. But you can also look at it sector-wise. You have players who are able to play across sectors moving within the upstream, midstream, downstream. And the opportunities abound, especially within the midstream and downstream. The ED, NMDPRA spoke about the AFCFTA agreement enabled collaboration across African countries. The same applies within the various regions in Nigeria, especially in the gas space. And there is ample opportunity to be able to do that on the product side as well. But there are key constraints. One of the constraints is infrastructure. Having the infrastructure to be able to move products across our regions, is a huge deficit. There is a need to better coordinate all of these assets to be able to achieve the efficiencies that are required. And that’s geographical.

The sector part also has its own challenges. For us, for instance, we started out as an upstream company: 30 years as an E&P company. But then, opportunity opened up where the founders said, you know what, we’ve got the skill set to operator down the value chain. And then we went into refining about 13 years ago. Now we have our refining business doing 11,000 barrels per day wherein we provide products into the local market. And we want to be able to grow that footprint, not just into the local Nigerian market, but to be able to take it beyond this, into the region, as it were because we’ve got a deficit of downstream products, not just in Nigeria but in West Africa and even in Africa. So, the opportunity is there for us to be able to do so, but we need to be able to deploy the investment that is required for it. And of course, justification for that investment has to be made to be able to raise that financing. It’s the same with products, it’s the same with gas where the challenges remain being able to make commercial sense of a lot of the infrastructure development projects that are required to be able to grow and be able to have a borderless market and a much larger market. But it’s absolutely imperative that we do this. One of the key ways I believe that we can do this is through collaborations. Such collaborations among market players would enable us build the scale that is required for us to move into the African market.

Moderator 

We’re so proud of Aradel because, you’re actually producing refined petroleum products. So, tell us, what kind of refined petroleum products are you producing?

Temitayo Ogunbajo

Right now, we’re doing gas oil, marine diesel, kerosene, fuel oil, naphtha. And naphtha gets exported, presently, but our PMS unit should be done before the end of this year. So, we will be pushing gasoline into the market.

Moderator

Now Pinnacle Oil and Gas Limited operates across the petroleum trading, marketing, distribution, and retail segments of the downstream sector. So, what do you see as the major challenges facing companies like yours in this sector and how can these be addressed to maintain competitiveness?

Bob Dickerman

Before I get into the specifics of our sector, I want to offer a little bit of context because it’s really very important to understand the sector. The macro picture of this. Nigeria has a long history of allocating resources to oil and gas production at the expense of most other economic and social programs. To balance this, there has always been a longstanding policy to mitigate consumer costs by palliatives, such as fuel subsidies and food subsidies. But one of the net effects of oil money is under investment in other things like local production, manufacturing, and other value-added activities that could generate foreign currency through exports. These are all well-known. There’s also been a large amount of under investment in maintenance and upgrading of existing infrastructure, including electricity, roads, healthcare, water, waste, education, and even financial infrastructure such as consumer credit. So, as a result, we have a huge negative trade deficit. We import far more than we export except for crude oil and liquefied natural gas. And this is an important point. Our banks collectively are not sufficiently capitalized to support significant new capital programs that would address those infrastructure capital needs. With legacy monetary policy making currency exchange difficult, we desperately need foreign investment. That’s the macro conclusion. This is a reality. So, the best policy during this time of crisis, and I don’t mind using that word, I think most people would agree, is a national policy to transform our economy, our regulations, and our laws to accommodate and encourage FDI, foreign direct investment. Foreign investors, foreign lenders, and government-run DFIs have been very clear about what they want to see from Nigeria: Conservative fiscal policy, let’s be careful how much we borrow, tackling corruption, enabling competitive markets, and enforcement of fairness in markets through policy regulation and the ability to enforce contracts. Here’s why I am talking about this: with that context in mind, I want to point out that there is still a massive subsidy in gasoline, otherwise known as PMS here, albeit it is in the FX portion of the PMS price that you see. When you see a price at the pump of 600 and something Naira per litre, you have to know that that’s about 50% of the global market price. You have to know that that is the case at bulk, at wholesale, and at retail in Nigeria, the entire classes of trade. The consequences of this subsidy are that we in Nigeria have by far the lowest cost of gasoline in Africa, which encourages, you can call it arbitrage if you like, I call it smuggling, which further deprives the country of value. This also causes Nigeria effectively, not intentionally, but effectively to subsidize neighbouring countries even while our own economy struggles. And I’m speaking as a Nigerian, I’ve been here for 12 years. Forgive me. Allow me to do that. The cost of this subsidy is hurting the entire budget. And so critical programs can’t be funded to pay this subsidy. The subsidy is currently estimated to be close to 1 trillion Naira per month, not per year. Also, with this subsidy in place, ceasing subsidy payments would result in no supply of petrol. Dangote gasoline is not yet on stream and the NNPC refineries are not yet on stream. So, we have a pure import economy with some exception. It’s not a hundred percent, I recognize that, but all supplies come from the international market. Guess what? The international market will only sell at market prices. That’s why I say that without this subsidy, if it just ends, we have a serious problem. We either have to raise the domestic prices or we have to find a way to fund the subsidy. There is today no competition in bulk supply as only the national company can import. It’s a true statement. Wholesale and retail prices are now set based upon their subsidized cost and they determine who gets supply. Without a competitive market, foreign investors are discouraged from investing in this sector in Nigeria. And that’s why I started by talking about the macro picture and our need for foreign direct investment. The world can see what Nigeria is doing as many other markets, but Nigeria is such a big market, it gets a lot of global attention. The world can see. When I talk to people that I do business with, that I have done business with for decades in international oil companies and hedge funds and private equity funds and investment banks and commercial banks, they are very, very familiar with the economics of gasoline in Nigeria. It’s amazing how conversant they are with our situation. I want you to know that everything is being seen by everyone. They read Nigerian newspapers online and everyone is very familiar with the situation that we’re seeing. So, the solution, I think there’s a solution implied we need to hear that. The solution seems obvious, even acknowledging the daily struggles that most citizens and companies have with reduced purchasing power, high inflation, high interest costs, and high unemployment. Short-term palliatives have never resolved long-term issues in any nation at any time in history.

 Moderator

I’m going to allow NNPC to come back on that whole issue about the subsidy in the price of PMS because what we sell, the rate at which it’s selling in-country is half the price of the global market price.  And this supposed 1 trillion Naira per month of subsidy. I’ll also ask NNPC later to talk about this competition in the bulk supply.

Walter Smith has been a forerunner in driving growth in the downstream sector. We all know that Walter Smith has a modular refinery somewhere in the southeast. Tell us about how far you’ve gone with implementing the next phases of that project. And while you’re doing that, could you elaborate on your company’s strategies for expanding its investment frontiers in the downstream sector and contributing to energy security?

Oladapo Filani

In 2014, the visionary leadership and ownership of Walter Smith decided to transform from being a traditional oil-producing company, exporting oil as a commodity to international markets, to a company providing high-value products that meet the requirements of the Nigerian market and potentially Sub-Saharan Africa. So, we set out on a journey that started in 2015 with licensing, securing a license for setting up the modular refinery. That in itself is a different story on its own, but if we ask, let’s say some people said we shouldn’t do it, we can’t make a success out of it, we’re not going to make money and all that. So, a success story that delivered over 600 million litres of product to the Nigerian market and some export within two to three years of coming on stream. The modular refinery itself, yes, it produces four products. High-quality products from FID in 2018, within 18 to 22 months coming on stream. It is a Nigerian-owned modular refinery and run by Nigerians. So yes, we can do it. But the key thing is that we recognize the fact that we can play in three key segments. One, refining and marketing. The second one is transportation and logistics. And the third one is distribution and retail. I can assure you as Walter Smith, we will at some point in the future, play in all three segments. But for now, our focus is on refining and marketing. We’ve been very successful with our existing 5,000 barrels per day modular refinery. Today we’re constructing a phase two of that. So, give or take, if we close our eyes and look forward to June 2025, we will have 10,000 barrels refining capacity at the Ibigwe field in Imo State, South-East Nigeria. The question is about what are we going to do in the future? So, we see ourselves strategically positioned to contribute to providing energy solutions for Nigeria, starting from home. Our first focus is Nigeria, then we expand our footprint into Sub-Saharan Africa, and then to the larger African continent as a whole. And for us, we believe we have to get three things right. One is portfolio expansion and diversification. Today we have an existing upstream business. We have a growing and thriving downstream business. We have an evolving midstream gas business. For us to achieve our objective of contributing energy solutions to Nigeria and Africa, we believe we must expand our upstream portfolio; that, in a case, will be to invest in a very targeted manner to grow our oil and gas reserves base. That will be organic investment in our operated assets. And we will also explore inorganic investments within our upstream business, we are also embarking on something we started in Q4 last year. We’re expanding on targeted upgrades of our facilities to prepare ourselves for the future. So, we’re investing in new technology within our upstream business. And of course, above all things, as mentioned in the previous panel, we’re also looking at our people. Because we recognize that everything that’s brought us to this stage cannot take us into the future that we envision. So, we’ll have investment in infrastructure and also investment in the development of our people.

The second thing we’re pursuing is about the adoption of advanced technology. If you have the privilege of visiting our refinery today, it is a symbol of well-defined technology that was deployed within 18 months. Our refinery phase two is building on the learning of phase one. So, we’re deploying the same technology in an advanced state – an improved version – taking all the learning from what we had in phase one. So, technology is going to play a key role in our ability in our upstream business, our midstream business, and our downstream business going forward. The third thing that has worked for us, and we believe we’re going to do again, is strategic partnerships and collaboration. If you look at the success story of our refinery business today, we cannot mention that without mentioning the contribution of our financial partner, a strategy partner that came on board when we started that as NCDMB and also the good contributions and the guidance we got from the regulators. Then DPR, today’s NUPRC and NMDPRA. We intend, as we pursue our ambition of becoming a major energy solutions provider, we will be looking at strategic collaborations or partnerships across all our business lines.

Moderator

As the chairman of the Crude Oil Refinery Owners Association of Nigeria, what collaborative efforts do you advocate among stakeholders to enhance the capacity, reliability, and sustainability of Nigerian modern refineries to meet local and regional demand for refined petroleum products?

Momoh Oyarekhua

I always tell people that you cannot overemphasize the importance of refining. What importance does refining actually play in the whole energy value chain? I realized that the importance of the oil industry rests on the refining aspect of the business. Anywhere in the world where oil is being extracted, you extract it because you must refine it. If you don’t refine it, there’s nothing to do with it. I don’t know if anyone here knows anything to do with oil outside of a refinery. I’m throwing the question to the audience. I don’t know. So, we realized that there is a very huge importance to refining. And the key thing is, what have we done as a country with refining? We’ve almost done nothing. Would downstream exist without refining? The answer is no. Would upstream actually exist without refining? The answer is no. So, I sit in a company as an MD called OMSA after several years of working and all of that, and also being in the downstream. And I began to ask myself, so what if Nigeria does not have refining capacity. Our refinery roots are not working. And in 2017 we began to discuss with our technical partners on actually building modular refineries for people. Today, I’ll probably say we are the only refinery in this country that has built our own refinery. We did not in any way give it to anybody to build for us here. We have technical partners, but we brought them in. Yeah, they’re still with us till date, we work together. Refining is just a very simple technology based on our elementary chemistry. It’s just distillation. It is only the second aspect of it, maybe the deep cracking and all of that, that is the issue when you now want to produce PMS and other products. But looking at it, it’s just simple distillation. And you produce diesel, which we call gas oil. You produce kerosene, you produce naphtha, and you produce fuel oil and perhaps associated gas. This you get from simple distillation. So, when people say illegal refineries in parts of Niger Delta, what do you see? Simple distillation. They just put crude in one container, they put fire on it and all these products start coming out. So, it’s not a big deal. Nothing Nigeria cannot actually achieve. So, when the moderator asked me the question and said, what are we doing to sustain the industry? What are we doing to support downstream and all of that? I keep saying refining, refining, refining. Because what I advocate for today as the chairman of CORAN, I keep saying that we have stranded crude in several areas in Nigeria. And the only solution to those stranded crude is to add value to them through refining. Most players upstream only want to export the product, not because they want to add value to our local economy. The only way to add value to our local economy is to refine products here in Nigeria and ensure that we’re net exporters of refined products. We will be the ones to export products to other countries rather than we buying products and bringing products into the country.

Moderator

Let me just ask you one follow-up question before you go. How many of your members actually have working refineries, and to what capacities?

Momoh Oyarekhua

As at today we have four operating partners. We have the Aradel refinery, Walter Smith, our own refinery OPAC, and we have Edo refinery. We have a combined capacity of about 27,000 barrels per day. And I know Duport has finished installation, but I’m not so sure as I speak at the moment if they’ve commenced full operation.

 Moderator

Awesome. So, there’s more opportunity in that space. There are many more opportunities for others to play in that space.

 Momoh Oyarekhua

We have around the Niger Delta stranded crude. These are crude you cannot even export. Why can’t we build modular refineries there? Refine those products, put them into the local market. That’s the solution and that’s the way we can support the downstream market.

Moderator

Rainoil is on a mission to provide energy products and services in an efficient and sustainable manner while creating superior value for all stakeholders. So, I ask you, how does Rainoil create superior value for her stakeholders while pursuing business growth?

Godrey Ogbechie

There are challenges. We have lots of them. It’s almost becoming discouraging for new players to come into the downstream space. We have storage facilities, we have retail stations, we have trucks, and we have built this over a period of 27 years. So, we’ve invested a lot of patient capital, especially in this business, but it is no longer looking attractive to new players. And even some existing players are beginning to review their options. An industry or a sector where you invest so much money and you come out with single-digit profit margins is not very encouraging. We have problems of security. Somebody mentioned it in the other panel. We have issues with product shortages. We have all those issues, but to be honest, I don’t want to dwell on those. Because somehow in Rainoil, we’ve been able to, out of sheer resilience and financial discipline, reinvesting in our business, our people, and technology, we’ve managed to stay profitable. I mean, we all know about the FX challenges that are plaguing us right now. Companies are declaring huge losses. We have taken our fair share of losses, but we are still there, and we still manage to stay profitable. That is a conversation for another day because my moderator has warned me that I should focus on telling everyone here, especially the people who are discouraged and those who are thinking of not coming into the business, that it is profitable, you can stay profitable, and you can actually give back to your stakeholders. Because stakeholder engagement or stakeholder management is very critical in our business. We are the ones, as someone else said, we are the rubber that meets the road. When people are angry with the industry, guess who they vent their anger on? Yeah, the people in the downstream. People come to our retail outlets and start flexing about issues that we absolutely have no control over.  So, we are the ones that interface with the customers, and we are the ones that bear the brunt of whatever decisions are being taken somewhere else that have nothing to do with us. But how have we been able to create superior value for our stakeholders? I will focus on just four of them. There are many, I’ll start with the customers. All of you sitting here, those of you who have ventured into a Rainoil station to buy fuel, you are the real MVPs. We thank you for it. We thank you for it and we are happy that you are keeping us in business. So, our commitment to you is that we continue to build this business as resiliently as possible to stay sustainable. And while we stay profitable, we’re investing in people, we’re investing in technologies. Like somebody said, we also have a system where we have invested so much in technology where we can track all the products that are sold in all our retail outlets per time from the comfort of our head office. We no longer depend on somebody dipping tanks to tell us what we have and what we’ve sold per day. So, we are doing that. And why are we doing that? Because we want service delivery to be top-notch, to be very effective. So that when you enter our retail outlet, the Rainoil promise that you’ve enjoyed in the past 27 years, you will continue to experience it because it’s really not your problem that the landscape is so difficult. So, we’ll continue to invest in all of that and ensure that we give you premium service. And I want to encourage other players in the downstream who are experiencing that to do exactly that: train your people, ensure that the people interfacing with your public deliver on the promise that you have made to your customers. Don’t let the issues that are happening back end not affect what is happening at the front end.

We also invest heavily in our host communities. I won’t go into details, some of that information is on our website. We invest in three areas: education, sports, and health. In every community that we have operated in, we have ensured that we give back to that community and ensure that we retain a relationship that will work for us to continue to do business. And then our staff, of course, we do a lot. Apart from the very obvious, which is paying competitive remuneration and doing a share of profit. We also do a lot of training so that we can have an organization that is, like I said, resilient. A lot of the times, you have companies where the management or the board and the people are sort of disjointed or disconnected in a way. But in our company, we have a promise that we take responsible decisions. We are responsible in our decision-making. Nobody at the executive management level has the right to make a decision that will disadvantage the company or the staff in any way because we are all stakeholders, we are all staff. We take decisions that there is no management and staff.

Moderator

There is no management and staff?

Godrey Ogbechie

Okay sorry. There is management and staff for purposes of division of labour. But when it comes to what we are doing, when it comes to the value that we are trying to give to our staff, everybody is a staff and everybody deserves to be treated fairly and equally. Then of course, we have regulators and we have some of them in this room. We’ve partnered with a lot of them over the years. They want to guarantee energy security. It is the same thing that we are doing. We are all focusing on the same goal, we are all interested in the same goal, if I’ll put it that way. So, we want to work with them to ensure safe distribution of products to all our customers. They’ve helped us over the years. They’ve been useful to us over the years and we want to let it continue that way. So, we are always engaging with them. I mean, when they ask for input, we give it to them. When they call us for meetings, we are there. When they ask for anything that is needed to move the industry forward, we are always very ready to partner because we know that at the end of the day when we are able to get products and services efficiently to Nigerians, it becomes a win-win situation for everyone.

Moderator

She talked about how the business return on investment is in single digits and they’ve simply remained in business by being resilient, being focused on cost efficiency, human capital development, and deployment of technology.

With your role as chairman Major Energy Marketers Association of Nigeria, how do you perceive the integration of downstream operations and the importance of fostering synergy among industry players for a seamless energy market?

Hubb Stockman 

The first point I want to make is that I’ve worked in many different countries and it’s very normal in many countries that actually competitors share infrastructure. Be it in depots, sometimes even joint distribution of products, in certain cases, even joint purchasing. So, I think logistic sharing and optimization is a key element of an industry that might be mature but is still developing. And I think with investment levels, and we talked a bit about the cost of investments, it’s important that when you share and optimize your logistic assets, I think you can actually provide better efficiency and at the end, that will reflect also at the price at the pump. And I think that’s an important part where we as industry players need to look at. Secondly, we also have to, as players in the market, do sharing of knowledge and self-regulation. Best practices sharing I think is extremely important. As MEMAN members, we do a lot around that, around HSE, both for depot operations, retail operations, and distribution. But you also have to self-regulate. We do indeed test many of our sites each year of our members to make sure that actually there are no malpractices at the pump, a disease that unfortunately we do have at times in Nigeria. What we’ve now also done is we’ve pooled all our resources as MEMAN members and created a Competency Centre that is going to look at sharing knowledge, best practices, skills development for people in the industry, research and development, and basically focus on gas and renewables. Because I think it’s very clear to all of us that the energy mix in Nigeria will change in the coming years. And I think as MEMAN members, we feel very passionate about making sure we’re part of that journey, but also push that journey. And hence the setup of a Competency Centre, which will not only provide that knowledge to our own members but also to other people in the industry.

I think another part is regulators and other stakeholders. I think with the regulators, one key element is that of compliance. We’ve got laws, let’s abide by them because that actually creates a level playing field. But it’s also very clear that when sometimes we’ve had the PIA, we’ve deregulated, we’ve got many changes. And it is important that you keep on discussing with the regulator what works and doesn’t work. We don’t live in a static world and the world around us is changing. And technologies change and it’s important that we stay on board with that. I think at the end you need to work together because we need to provide all our customers with a choice of energy. The energy mix that we give to our customers will change in the future. Coming back to all of this, I think it’s important that at the end, whatever value you create through optimization, sharing, etc., you pass it on to the customer. It is important that at the end of the day the customer gets a good deal.

Moderator

NNPC, talk about the one trillion Naira per month subsidy for fuel importation.

Adedapo Segun

I don’t know where that figure is coming from. I don’t have a line of sight on it. And basically, I am not in the retail business. I’m in the pipeline storage business.

Moderator

Retail. Tell us what you can do to make things easier for us, the end users.

Abdullahi Umar

You look at this industry maybe 25 years, 30 years back, most of the players in the downstream were multinationals. Today all the multinationals have run away, except for TotalEnergies. It’s a very difficult terrain to operate in.  Today the only solution that can make things easy for the customers which I can see visibly is local refining. If we can push the crude, get it to the refineries, move the product to our stations, the prices that you are talking about, you have no business buying diesel at 1,700. But today, what is the refining capacity? How much of this product will we be able to meet the needs of our customers? The majority of the product that we sell in our retail station today for PMS is imported majorly by the government with a little contribution from the local refinery. But talking about our diesel, we import and everybody understands the pricing structure where you are importing this product. So, for us, we are in business, of course, to make some level of revenue. Nobody can sit on this panel to say, I’m going to cut down my cost. It is about costs and margins. We have responsibility to our community. We have responsibility to our staff, we have our overhead costs, we definitely need to generate revenues so that we can meet up with all the responsibilities that are on us. But the most important thing is that we are providing value. We are providing services to our customers. Pricing is completely a different thing.

Moderator

Is there anything you can do to increase refining capacities, just to bring more of the PMS and the AGO into the system?

Temitayo Ogunbajo

The good news is yes, there’s quite a bit of investment that’s going into the refining space. The not-so-good news is it’ll take time. We went into this 15 years ago when there was nobody doing this. Now we’re at 11,000 barrels. We’re working towards an expansion in the near term in the next, as I say, 18 to 24 months to have almost double the capacity of what we have. The idea is to continue to grow there in. If you don’t have control of your infrastructure. If you don’t have control of your cost in a market like Nigeria, which relies heavily on imports. It’s evident that the cost to import products significantly affects the market. With the resources and market available, controlling the infrastructure becomes crucial. This emphasizes the importance of the midstream sector. Mr. Momoh has expressed a strong interest in attracting more investments to this area. The anticipation around the Dangote refinery’s entry is high, and it’s hoped that this addition will significantly benefit the industry.

Day Four: Thursday, 29^th February, 2024

Panel Session 7: Energy Finance and Investment

Theme: Subduing Challenges and Seizing Investment Opportunities in the Dynamic Oil and Gas Landscape

Keynote Address by: Chief Upstream Investment Officer of NNPC Upstream Investment Services Limited, Mr. Bala Wunti, Represented by Dr. Justice Derefaka

The topic of this address is “Subduing challenges and seizing investment opportunities in a dynamic landscape in the oil and gas industry.” First off, I would like to give some bit of an insight on some of the knowns that we are all familiar with, that there is more demand for energy globally as the world population and living standards increase. We know that the world must find ways to meet rising energy demand while reducing global greenhouse gas emissions to limit the efforts of climate change. In tackling challenges, the opportunities are there and when the opportunities come up, we need investment and investment in this clime, especially with the oil and gas industry must be accompanied by an ESG (environmental, social and governance) framework, which is tied to the 17 sustainable development goals of the UN. And if you look at how we operated the oil and gas, or even in Nigeria, we seem to struggle to meet almost all of these 17 sustainable development goals. That we need to improve upon.

There is population increase. In 2017, Nigeria became number seven in world population and it’s been projected that by 2050 Nigeria will be the third most populous country in the world. That means we need more energy and we need to do it sustainably with the growing demand from our investors because of climate change.

The world population today is seven point something billion and by 2050, the population will increase to about 11 billion. Investors are now cautious wanting to see adherence ESG before they invest their money. In Africa, there are issues around energy poverty even as population continue to rise. The question then is where to focus on – energy security or net zero emissions?  The answer is that we need energy security, because if you look at sustainable development goal number seven, it tells us that we need energy across board. And with world energy investment flow in years to come, irrespective of the claim for renewables, oil and gas will be there all until 2050 and even beyond. This is simply because renewables cannot drive most of our heavy industries and satisfy the heavy energy needs that we have. So global energy demand will continue to see oil plays a key role.

Secondly, Nigeria has natural gas. Over 209 trillion cubic feet of gas proven and around 600 TCF unproven. With this we are capable of meeting our energy demand if the right environment is put in place. We take solace in the benefit of what the Petroleum Industry Act (PIA) a has brought to bear. Before now investors were hesitant to invest. But with the PIA in place, right investment is now being attracted. The world needs energy, but to ensure supply security and curb emission, this has to be produced responsibly: hence the ESG stringent regulatory framework.

Capital is needed to produce fossil fuel that is presently suppling 75% of the world’s energy need and renewables doing 25%. The market is there for fossil fuel but it needs capital to produce. What Nigeria and Africa need to do to attract this capital and investors is a friendly business environment – stable regime, clear regulations, security, contract sanctity, and policy transparency.

Local content has played a significant role in creating experience workforce investors will be looking for. This has given opportunity for indigenous operators to hold sway in that sector. Also, there has to be fiscal attractions, resilience, innovation, compliance, sustainability and environmental restrictions, which the ESG speaks to. Market volatility and geopolitics cannot be glossed over.

There are three challenges, amongst the numerous hydra-headed challenges in the industry, I want to point out. They are the fact that oil and gas capital now have choice of movement between mature fields and new frontiers. Secondly, changes in governance structure of onshore assets as a result of divestment by IOCs. And the third one is corporate governance. The indigenous companies need to step up and take that ownership because most of our productions come from the onshore assets where we have communities and the PIA is very clear on how operators carry host communities along and what industry needs to do for them. Not adhering to the PIA mandate is recipe for failure from the outset.

Looking forward, how do we mitigate governance and compliance risks? Because compliance is something you cannot just wish away. If you go against the regulations, NMDPRA, for the midstream, downstream players, will come down heavy on you. The good thing is that the current set of regulatory institutions, NMDPRA and NMDPRA, are not doing policing work. They’re enablers. They’re trying to enable the business. And so, from the outset they engage, they indulge and they tell you what you need to do. And when you fault, they will penalize you. As an industry, as a company, it is important to be able to self-regulate and be that attraction that will draw in investors to play in your space.

In wrapping up, several challenges as well as opportunities abound and legacy issues abound. The only way you can address this is cooperation, collaboration, trust and incorporate a governance which you cannot just gloss over. So, what gives us hope for the future is our collective ability to overcome challenges and seize the opportunities.

Panelists:

1. Partner, Argentil Capital Partners Limited, Olumide Ogunfowora CFA
2. Chief Executive Africa Energy Investment Corporation, APPO Fund, Zakaria Dosso
3. GCFO Pan Ocean Oil Corporation Nigeria Limited and Newcross Group of Companies, Seyi Oladapo
4. Director, Strand Ventures, Iek Van Cruyningen

Moderator: Ms. Chidinma O. Obi, Founder and Chief Executive Officer, Dindu Energy Services and Resources Limited

Moderator

We are saddled with the very nice opportunity to discuss finance and investment. We are going to have eminent discussions tell us where to find the money – the emerging trends in financing the energy sector, crisscrossing the issues of government policies, securities, and the energy bank. Each panelist will start by giving us their opening remarks on the session topic of finance and investment.

Olumide Ogunfowora

From my company’s experiences, I would just like to speak about one particular element of energy financing as a challenge for us in Nigeria and that is the equity gap. Oil and gas investments are massive ranging anywhere from $10 million or equivalent to billions of Naira. One of the biggest challenges that we have in Nigeria and indeed Africa is being able to have that equity capital that would get that project to reality. The first bucket is the development capital that is required. Typically to get into a bankable state, each of these projects will need a few millions of USD equivalent depending on the complexity. Even as our entrepreneurs are known for working really hard, it is extremely difficult to get maybe $5 to $10 million to progress a project to a bankable stage giving the challenges that we know we have in Africa. So, this is not a knock on them. It’s actually kudos to them that they’re actually even able to come in and put $1 million, $2 million, $3 million, which may not result in the project going forward at the end of the day. How then can we address and support these entrepreneurs to have that equity? Banks will tell you to bring in maybe 10% to 30% of the funding as equity. This makes the bridging of the equity gap a major concern.

Moderator

How can we generally attract investments to the energy mix of fossil fuels and renewable energy?

Zakaria Dosso

Let me give a quick statistics of fossil oil situation in Africa. In 2008, Africa produced 10 million barrel per day. In 2022 it produced 7 million barrel per day. This is a decrease in production. Worldwide on the other hand production was 83 million barrel per day in 2008 and 93 million barrel per day in 2022. This represents an increase in production despite the fact that Africa contributed less in 2022 than it did in 2008. In 2008, Africa produced the equivalent of 12% of global output and in 2022 only 7% of output. This decrease was the result of reduced investment coming to Africa and not that there was not enough reserve.

This is the critical situation facing Africa’s fossil fuel industry. However, challenges also throw up opportunities. The opportunity has to do with the market of the more than 600 million people who presently lack energy. This is the investment opportunity; it remains how to get the funding. We know that we are presently exporting our crude oil and importing petroleum products for example. The opportunity here is for investments in building refineries and also in the entire value chain of refined products. This will create jobs and boost the economy.

Seyi Oladapo

The a, b, C of finance tells us that for energy investment to happen, we need to make project bankable. Sustaining investment possibilities come with collaboration, knowledge, reflecting ESG (Environmental, Social, and Governance) in how you run an oil and gas business. You must be driven by process and data in decision-making system. We need to just look at what are those things that investors want to see in order to determine if a project is bankable. The first one is return on investment. This return on investment must be competitive and there must not be undue risks. The security of the capital is very essential: security of the capital in terms of the policies of government and having enabling environment, because the amount invested must be kept secured. The third one is the going concern, which is the sustainability of the investment. Collaboration is very key, also even as we navigate through this new energy world order. Collaboration in the sense that the government, the policy makers, the community, even the people in academia, the consulting arm, must come together to build that body of knowledge that is needed to attract and keep investors. Once your project is bankable, it’ll attract the funding that you need.

Moderator

Based on your experience financing projects in Nigeria for over three decades, can you tell us how we can harness the finance to move on in our energy mix?

Iek Van Cruyningen 

I think one of the key considerations here is when you come down to a bankable project is risk and security assessment. For the large IOCs that operate in multiple countries and have multiple assets, they can balance that risk portfolio much more manageably. Although every now and again something does blow up massively, like in Mozambique. Here in Nigeria, it affects mainly the smaller independents because they have smaller numbers of assets. So, it becomes harder for them to raise funding unless they actually have a very solid security and risk assessment and a means of mitigating that security at risk. With that they can obtain funding. Without it, they will struggle to obtain the funding because you are deploying significant sums of capital over a significant period of time in order to make your returns and for international investors, they need to see that security, they need to see the risk assessment before they’re willing to back you and deploy the cash in. And that’s really a crucial element for any bankable feasibility study to make sure the money’s going to be safe and how you get the money out. But more importantly, when something does go wrong, because usually it does, what are you mitigates in order to reflect that and to get the project back on track? That is very crucial.

Moderator

Can you speak on your experiences in how security concerns impact energy investment decision, especially in regions prone to instability and conflict? Can you tell us how security factors play a key role in attracting investments into the energy sector?

Iek Van Cruyningen 

It comes down to a single point. When you’re investing large sums of cash, either for an independent and IOC or a mid-tier player in any form of energy, the capital needs to be deployed into the country. You have a long feed stage, which is the engineering and design stage, then you have the build out stage, and then obviously the operation. So, it may take you 5, 10, 15, 20 years before you get your full capital back. So therefore, as an investor, when you’re looking at projects, you actually have to look at the security of the country and whether or not you are willing to back that country. It’s not just the Nigeria’s problems. There’s been a lot of countries that have gone from being investible to un-investible around the world and that can happen very, very quickly. So, we look typically at three levels. At the high level, you look at how can you effectively mitigate and for that you can use certain international organizations, you can get insurance, get backing from people like Afreximbank, IFC, the World Bank, and these large organizations can provide you some protection in certain countries because the governments are shareholders and therefore they do not want to see those projects being disrupted.

Secondly, you can get various insurance wraps as well, in particular out of Lloyd’s of London, which will help mitigate that risk. But that comes at a cost because there is a financial cost for taking these packages for the big IOCs and for the big projects to become bankable. They have the balance sheet, they have the firepower, they can do it for the mid-tier and for the independents. Quite often that insurance wrap will turn the product project from being an attractive internal rate of return to un-investible. That’s actually a negative. So, what you need to see in country is effectively triple layer. You need at the top layer significant support from the government to make sure that you have robust military and police providing security in-country, protecting assets, protecting people because it’s not just the physical capital, it is the human capital as well that you have to protect and that’s obviously your local population.

Thirdly is what I call the mid-tier, and that’s at the state level. You need to likewise work with the government. You also need to understand each independent state you’re operating in and work with them. And at the lowest level you need local community engagement and you need the support of the community; be it making sure they get jobs, and then you can do certain civils and infrastructure in the areas sort of like roads, bridges, schools, health clinic and so forth to make sure the local community are on your side. Because one of the things historically we have seen, not just here in Nigeria, but other than African countries, is that companies come in, do a project and there’s no trickle down to the local population and that causes a lot of issues. So, for us and for a lot of funders who work with us, you need that multi-layer approach. You have to engage with the stakeholders. And the stakeholders are the local community, are the state and the government to make sure that they understand the long-term benefits to the country in terms of taxes, in terms of employment, and that helps the country, that helps the economy. And I think that’s the key thing. And if you can deliver those functions, you can avoid a lot of the security issues; because a lot of the security issues are actually self-made by the companies being arrogant and just being plain stupid sometimes.

Moderator

Can you share with us the likely challenges and opportunities for investment in new energy projects? And also address issues confronting young entrant investors in the energy mix.

Seyi Oladapo

It is crystal clear that while maturing any opportunity, we must not lose sight of the challenges that will bring. We are transiting from fossil oil-based energy to renewable and decarbonization. We need to know the opportunities first, then we can now look at the challenges and how we can manage the risk attached to those challenges. From the keynote speaker we heard that part of the opportunities in the emerging market is rising energy demand. Because the demand is there, the market is there. Not only that, we have abundant natural resources in terms of very rich reserves of fossil fuel. The crude oil in this country is 37.1 billion barrels proven; natural gas, 209 trillion cubic feet proven; 600 trillion cubic feet unproven. Then we have sources of renewable energy and we’re having the human capital also that can actually make the transition very easy. Then we have investment opportunity for people to actually develop infrastructure. For any project to be bankable, the requirement of the fund providers, requirement of other key stakeholders must be met. So as a country, as a continent, as an individual, we must know the key roles that we are playing.

So, what are those challenges that we are having? We can attribute some of the challenges to the security that has actually been mentioned here. Nobody wants to lose any capital invested in any project and knowing full well that in this industry it requires huge capital investment and with long gestation period. So, you need a certain level of stability in government policy because you are putting the project document together with some key assumptions. If those key assumptions are valid and over the years, they can remain the same, and if before the maturity of that project there is no change, the project will still be a lucrative one. But shifting changes in policies can actually make nonsense of whatever financial model that one has actually put together. That’s why collaboration is inevitable: collaboration of key stakeholders and government to provide the enabling environment. Collaboration with the academia will provide the consulting to add to the skills and the human capital that we already have. Formulated policies should have a life span of at least 10 years because this will give potential investors the security of capital and assurance they need. Thus, making the attraction and retention of investment possible.

Also, to ensure security, the host communities should be part of the collaboration strategy. Investors must do due diligence as part of their investment decision making process so as to identify some certainties that can prevent threats in the long term. ESG should form part of this process for sustainable investment to be achieved. This is the package that can attract funding from fund managers.

Transparency is key: decision making should be driven by data and process in order to pass the test of time. Regarding legal and contractual risk, the industry has a complex legal framework. Weak contract enforcement mechanism will pose a challenge to an investor: this has to change for investment to come. Then there are infrastructure deficiencies that need to be worked on. Upstream, downstream and midstream infrastructures should easily connect to evacuation routes and terminals. The entire value chain end-to-end should be looked into. All stakeholders must be involved in getting this done, but the policy that drives this must ensure security of the capital invested.

Moderator

Address how private sector, government agencies, and international organizations work together to mobilize investment capital for energy infrastructure. If we are able establish the Energy Bank that we are all clamoring for, there would be some breath of air coming to Africa because we will be able to access our own funds established for the energy sector. Enlighten us on this.

Zakaria Dosso

This has given me the opportunity to talk about the strategy of APPO to solve the problem of the funding of the hydrocarbon sector particularly and the energy sector in general. APPO had previously established the APPO Fund in 1992. This was mainly meant for APPO internally generated projects. But because of world trends APPO reformed this Fund and in its place created a proper financial institution called Africa Energy Investment Corporation with a capital of $1 billion: the focus being on financing the development of the hydrocarbon sector and energy in general in Africa. To raise equity funds APPO approached AFREXIM who based on experience in funding the energy sector proposed instead the establishment of a joint venture institution to solve the problem of financing because they considered $1 billion to be too small. This is the origin of the Africa Energy Bank. This was approved at the extraordinary meeting of ministers which held in Angola in 2022. The Bank will focus on financing the energy sector, primarily hydrocarbon in Africa in order to bridge the funding gap created by the withdrawal of financing for fossil fuel by western financial institutions. The initial capitalization of the Bank is set at $5 billion. Apart from APPO and AFREXIM Bank, other investors will be APPO member countries, oil companies, Sovereign Wealth Fund, financial institutions, regional or continental investors. However, APPO is not open to having sovereign investors from outside Africa. This is APPO’s solution to financial of the oil and gas sector in Africa. It is expected that each member country will invest 80 million or more. Hopefully capitalization will increase from $5 billion to anywhere between $20 billion and $50 billion within two years.

Moderator

As an investment capitalist, how would you speak to the issue of emerging trends in energy finance and how private sector and government agencies and international organizations work together to mobilize investment?

Olumide Ogunfowora

We have to look inwards if we have to raise capital. It’s very basic. We are not going to get money or rely on foreign investors. Let us build internally. My main thesis therefore to everybody is that we have about 130 trillion of capital in Nigeria comprised from investments in banks, insurance industries, sovereign wealth funds, and then pension. Let us work with these agencies to even look at 10% of these funds under management to support equity investment. By so doing you can easily tap into about 1.5 trillion Naira that can be sort of an equity base to develop these projects. Now this would then leverage on what I would call the 10% rule. 10% rule means that this 1.3 trillion Naira can basically support over time investments of at least maybe 10 times. That would then be channeled to support projects and tap into the other finance institutions like the African Energy Bank we are talking about. The Bank idea is already successful. We don’t need to look anywhere to know the impact of Afrexim. They started off with just about $1.2 billion. Today, their asset base is $34 billion. AFC is there. NSIA is there. We need to actually take this thing and develop our own Nigerian energy bank that will supplement the efforts of the Africa Energy Bank. You see, we can’t save or tax our way to prosperity. We can only invest to prosperity. Let us start small, small and over time we’ll be surprised about how much we can do. Nigerian Pension Fund, as an example, have about 18 trillion Naira under management. If you took 10% of it, the results will be unbelievable in a few years’ time. Let us stop avoiding risk. Let us embrace risk. That is what we do in Nigeria today. It is okay for you to lose that 10% I talked about. It’s not going to make the pensioner poor. What is going to make the pensioner poor is that at 65, after getting their investment in fixed results, they’re still paying 600 Naira per kilowatt hour for electric generation. Pay that money down to secure your future.

Zakaria Dosso

Africa has got to build its own financial capability and we are on the right way to build that by having our own financial institution. With it we can implement our own strategy and not be subject to the strategy of outside Africa.

Seyi Oladapo

The energy bank must have its ownership cut across the stakeholders in the industry. Collaboration is key if we are going pass the test of time and prevent security issues here. Incentives such as tax holiday from government is also key to make the project more lucrative. That can stimulate investment in energy.

Iek Van Cruyningen 

The key thing here is to engage all stakeholders from the government all the way down to the local communities. And that mitigates a lot of security and risk for your project and gets you funding. Simple.

Panel Session 8: From Blueprint to Reality – Navigating Nigeria’s Gas Decade and Balanced Narrative on Energy Transition

 Ministerial Address on Gas by: Hon. Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas)

Nigeria has no business with energy poverty. The global call for energy transition is a wakeup call for Nigeria as a nation with the abundant resources: that will rise up and take our rightful position in the energy landscape.

And of course, if we develop the sector well the way it should be, we’ll be able to meet the local demands as well as the export for revenue generation to the country. I believe we have competent people that are mining the sector. So, I call on all the critical stakeholders to come out and assist us. It is not for the Minister of State Petroleum Resources (Gas) alone. It is for all of us. We need to rise up and fix Nigeria and take Nigeria to the rightful position that it belongs, so that tomorrow’s generation will know that we have started something very, very significant.

Opening Speech by: Ed Ubong, Director, Secretariat of the Decade of Gas

‘Charting a Course for National Growth: Navigating a Decade Fueled by Gas’

We know the challenges that we have across various sectors in Nigeria, but the gas sector has remained resilient in spite of the different challenges such as forex, fuel, and this is a testament to quite a number of people, which I would like to sort of acknowledge. At the root of that is what we call the upstream producers. They bring gas to the surface. They have continued to bring gas to the surface in spite of all the challenges we are facing. Chevron, Andy Western, SEPLAT, Total Energies, NNPCL and subsidiaries, ENI, Shell, Savanna, Heirs Holding, ExxonMobil, IPPG, OPTC as a group, the Nigerian Gas Association, the largest umbrella association looking after gas, the Nigerian LPG Association, the largest association looking after LPG production in country, the Women in Energy Network (WEN), the WEOG, the LDG looking after local distribution of gas. All these groups of people have continued to put their hands to the plow to ensure that gas supply remains available for people in country.

At the other end also have been the big off-takers who have ensured that gas produced has been off-taken and paid for. This includes the likes of NLNG who export the largest volume of gas virtually, WAP-P who ensure that the gas line takes gas to never in countries like Ghana and Togo to ensure that there is energy in the West African region, the GenCos who have continued to take gas even though they do not get paid on time by all of us in the room, Indorama, Bua, Dangote, Axela, Shell Nigeria Gas, Falcon, Tetraco. They’ve continued to take bulk volumes of gas that has ensured that the market itself has remained viable. There are also players in the LPG market, bulk traders, the likes of Banner, ASEC Oil, who continue to ensure that they move LPG from both importation and from LNG back into the market to ensure that we have cooking gas. At the other end, of course have been players who have said, we do not have the scale of these players, but we will move gas via CNG to various parts of the country. The likes of NIPCO, Total Support, Power Gas, Green Energy, Cottonwood.

I have tried to mention as many of them as I can, but it’s quite a large sector. These players continue to work. Of course, we cannot forget our regulators. In Nigeria it is difficult to regulate because everybody knows your boss. The likes of NMDPRA, NUPRC, NCDMB, the Federal Ministry of Environment, the Ministry of Petroleum Resources (oil and gas), the Ministry of Power, the Presidency of course where we have the SA Energy also looking after all the energy activities. All these people are committed to ensure that the whole sector continues to work. I would also like to thank our communities because all we do sits at that level. They have continued to support the work we do in the gas sector and our national assembly members, our governors at the state level because that is where real work gets done. And of course, the media.

In spite of all that has occurred, there are a lot of new investors in the gas space. In upstream, the NUPRC has concluded this Nigerian gas commercialization program. There are over 40 people who have signified interest that they’re going to make that program work by turning gas flared to gas commercialized. These are people willing to invest in the sector. The President, of course, has launched the CNG initiative. There are already over 20 people who want to build new CNG compression plants. These include Starz Gas, four E, Tam Rose. In the LNG space, we also have lots of players coming up the likes of Alpha then, BTT. And of course, there is floating LNG, big scale, multibillion-dollar project with players like for Ron Gas. These are all investors who are still willing to take a long-term position in the Nigerian gas sector. And for these investors, the government of course has said we will support you.

In line with the PIA, the President has inaugurated the Midstream and Downstream Gas Infrastructure Fund, the largest investment money available for investment only in the gas sector. The cash will come from gas flaring, the payments of 0.5 levy on the top of every wholesale price. But the mandate is very clear that money must be invested back in the gas sector to allow Nigeria to develop its large-scale infrastructure.

Following the inauguration of the Decade of Gas Secretariat and the work being done by all the sponsors group today, we have 20 plus projects that can deliver about 4.6 BCFA per day. If we all follow through with that estimate, Nigeria stands a chance of doubling its current gas production. 4.6 BCFA per day is long term up to 2030. For 2024, we are confident that we can add 20% to Nigeria’s current production. We thank the likes of SEPLAT and Shell who are working on the ASA north project. Chevron has committed to ensure that they continue to produce over 300 million cubic feet of gas a day into the Alps. So apart from sustainers we’re going to see a 20% jump in gas production in country. Additionally, it is worth noting that based on all the work being done by the Honourable Minister of state for gas in January 2024 alone, the LNG supply has moved to the levels that we’re seeing last two years ago. That is significant progress. We are not yet out of the woods, but a lot of work is going on with the National Security Adviser, just ensuring that the resilience that is being built around that supply continues. But that is the trajectory that we are looking at for this year.

We also need to make final investment decisions. We think that we can deliver about five of that this year. The final investment decision is an indication that we have agreed that we are going to invest money as an industry. Special thanks there to Shell who declared their first FID in January. When Iseni comes on stream will produce 100 million cubic feet of gas daily to the Dangote fertilizer plant. That’s about 400-megawatt worth of energy that will be consumed in the domestic sector. It is not all done. There are various unlocks enablers that are being requested by the sector to continue to progress this work. And that discussion has been supported by the NCDMB, the SA for Energy who is working on looking at how the fiscals can be changed to make projects more profitable and NMDPR who is looking at the economics just to ensure that the issue of gas pricing begins to work and also, there’s an improvement along the elves, which is our main transportation line.

All these stakeholders have joined hands to ensure that we are safe and working that track. I will speak a little bit about infrastructure. Sitting at the back of the elves is about 300 to 600 million cubic feet of gas a day, which can become available once we complete the OB3 line. To ensure completion, there is a monthly report on that piece of work going to the presidency in order to monitor how it is progressing. The minister has assured us that that work will be completed by the end of March, 2024.  Once that is complete, over 600 million cubic feet of gas a day will become available on the network feeding into the AKK and into the west where there is significant demand. This is the single most critical infrastructure that we need to complete in the short term to improve the overall gas reliability that we see in the system.

Gas producers are owed for producing gas and selling it to the GenCos. As at last year, that was about 1.3 billion, depending on how you add up the numbers. However, the government has paid over $120 million to offset some of that debt. Government is also working on a framework that can liquidate most of those arrears and close that chapter on legacy issues.

We must build capacity for engineers and technicians that would work in this new gas sector that we are looking at over the next decade. The Secretariat is committed to that. For the first time we now have an inter-ministerial committee, one that involves both the Minister of state for gas and the Ministry of Power because power and gas go together. We are confident that when that has become fully operational that critical link between gas and power will lead to more sustainable solutions going forward.

Keynote Address by: Mr. Akachukwu Nwokedi, General Counsel for NLNG and President of the Nigerian Gas Association

‘Investor-Friendly Policies as Catalysts for Collective Growth during Nigeria’s Gas decade’

Investment promotion is one of the cardinal objectives of the Nigerian Gas Association (NGA). We’re heavily invested through the activities of our members in ensuring the success of the decade of gas, as we see it as pivotal in enabling sustainable development and economic growth for our country and it impacts all critical sectors of our economy – be it power, industry, security, agriculture, energy, financial services. Nigeria’s gas resources currently at more than 200 ATCF is now recognized as the primary catalyst and transition fuel for the realization of several national aspirations, whether for the attainment of some UN sustainable development goals or climate change or energy security aspirations. And I could go on. So, every gathering such as this is important to keep us honest with regards to our expectations on the one side and on the other side, laser focused on the solutions to enable the potential we have as a nation, especially one that is propelled by gas. There’s no doubt with the right policies, the right approach of all the key critical stakeholders and the respect of contracts thereby creating a very strong legal and contractual stability we can fully utilize this decade of gas, which I must say the NGA sees as the decade for investment which is needed to rebuild our nation and unlock a sustainable energy future for Nigeria. If I use the latest corporate buzzword, gas investment is needed to build and sustain today so that we can future-proof Nigeria. Before I go into the core of the theme which is exploring the types of policies that spur investment and indeed act as a real catalyst for growth during this decade, let me paint a picture of some of the pain points as a business community we see today that act as barriers to investment in our sector.

First, where the rubber hits the road is that businesses are in it to make returns. So, there must be the enabling environment for the sector to ensure a level playing field: competitive and transparent playing field. Secondly, investments flow where you have policies that have very clear fiscal and commercial terms. So as a minimum, there’s recovery of investment. There are issues around speed to market. Asset and social security which all need to be addressed. But we note the positive steps already in this area that is yielding results. Legacy debt is really an issue; as these huge debts are on the books, which erode investment confidence hindering further investments in upstream and on critical infrastructure. We therefore recognize that there have been steps to clear the debts, and I’m happy to hear that $120 million have already been cleared. But for us in NGA, it’s not just clearing the debts, which is a very good thing, but it’s putting in place policy mechanisms that will prevent recurrence. Then we have, we could call it the elephant in the room, which is the multiplicity of taxes and levies in existing policy regulations, increasing the cost of doing business, which chips away at the returns and discourages new and existing players. I must say, it seems every law passed in Nigeria today levies the business community. And the simple message here is that this has to stop and the approach needs to be harmonized and streamlined as a matter of urgency. Whilst regulations should be positioned primarily as enablers to business, especially recognizing the new reality in our nation, that we’re in a development stage and all hands must be on deck.

The question is how do we achieve this feat? How do we go from roadmaps to reality? Because we have very solid plans in Nigeria, very solid frameworks for the gas sector. There’s no doubt the discussions today will center around identifying sustainable solutions. So, these pain points stop recurring to the extent that they discourage investments. Time is of the essence, and so we must move from planning to execution mode because the world is fast changing with the window of opportunity closing, especially when you look at the bold steps of nations like Qatar and the Saudis that are changing the global gas landscape. We can also learn from countries like Australia Oman if we add them into the mix as they have been very deliberate about implementing investor friendly policies. So, Nigeria’s gas potential requires the right enabling environment to attract the much-needed investment to unlock its potential, be it to ramp up production, improve gas infrastructure, drive utilization and exports, boost domestic energy supply, whether it’s for power, whether it’s for cooking, whether it’s for transport, all are aimed at truly supporting the rebirth of our industrialization.

The NGA therefore recommends a regulatory impact analysis to be carried out on the main policies and legislative frameworks with direct or indirect impact on the Nigerian gas industry to test firstly for harmony, and secondly, for effectiveness in achieving the investment growth and efficiency goals required to achieve our national aspirations. We now need to ask some tough questions. Are the current legislations working for investment? Will they encourage rather than discourage investment? Do the regulatory bodies have the right approach striking the balance between the much-needed governance on the one side and then business support on the other side that will ensure the desired investment outcomes? On this note, we do acknowledge that there are steps in the right direction by the federal government, but they must be sustained and have to carry industry along. For example, the PIA is a very good piece of legislation and it’s responsible for some of the positive steps we see today. But despite its forward thinking and business enabling nature, there are still aspects of the legislation that hinder investment and ease of doing business. For example, there are no fiscals that truly incentivize nag and deep-water project development and there are also provisions that give rise to multiple taxation concerns. So, there’s definitely room for improvement. My rounding up message is simply that gas is a relationship that must last long because of the interconnectivity of investments, the required capital involved, and the relatively long nature of contracts in the industry, which average about 10 to 20 years. We need policies that keep the regulatory relationship, shall I say, the marriage interested for the long haul. We also need policies that complement rather than conflict with each other in order to enhance and catalyze the required foreign and domestic investments. Finally, if we stay the course with strong execution discipline that we’re used to in our industry, Nigeria’s decade of gas can truly become Nigeria’s decade for investment.

Industry Address by: Mr. Olakunle Osobu, Deputy Managing Director, NLNG

‘Global Recognition: Nigeria’s Gas Sector Competitiveness on the International Stage’

We are gas, the focus is on gas. Gas is indeed the future. Specifically, on Nigeria’s gas sector competitiveness on the international stage, when you mention the name Nigeria, anywhere in the world, what comes across to the mind of business leaders and investors is simply oil and gas endowment. The entire world believes Nigeria is a bedrock of oil and gas, but these industries do not exist in isolation. We play in the global market space and are exposed to global market dynamics. The world is in a golden age of gas where gas is now playing an important role, both as a clean energy choice and a transition fuel from global demand expected to reach 5.1 trillion cubic meters by 2035. We know that of all energy options, natural gas is far the cleanest emitting half as much carbon into the atmosphere as coal. Natural gas also fundamentally enables other energy systems. It is reliable in providing the base load capacity sources of energy such as wind and solar. Natural gas, no doubt has a significant role to play in the clean future we desire. Now to some statistics, the global population is expected to grow to between 9.5 billion and 10 billion by 2050.

With Africa projected to experience significant population growth rising from about 1.4 billion to 2.5 billion by the same year. Africa is on the brink of a massive takeoff for industrialization with a growing young population, a youth bulge, abundant natural resources and emerging internal markets. Africa’s real GDP is expected to nearly triple from 2.7 trillion US dollars in 2021 to $7.1 trillion by 2050. This potential for growth relies heavily on energy to provide the necessary amenities in line with the UN sustainable development goals. The position of Africa in the global energy markets cannot be overemphasized. Between 2010 and 2020, approximately 40% of all natural gas discovered worldwide was in Africa with most of those discoveries located in sub-Saharan Africa. Africa remains a vital part of the global natural gas network with the continent estimated to hold around 10% of worldwide proven reserves. With the continued growth in natural gas trade, it is anticipated to rise by 36% exceeding 1,700 billion cubic meters by 2050 from current levels. In 2023, about 14% of global natural gas demand was met through NLNG supplies, highlighting the importance of liquified natural gas will play in the global energy mix. Global trade in liquified natural gas reached 404 million tons in 2023, up from 307 million tons in 2022. The United States was the largest exporter shipping 86 million tons in 2023. The trio of USA, Australia and Qatar accounted for 60% of the global NLNG supply. Africa supplied about 6% of the global liquified natural gas volumes.

A situation analysis: For the world to achieve the projected level of growth in natural gas trade, a huge upstream investment of 9.7 trillion is required by 2050. Africa and the Middle East are set to require substantial investments to increase grass production and to ensure that they contribute their share to the supply of natural gas into the global market in the future. Africa must take necessary steps to attract required investments to boost the gas industry from exploration to production. Meanwhile, Nigeria is reported to have the highest gas reserves in Africa making us a key player in the global gas market. However, only about 25% of those reserves are producing presently. According to the Nigerian midstream and downstream petroleum regulatory authority, Nigeria’s gas reserves grew to 209.5 trillion cubic feet in 2022, which ranks as the ninth largest in the world, but the country harnesses only about 8 billion cubic feet per day. Despite this potential, our country has struggled with inadequate infrastructure to efficiently harness and distribute our gas resources. This infrastructure gap has not only hampered domestic energy growth and power generation, but also the country’s ability to export commitments posing a tremendous risk to its viability as a reliable and competitive gas destination.

Furthermore, the current spate of divestment moves in the industry will have immediate challenges and at the same time present emerging opportunities. This wave of divestments began in 2010 and has resulted in the divestment of major onshore assets by the IOCs. The major triggers for this wave have been identified as operational risk management, portfolio rationalization, energy transition commitments, and uncertain fiscal and regulatory regime. We have already seen an estimated $21 billion worth of oil and gas assets divested since 2010. Currently, the country’s oil and gas industry is undergoing a significant transformation as indigenous independents seek to replace the departing IOCs. While the ongoing divestment program does present certain opportunities such as the promotion of local content, improved community relations and potentially more gas production, there are challenges immediately impacting the landscape. Most importantly, funding and financing of existing and future infrastructure and the security of any new investments, i.e. curbing theft, vandalism, and sabotage.

What is our way forward? The PIA provides a roadmap to mitigate these challenges. Its provisions have the potential to significantly alter not only the oil and gas landscape of the country, but also to solve the critical objective of bridging the gaping hole in the country’s gas infrastructure, which thus far has impacted the sector’s competitiveness. The Act introduces several provisions aimed at enhancing the gas industry’s attractiveness to investors and improving infrastructure. These major provisions address historical concerns and belief that the Nigeria’s gas environment was unfriendly towards private capital investors and these deterred foreign investments. A key fact is that a dearth of investors significantly impact capital necessary to enhance gas infrastructure within the country. The federal government in August, 2022 disclosed that about$ 20 billion investment yearly is required to bridge the gas infrastructure gap in Nigeria in the next 10 years. These provisions working alongside the tax incentives established by the PIA, encourages investments from both domestic private groups and foreign interest in Nigeria’s gas infrastructure. All this will facilitate an enabling environment that is light on regulatory volatility and heavy on efficiency of process and operations, encouraging foreign investment, which is the means to bridging the infrastructure gap in a competitive and sustainable manner. We in NLNG and as Nigerians are confident that these steps will reposition our gas industry to ensure our competitiveness in the international market space.

This proverb, “he who pays the piper dictates the tune.” We need to decide here who do we want to play the tune? Is it a fellow African or is it the foreign investors majorly? We need to support the Afrexim of this world and all other investment companies working with us.

Address under the theme, “From Blueprint to Reality: Navigating Nigeria’s Gas Decade and Balanced Energy Transition” by: His Excellency, Dr. Matthew Opoku Prempeh (MP), Minister of Energy, Ghana

The natural gas industry in Africa has significant potential for growth due to the continent’s abundant gas reserves. Many African countries with the resource are now awakening and seeking to leverage their natural gas endowment for economic development, energy security, and to comparatively reduce greenhouse gas emissions. Africa has the potential to rid itself of abject poverty by the commercialization of natural gas for power generation and industrial purposes. Nigeria’s declaration of a Decade of Gas has come at an opportune time to serve the needs of the continent and the world at large, in terms of meeting growing energy demand and also as an impetus for industrialization at a reduced cost to the environment.

Africa is home to some of the largest gas reserves, and Nigeria leads the way with over 200 trillion cubic feet of gas. Others with significant reserves in the Sub-Saharan region include Mozambique, Angola, Senegal, Cameroon. Ghana is also accelerating exploration and development for more production of its oil and gas resources in a sustainable way. In the next decade, we can expect to see continued investment in natural gas infrastructure such as pipelines, liquefied natural gas (LNG) terminals, power plants and petrochemical establishments on the continent, which present a unique opportunity for Africa to take charge of its own destiny.

However, one has to be mindful that, similar endeavours in the past have been fraught with challenges such as political instability, civil and social unrests, corruption and regulatory hurdles. Nevertheless, with proper planning, prudent investment, transparency and collaboration, the natural gas industry in Africa could play a significant role in bridging the energy gap of the continent, whilst ensuring equitable and just energy transition. As indicated earlier, infrastructure development is key in fulfilling the massive untapped potential the resource presents. There has to be adequate infrastructure for processing, storage, transportation and transformation of natural gas resources to meet the market demands. In this regard, the initiative of Dangote to build the 650,000 barrels per day oil refinery and a petrochemical complex here in Nigeria is laudable. In Ghana, we recently commissioned a hundred barrels per day oil refinery to increase our refining capacity and have plans in place to further increase our refining capacity in the near future. Other on-going projects include Tema LNG Terminal and the Tema City Gate and Gas Distribution Pipeline Network. Ghana looks forward to Nigeria as its main supplier of cheap and reliable gas to complement those of our domestic sources and the West African Gas Pipeline. The execution of the Nigeria to Morocco pipeline will also stimulate the patronage of gas and expand the gas market on the Continent, especially in countries along the pipeline route.

Whilst Renewable or Green Energy is often regarded as a competitor for natural gas, on the contrary, the availability of cheap power from natural gas, will further enhance the judicious exploitation of our Green Energy potential. The Continent is blessed with huge deposits of lithium, cobalt, platinum, iron ore, manganese and silica, which are all now regarded as green minerals and are already in high demand. Extraction and processing of these minerals before export will require cheap and reliable energy sources, else the Continent will once again, be faced with the age-old fate of exporting its resources in the raw state and thereby, compromising on value addition. Also, Natural Gas can serve as a source of hydrogen production to be used for similar purposes with very minimal carbon emissions.

The potential of natural gas to transform the African economic landscape is enormous. Adequate indigenous capacity and technology would however, play a crucial role in materializing this potential. As such, promoting local content must feature prominently in the objectives of the Decade of Gas initiative. This without doubt, will help boost employment opportunities, whilst promoting African ingenuity. Africa already boasts quite a number of world class engineers and business men. Furthermore, the Decade of Gas can only be holistic and more meaningful if Nigeria and other producer countries carry the rest of the sister countries in the sub-region along by prioritizing gas supply to them before considering export to the outside world.

With the existence of the African Continental Free Trade Area (AfCFTA), which is another blessing for the continent, it is now much easier to establish an African regional hub gas pricing system instead of the reliance  on hub prices outside of the region as basis for gas trade. The ability of African governments to contribute financially to the development of our natural gas resources is critical to sustaining its viability. It is, therefore, important for us to start mobilizing funds through local financial institutions or collaborations among ourselves. We can leverage the African Energy Bank which Ghana is supporting and whose headquarters Ghana expects to host, to raise competitive financing for the faster development of natural gas projects and the development of infrastructure for research and development, and for processing, transportation and transformation of our natural resources.

In conclusion, natural gas is the main resource to help support large scale industrialization in Africa and bridge the poverty gap that has, since time immemorial existed between us and the rest of the world. More so, this will happen at a lesser cost to the environment relative to the traditional means of achieving same, and help us to transition more equitably.

Panelists: ‘Gas Policy, Regulation, and Sustainable Solutions in LNG, Autogas, LPG, CNG, and Gas-to-Power

1. Commission Chief Executive, NUPRC, Engr. Gbenga Akomolafe, represented by Mr. Amadasu Enorense, Executive Commissioner, Development and Production
2. Authority Chief Executive, NMDPRA, Engr. Farouk Ahmed Represented by the Executive Director, Distribution Systems, Storage and Retail Infrastructure, Mr. Kalu Ogbugo
3. Chairman, UTM Off-Shore and UTM FLNG Limited, Mr. Julius Rone
4. Chairman of OPTS and Chairman Shell Companies in Nigeria, Mr. Osagie Okunbor
5. President, Nigeria LPG Association and Managing Director of CCO Asiko Energy Limited, Mr. Felix Ekundayo
6. Executive Director, Oando PLC and COO Oando Energy Services, Dr. Ainojie Alex Irune
7. Group Managing Director, Techno Oil Limited, Mrs. Nkechi Obi, represented by the General Manager Techno Oil, Mr. Daniel Isiocha

Moderator: Engr. Charlotte Essiet Managing Director and CEO Elint Systems Limited

Moderator

How is NUPRC addressing the challenges and ensuring a level playing field for stakeholders involved in LNG, Auto Gas, LPG, CNG, and Gas to power initiatives?

Amadasu Enorense

In 2017, the National Gas Policy was issued and in 2017, our reserve was 187tcf. And over time there has been continuous growth in reserves. And from analysis done recently, we’ll still see another increase again. If you look at the national policy that was issued at that time, it was issued basically to enhance domestic penetration into Nigeria markets and change the landscape of our economy by using gas. Government, including NUPRC, has come out with various initiatives like the Nigeria gas commercialization program, which is meant to expand the economy, impact the climate, and also to monetize the gas that has been wasted. NUPRC also conducted a study where we discovered uncommitted gas to the tune of almost 57 trillion cubic feet of gas. Now we are working to unlock and bring out the value from that discovery. While the emphasis has been on gas production, the Commission is continuing the process of increasing the reserves. As a regulator, we are looking at encouraging operators in this regard. We are also deepening our operation as a business enabler to create a friendly environment for player in the sector.

Moderator

Shell has extensive experience in LNG and other gas related projects globally. How is Shell leveraging that expertise and resources to support Nigerian’s effort in LNG, auto gas, CNG, LPG, and gas to power initiatives?

Osagie Okunbor

The place to start before I delve into the Shell specifics is just to say that for years you’ve heard somebody like me on this stage express quite some frustration about the lack of movement with this abundant resource that we have, 208tcf discovered and all sorts of constraints around the place, studies after studies, nothing was moving. However, in the past six to nine months I have seen some pretty decent progress. The Director of the Decade of Gas Secretariat in his presentation, essentially articulated end-to-end what is happening in this space. I think the whole initiative of the decade of gas has actually been a blessing to this country. I want to first acknowledge that point that you’re not going to hear me start complaining.  Of course, there are still constraints in the system, but there’s much, much progress either from the perspective of the two regulators who are doing a great job, in my view, in taking on the responsibilities that came with the PIA. Let’s just say the NMDPRA, in terms of setting the price mechanism and just making sure they steward that space has made excellent progress. I have seen big push by the Minister of State for Gas and the Permanent Secretary. So, when you see the likes of Shell taking FIDs early this year, these things are not accidental. Giving where we are going, I am a lot more confident that we finally are chatting a right part, both in terms of export and domestic.

Now to your question. Shell at the global level is essentially the foremost and biggest in the world in terms of LNG. We are the global leaders in that. And one of our key heartlands in the LNG space is actually Nigeria. We play very significant role in Nigeria LNG both as critical shareholders and as supplier. For the first six trains we supplied via SPDC onshore companies some 53% of the gas supplied to that facility. And with the train seven, which is intended to grow the capacity of that plant by another 30%, we are still in place to supply over half of the feedstock for that gas. So, we are key players in Nigeria LNG. When you hear us talk about rebalancing our portfolio and still saying we’ll stay vested seriously in gas, both domestic and export, I expect to see over the next few months with all the enabling conditions I’m seeing, a lot more FIDS coming out the Shell space. I would be quick to add that the one area that we need to fix the issue of our abundant non-associated gas which is 50% of our resources. When we were dealing with the PIB at the time, we decided to pack it because we said we’ll come back to it. I think we are now struggling to come back to it. We heard some good messages yesterday coming out of NUPRC: The Chief Executive essentially saying we have some progress on the way and we should be getting to a place where we can have the right physical environment in a very short time to be able to explore and develop some of those abundant resources.

Moderator

NMDPRA has to be fostering collaboration between agencies, industry players, and other stakeholders to streamline the regulatory processes and articulate the development of the Nigerian gas sector. What exactly should we be expecting from it?

Kalu Ogbugo

If you may permit me, I’d like to first pivot back to your first question, which you were asking NNPC to provide a regulatory insight just to clarify that NNPC is an operator and not the regulator, and then when you then ask the same question to our sister regulatory agency, NUPRC of the upstream to speak to CNG and auto gas, again, those are gas derivatives that only the Authority will be able to give a fuller explanation for. I thought I should give that, and if I can offer the explanation of what the Authority is doing, I will say that within the last 12 months the Authority has continued to work to strengthen the capacity of the decade of gas being the primary platform for bringing stakeholders in the gas value chain together, and also to drive the country in transitioning within the fuel supply space. The Authority continues to headquarter the secretariat of the Decade of Gas and providing all the resource that they need on ground so that these objectives are met. Secondly, during these last 12 months the Authority has deployed its greatest tool, which is its licensing regimes to see that much optimization is done within the markets. In that period, we’ve granted licenses to the gas aggregation company, licenses for gas wholesale trading, licenses for gas trading as well. And we’re in the process of completing our initial due diligence for the gas distribution license, which promises to be a last mile major game changer within the country. There are other things we’re working with stakeholders to see like in the LPG space. We continue to produce locally much more than we consume domestically and with operators, a number of them still exporting when the domestic demands are not yet met. The Minister and the Authority are working towards creating the enablement environment for much domestication of gas because with an increased supply, we hope to see downward trend on the pricing of LPG. The Authority again, is working with the Standard Organization and the Council on Automotive Development to look at conversion.

Everybody’s saying auto gas, CNG, but the experiences from other jurisdictions indicate that it is imperative for us to interrogate conversion technology and its sources. And so, working with those regulatory agencies, we are looking at standards and what the engineering levels should also be. There’s the cylinder as well because with gas not just availability, but affordability is also an issue. We’ve granted a number of cylinder producers within the FCT. There are about two major producers who will be coming on stream very soon, and we’re hoping that all these will drive down the space.

Finally, let me speak to the CNG and all that you mentioned. Mr. President’s administration came with a fresh impetus on how to ramp up the utilization of gas at the last mile, especially as an alternative to PMS and AGO that we see going through the roof. So, what have we done? We’ve sat down with a number of operators who have plans to develop mother stations and daughter stations, and we have a dedicated engineering team working with them and holding them through the regulatory step to make sure that all these things are achieved at the earliest opportunity.

Moderator

With the policies that you’ve seen and how government is trying to ensure that we have a level playing ground, as an FLNG operator what are you expecting that will help in safeguarding the environmental protection and community interest?

Julius Rone

I believe the government has done a lot in encouraging investment from the private sector to develop our gas resource. The decade of gas is an instrument that has supported investors and given clarity on where the government wants to be in the next decade in the development of our gas resources. Also, as a follow up to that, the government has passed the PIA, which has also encouraged the upstream operator to invest in the upstream, because if you want to develop your gas, someone needs to spend that money to bring the gas from the ground to where the midstream operator can participate, and then it flows down to the downstream. So, it’s all an integrated project. You need the upstream, you need the midstream, you need the downstream so that you can benefit the last mile, just like what the regulator was saying. And we’re quite pleased that the current administration has put a lot of focus on gas. And when the president came in less than 50 days in office, we had the opportunity to visit. We visited him with our team of investors, and he gave a clear directive and said, look, we believe that like the honorable Minister for Energy, Ghana said, Nigeria should take the lead in Africa and others we follow. The President said at that meeting that he’s highly disappointed that we have a lot of offshore gas that is stranded. There’s technology to make it work, and we believe this technology has been proven, and that’s why we we’ll support Nigeria to lead Africa in terms of the floating LNG technology. Currently in Africa, there are like three floating LNGs in the continent, and all the three FLNGs are owned by foreigners. It’s not that we don’t have the capacity to develop such technology, but you need the enabler, which is the regulator, the government, and the framework. And we are pleased to say today that framework is in place.

In the second quarter of this year, we announced a floating LNG FID for Nigeria, and we believe that by 2028, Nigeria will have our first floating LNG indigenously owned: Africa one. Nigeria is showing the way, leading the way, because we believe that the only way to develop as Africa, we must show to investors out there that we’re serious and we’re ready to attract that investment. And that’s the reason we’re putting the best foot forward. We’re developing this project in line with international best practice, and we’re pleased to say the regulators are supporting this project. The National oil company has taken a step further as an entity that is commercially driven. They’ve taken an equity on this project. They’ve taken a 20% equity. They’ve guaranteed the upstream part of it, which is the most significant part because if you put all this investment together and you don’t have the feedstock, then you’re going nowhere. Now, the government has taken a step forward. Nigeria require close to 2 million tons of LPG per annum, and what are we doing? We’re only having 45% of that from Nigeria LNG, and the government says, look, we support this project and we don’t want you to export the LPG out of this project. Domesticate it, bring that volume into the market. So, at the end of the day, if we have a couple of this project Nigeria and the rest of Africa will be energy sufficient and independent, and that is the directive and that is the way we’re structuring it.

And like you said, gas is huge investment and it takes a lot to mature a gas project.  If you’re looking out to get certain volume in another five years, you need a planning to start from today. So, we are very pleased to see that the regulators have done so well. Like the MD of Shell said, there need to be more backup in terms of reserve. There must be clear path to harness those reserve to the surface in order to enable other investors to tap into the gas revolution that is going on in Africa and Nigeria. And because the rest of Africa is waiting for Nigeria to become energy dependent from its own resources. We are going to do our best within the energy space, hoping that with the support that we’re getting from the government and the regulators and all the partners involved in the upstream, definitely we’re going to see more development in the gas sector simply because the projects are viable. We need someone to galvanize all the stakeholders to achieve the projects and to bring those gas that is required for the energy transition for the continent and the world.

Moderator

Since the LPG has emerged as a viable alternative fuel source, how is the Nigerian LPG Association advocating for policies, regulations that promote the adoption of auto gas and LPG as sustainable solutions for transportation and cooking?

Felix Ekundayo

Let me dispel the myth about resilience. We are a very resilient people, but at the end of resilience is exhaustion. And I do believe that we are at the point of exhaustion. I have been in this industry 35 years working and as a business owner, and there are two things I’ve learnt. One, I have never come across an investor who chooses to go into a market where the primary competitive advantage is resilience. I have not seen it. They go where it is clear, efficient, and you get your returns out. The second thing is that I have finally figured out how to calculate the return on investment on resilience. It is usually negative and at best zero. Break it down into what do our members see, because they’re the ones required to drive the conversation and investment. Let me give you random examples. A member wants to start up an auto gas facility in a state that desires to have auto gas. He buys land for X. The assessment for duties on X was 125%. How do you pay more than the value of land for the assessment that you are invited to negotiate? You have situations where new members come in and they say, it has taken me six years from when I retired to when I finally got my business going because of various regulatory hurdles. And it’s not about the regulators sitting here. We’ve all done good work, but we need to do more work. We have other places where you have members who are developing and in the middle of development where they have all their permits, they get frivolous stop orders. It’s just another road barrier. We can’t move forward this way. We need to address this issue. We speak to the ease of doing business. I would rather start and frame it properly. We need to reduce the difficulty of doing business before we can now start to say, how do we even make it easier? What’s the solution in my view? And how do we move this thing forward? We have the opportunity to displace diesel from 20,000 base stations. We have the opportunity to convert millions of tricycles to gas, but without the pace of, first of all, streamlining regulation towards revenue generation than assisting business.

We need to sit down with the players, the people at the confluence to reduce the number of steps required in order to be able to deliver these solutions that is primary requirements. So, more stakeholder interfaces. Secondly, the speed at which the changes occur needs to improve where conversations go of the value chain and come back to provide a solution; that also needs to improve. Those are two very primary and urgent issues if we are to realize the rollout of auto gas.

Moderator

Techno Oil Limited is actively involved in downstream. How is your company leveraging its expertise to promote the adoption of auto gas and other clean energy solutions in Nigeria?

Daniel Isiocha

Let me ride on the contributions made by our NLPGA President. Techno Oil is an integrated energy company, with investment across the value chain of the LPG sector specifically.  We have a coastal depot, a cylinder manufacturing plant just to contribute to bridging the gap in the entire LPG value chain. Our interest is in road-to-market, where we try to eliminate some of the bottlenecks and get LPG cylinder bottles across to Nigerians. We appreciate the regulators for always being with us. Recently we had an engagement with the regulators where our import licenses were speedily approved and our depot licenses were speedily renewed. We want to see more of that going forward. Speaking to these challenges, the federal government needs to also address infrastructural gaps. They need to collaborate to ensure that some of those gaps like security and road infrastructure needs to be tidied up.

From the benefit of where I sat at our exhibition booth since the Summit began, people have come around to question the almost daily increasing cost of LPG. There are those who indicated their desire to invest in the sector but are unwilling or afraid to engage with the regulators and government agencies. A retiree said she has about 20 million Naira for the investment but does not know how to go about setting up an LPG retail shop. We call on government to de-risk whatever bottlenecks there are to make it easier for present operators and new potential investors. This Summit gives us an opportunity to look at these issues and resolve them amicably. I want to advocate the integration of the usage, safety and benefits of LPG into the senior secondary school curriculum in order to promote a generation who are not averse to using gas. Techno Oil is already sensitizing students on the diverse use of gas so as to increase adoption. The company recently partnered with UK AID and USAID to distribute about 7,000 LPG gas stoves to some rural women in Lagos, Imo and Ebonyi States. I am urging government to partner with us to scale this. Lastly, our experience in Ghana during a working visit two years ago exposed us to innovative deployment and ownership of cylinder bottles. Each bottle has a QR code around it and the client doesn’t need to buy the cylinder or pay fully for it. Possession of a cylinder is based on a kind of corporate cylinder ownership model where you pay incrementally.  This is a model Techno Oil has been advocating for.

Moderator

With the measures that Oando is taking to ensure sustainability and resilience of its gas supply chains, particularly in light of revolving market dynamics and regulatory requirements, how have you positioned your integration to gas, to power solutions into your operations?

Ainojie Alex Irune

As Nigerians, we need to start to reflect: there’s enough intellect and horsepower. What to do is not our issue. As a country, we’re getting to that point where we need to collectively start to reason these responsibilities. We have a responsibility to ensure that every Nigerian has power, not a responsibility to feed the coffers of foreign companies. That simply is the approach that Oando takes – provide for the people in-country. Through an acquisition of Unipetrol and Agip downstream, we created Oando – built the largest downstream company in four years with 500 filling stations across the country. One in every five vehicles filled with petrol in Nigeria was filled by an Oando filling station. We divested from that business into the midstream. We have built almost 300 kilometers of pipeline taking gas to factories, the likes of Nigerian Breweries, Nestle. Locally Nigerian, the Lagos gas pipeline that rolls all the way around and has just ended up on Ahmadu Bello right now was a project that was done by now, Acela, formerly Oando Gas and Power. In the upstream, we’ve done exactly the same thing. The point I’m making to you is as of today we supply we a part of the nave JV that supplies gas to the Blackstar Opkpia 1 power plant. We also have Indorama and all the other major gas off-takers that we feed gas to. That local value add is entrenched in our own DNA in the sense that whatever we build, we ensure the first beneficiaries are Nigerians, and this must be the way we approach, not just gas development, but a lot of the things we’ve spoken about over the past few days. I want to take a final minute to just speak about the point of ensuring that these projects get done. Each minister that has come over the last four administrations has given us a date for the completion of OBiO V. We can’t move gas from east to west, 900,000 square kilometers of a country. So, these are the fundamental problems we need to address – pace, and I think one of the panelists spoke to that. How do we move things forward in other parts of the world? So I mean, the point here is really the fact that we need to be one Nigeria centric to understand what our responsibility is, and there is a clear dichotomy between where the capital is coming from and where the capital has to return to. And that speaks directly to the Energy Bank and Africa taking ownership of that development. We see today in Silicon Valley, a lot of American millionaires willing to back local American companies, but we don’t see the same in Africa. All our billionaires want to go and put our money on that side as well. So, we need to come back home and realize that this is where the value is. It’s just that you have been convinced and engineered over time to believe that you are the beggar of value, not the owner of value.

Moderator

How can the IOCs get gas to LNG despite the challenges?

Osagie Okunbor

Like I said earlier there are majorly four gas suppliers, Shell, Total, ENI, and AGIP. Oando is part of that venture as well. Two years ago, the Trans Niger pipeline, which is the main line for gas supply, suffered serious security issues that it became so bad that we had to shut down that line for a year. That was the lowest of the lows. I did say yesterday that we are piping out the EVP upstream for NNPCL to underscored that point. At some point it was only Total that managed to keep its supply obligations. Shell could only supply almost half of its obligation of 1.8bcf of gas, which is over 50% of the total supply by the four majors. So even with Total doing its best, it was always going to be difficult. AGIP was also struggling, and these were all down to just issues of vandalization of our pipeline systems. We shut down because once you can’t evacuate your condensate your gas goes down. Our reconciliation factor, which is essentially what you put in versus what comes out on the other end came down to 10% at some point. This meant that 90% of what you put in the line didn’t get to the end of the line. Even from a basic responsibility perspective, we couldn’t continue to run that line. So, we had to take it down. And that had a big impact on supply to NLNG.

As Alex just said we’ve had promises and promises. We have all complained as leaders in this industry. I said at the beginning that things are turning for the better. It doesn’t mean we are there yet. However, in January this year, we supplied probably the highest volumes to Nigeria LNG in three years. We supplied something like 1.7bcf. Two years ago, we were struggling to supply 900. Unfortunately, just this month March, the problems are back again. I give credence to some of the key security officials of this current government, such as the security agencies and the National Security Advisor. They have paid the kind of attention to security in the Niger Delta that we have not seen in a long term. Security has direct impact in terms of production. On Monday, one of our most important lines, which comes out of our SOKU gas plant and supplies a significant part of gas to NLNG suffered theft from seven different points on the line. We have had to take down that line. Notwithstanding, I see things improving substantially even though my colleagues in AGIP might not be so optimistic because of the kind of problems they are facing on their pipeline system.

Felix Ekundayo

Auto gas LPG will enable us drive a lot of fuel displacement, a lot of balance of payment issues. We need to focus on auto gas LPG with the utmost priority at all levels, not just for trucks, not for cars down to petrol generators, down to KekeNAPEP. This for us is a way of doubling or tripling our current LPG usage in Nigeria.

Daniel Isiocha

As regulator in the upstream space, we’ll continue to work with all the operators, all the stakeholders to ensure that we have an industry that we are proud of. We understand that we are not there yet, but we believe that it’s works in progress. We all need to work collaboratively to get to where we are going to. We’ll continue to enable our business in every way we can.

Julius Rone

I believe that if this synergy that the industry is achieving today driven by the Minister for Petroleum and the able Ministers for State (Petroleum and Gas) continues with this momentum and we keep our eyes on the ball, we will definitely achieve the decade of gas objective, which is to bring gas to the last mile of the Nigeria home. Gas is our transition fuel, we have it in abundance, and the investment is out there to achieve our objective.

Kalu Ogbugo

Let me quickly just flag for the industry two or three things that are most critical, which the Authority is at the threshold of unveiling in the near term being in a few days. We’ve just concluded a first revision of the network code and in a few days, we’ll be unveiling that. Secondly, most critical to the strategic industries are the gas-based price. Again, the PIA puts 1st of April as the terminal date annually for us. In a few days again, the authority will be unveiling that. Thirdly, Mr. President reconstituted the MDGIF, which is our greatest tool for seeing that the right investments are made infrastructure wise for gas. That Council is poised to begin to operationalize disbursements and all. And they’re looking at all the frameworks that need to drive that process. But I must also add the caveat that the fund is only targeted at de risking the value chain between the mid and downstream. Ultimately, our sister agency, the upstream commission, will still have to see that the commitments by operators to ramp up production, evacuate those so that the midstream can begin to process as well and transport them out are met. With those, I think that the authority is ready to move this gas sector to the next level.

Osagie Okunbor

I will continue my pitch for the decade of gas framework because it brings all of us together, the regulators, the producers, ministers, everyone in government, and we articulate all our issues there. I really want to make a pitch that we keep fit with that process. It is working, and we should just make sure we keep the faith and don’t be tempted again to start getting creative around it and create a bit more problems here.

Ainojie Alex Irune

I think for me, it’s just for us to take on that sense of responsibility. I called yesterday for a higher order of ourselves to literally lean into what we have to do with a bit more pace, a bit more certainty and collaboration. But most importantly with gas, when we speak about gas, we have to have the entire value chain in mind. The decade of gas gives us that opportunity to focus on where the resource is coming from, but also start to embed some of these downstream obligations that impact the Nigerian people.

Daniel Isiocha

Today a cylinder bottle sells for between 40,000 and 45,000 Naira. And you all know how much the minimum wage is. So, we’re calling for more collaboration, collaboration and collaboration to save our women, to save our children, to save our environment.

Panel Session 9: Gas Stakeholders’ Conversation

Keynote Address by:  Mr. Effiong Okon, Executive Director, Seplat  Energy

Panelists:

1. Chairman, GCEO of PANA Holdings Limited, Mr. Daere Akobo
2. Managing Director of Banner Gas Limited, Mr. Nuhu Yakubu
3. Group Managing Director of OiData Incorporated, Mr. Emeka Ene
4. Head Commercial Research and Strategy, Nigeria LNG Limited, Mr. Chima Mba-Kalu
5. Managing Partner, The Firma Advisory, Ms. Chinenye Uwanaka
6. Chairman, GCEO of Oilserv Limited, Engineer Dr. Emeka Okwuosa, represented by Managing Director at Oilserv Ltd. Mr. Nnanna Anyanwu
7. Executive Director, New Energy for Seplat, Mr. Effiong Okon

Moderator: Mr. Salahuddeen M. Tahir, Head Assets and Investment Management at NNPC Gas and Power Investment Services, Chairman, Society of Petroleum Engineers Nigeria Council

If you look at what gas brings to the table, whether it’s power, building materials, clean cooking, access to energy, fertilizer, CNG, LNG, there’s a whole wide range of why we believe we have a very strong investment case for gas. Hence Seplat has actually taken a lot of very bold decisions to make huge investment in this space.

Nigeria is one of the energy poverty capitals of the world. There’s issue around energy reliability, affordability, and sustainability as well. It’s a big challenge for us. When you look at the energy value chain, there’s huge infrastructural gap, whether it’s housing or infrastructure to move materials around. But there’s no commercially viable substitute and that’s why gas remains very critical: whether you’re looking at cement, glass, steel, all these industries that require gas either as feedstock or as fuel to power furnaces, for example. The value of gas rest on Nigeria’s increasing population that is projected at about 400 million people by 2050; the need to decarbonize our environment in line with climate change Paris protocol; reduce reliance on petrol; transportation; etc. Generally, if you look at a lot of decarbonization strategies globally as it concerns the transportation sector, there is serious leaning towards electric vehicle (EV). However, in much other areas the world is still massively demanding gas and the forecast is that this demand will continue to rise in the next 30 years. Europe is really desperate to get gas post Ukraine invasion and, in the US, the demand is quite massive. The major growth for gas is going to come from Egypt, Nigeria and Mozambique, those are the hubs. If you look at all the FIDs taken so far, Nigeria, Egypt and Mozambique will drive that growth in gas in the next decade. And then if you look at the sustainable Africa scenario, you see Africa playing a major role in terms of its gas resources. Monetizing that gas resources in spite of all its challenges, Nigeria fits nicely into that bulkhead. We see opportunities in the wide range of the gas value chain (exploration potential, gas processing, distribution and marketing). The point is that the PIA gives us very robust fiscals if you want to invest.

The challenge then is how to meter gas between the upstream and the midstream side of the business. Because it’s much lower taxes and much lower realities on the midstream side compared to the upstream. There is challenge of low infrastructure development, but this also opens up massive investment opportunities. There is a lot of interest in gas penetration and this is ramping up investment in LPG and CNG. Beyond the NGIC infrastructure corridor, investments are opening up to get gas to the last mile. That’s where all this virtual pipeline gas, LPG, CNG comes into play. Power generation is another area begging for investment and to drive decarbonization. As we shift away from coal and diesel, you’re pretty much helping with sustainability. There is huge potential for smart grid investment and local distribution of power. We acknowledge the challenge of billing hindering investing in power. It is important to make investment case for that. This will include how to get paid if you sell power to the last mile when there are no meters installed? For SEPLAT we see opportunities in all these challenges. The value chain is massive to play in. SEPLAT is in the upstream side and also in the midstream side. Now we’re looking at investment in power from gas and also from renewable energy.

Moderator

To kick start the panel discussion I will ask each panelist to speak to the topic, “Blueprint to Reality: Navigating Nigeria’s Gas Decade and Balanced Narrative on Energy Transition” in just two minutes by way of introduction.

Effiong Okon 

Gas actually came into big time play after the Ukraine invasion by Russia. Before then, everybody was running away from oil and gas industry because of the issue around climate change. Today there’s a big race to get gas to the market. Qatar is doubling its energy export capacity from 77 million tons per annum to almost 120. Big gas projects are springing up in Mozambique. Nigeria is also trying to push Train 7 and then there is the decade of gas initiative, which is trying to add additional 4 million scf of gas per day by 2030. The slow pace of moving from blueprint to reality in Nigeria is kind of frustrating. Nigeria should be like 10 Trains of LNG today. We should be like 10bcf of gas domestic capacity, but again, we can’t help but keep talking about the same thing until it sinks in with government. To be fair, we’ve made some sort of progress in terms of infrastructure to investment. SEPLAT is doing roughly about 300 million scf of gas into the domestic market. And we will add an additional 300 million when the north comes on stream with our partners, Sapele will add 100 million, bringing our input to almost 800 million scf of gas into the market this year. SEPLAT will also bring in LPG to support the economy and energy decarbonization. Regulation has changed bringing in lots of incentives. The PIA is enabling invest in the midstream with low taxes and low royalties. Government is doing its part in terms of infrastructure and it is time for us all to just try and get on board and see how we address all things.

 Nnanna Anyanwu

Let me begin by saying something a Japanese person said to me a couple of years back. He said, there is a fundamental difference between you Africans and those of us who are Asians. And this is one of the reasons why I came back to Nigeria anyway. He said, in Asia we say very little, but we do a lot. In Africa, you say a lot, but you do very little. So, I changed my trajectory and came home to make sure that we can begin to change that narrative.  The reality is that our pronunciations, unless it is backed up with very clear frameworks, plans and actions, would never translate to anything. If we want to transform our nation, if we want to be able to harness our gas capacity, address our energy issues, it is going to take a lot of hard work. And it’s the hard work that sometimes don’t attract attention. Is Nigeria really ready for the hard work required to achieve everything that we have promised. Although Oilserv has maybe deployed about 105 oil and gas projects in Nigeria, we are active players in gas transformation, gas transmission lines and the distribution lines, I think that we should have been targeting about a thousand or more projects to be able to move from just mining our resources for exports to be able to translate that to value for us as a country.

Chinenye Uwanaka

Looking at Nigeria where we are at the moment, if only we had actually implemented all the blueprints we have amassed – the gas master plan, the energy transition plan, policies, regulations provided for in the PIA – the reality would have been better. The challenge has always been implementation. Implementation is hard for us so we fail to implement because either we don’t have the right people in the right seats sometimes or because there is capability trap where the agencies or the officer or other stakeholders who are involved are not really able to drive that process of implementation. The private sector should lead in identifying what the challenges are and proffer solutions that will enable us move from blueprint to reality in the industry.

Chima Mba-Kalu 

The decade of gas is one that has brought huge opportunity for the nation itself to harness and commercialize its resources. But one thing to mention and we need to be aware of is the fact that the energy centers and demand centers are shifting gradually from typical centers that consume quite a lot of the energy that we export. Nigeria LNG is into exportation of natural gas. That shift is bringing the global south into the picture a lot.  There’s a lot that is hinged on population and gross domestic products (GDP) and both combined is pointing to by 2050 a huge shift in where the energy demand centers are going to be. And it’s going to be more in the global south (Asia Pacific and Africa being in the middle of it). So what Nigeria then does about what her gas resources are is hinged on three primary things. The first one is realizing that the opportunities are there in the decade of gas. However, you do not have all the time in the world to wait to do that. There’s a limitation on the time, because guess what? The renewable energy drive is ramping up at a massive stage over this past 10 years, while natural gas utilization has only risen by 2% per year. However, in the next period up to 2050, it’s projected to rise by about 0.4% only for that period. And it is the only fossil fuel that will be rising within that period. Others are going to be going down. So, there is that shift that is happening. And in that sense, the earlier you went into the market and got the value you need to get over your natural gas, the better. The second thing is to say that for natural gas to then be the transition fuel it is, and for Africa to benefit from it, there is necessity to make sure that it’s decarbonized. The regulations that we’re looking at and we’re speaking to in energy transition is hinged on a global point of view of making sure that we reduce global warming. So, we need to bear in mind that that is a threshold that we need to focus on and make sure that it is decarbonized and it is available to people. The final point is that LNG itself is flexible and has been proven with what we experienced with Europe having the energy crisis they had in 2022, and how LNG sprung in to make it work. It’ll be a catalyst still to drive this. Its growth is not going to be astronomical as we expect, but riding on gas, it’ll be crucial to help really drive this decade of gas down. And Nigeria LNG has been in the middle of this from the beginning and will continue to the push.

Emeka Ene

Gas is not oil and I think this is the challenge that we face: for we are taking our more than 60 years’ experience in the oil business upstream into the gas business. I think that’s part of the challenge. People are jumping into the gas space thinking that this is just an oil block, but the gas business is a business of a thousand handshakes. We have to understand that end-to-end a gas contract of 5 years, 10 years, or 15years or even 20 years, requires that you’re able to have security of supply throughout that period at a certain volume. And to achieve that, you have to do a lot of talking. Of course, gas is a major enabler because wherever gas goes, economic development follows.

Nuhu Yakubu

We can no longer afford to be reactionary or want to change the agenda the way it suits us. It is important that we began to educate our people to take proper ownership of our gas resources. It is the ability to drive gas intensive demand applications that will begin to open up the frontiers, open up opportunities. There’s no reason why every community in this country should not have some functional gas applicable project going on, whether it is natural gas or LPG or any other forms of gas. We must begin to remind ourselves that there has been series of gas policies and plans that we should put on the table and streamline to our best interests. We must also begin to call out ourselves, call out the showstoppers slowing down our progress in moving from blueprint to reality.

Daere Akobo

The problem is that planning is important, but most important is the plan in a plan. And I’m very sure that today with that theme, we should be able to demystify and be able to understand why we are failing as a country. It’s all about connectivity.

Moderator

Is Seplat Energy walking the talk in its operations and dealings, Is that why the name change added Energy or for sustainability?

Effiong Okon 

For me it’s about outcomes and that can be attested to by the quarterly results we publish as a public listed company. We have a capital market day every July, every two, three years. Grab a copy of the report and see for yourself. In 2020, we developed a new strategy for the company and that influenced the change of name from SEPLAT Petroleum to SEPLAT Energy. This new strategy underpins how we deliver our sustainable business and drive energy transition. It rests on three elements. One is to drive social investment. Without the right social investment, you really cannot operate in the Niger delta, which is why we’ve been there for 12 years so far and have been very successful. There’s been no invasion by the community by virtue of all investment we make in the community in health, in education, etc. The second element is environmental care and reporting. Our industry is not really bad. The problem is the impact of our industry on the environment. That’s what’s bad. Thirdly, we deliver value to our shareholders. The framework of our scorecard is tied to sustainability, ESG, safety.

In terms of capital allocation and the investment we’re making today, we’re pushing lots of money into the midstream business. The truth is the highest return on investments still comes from oil. In terms of revenue, about 70% comes from oil, 20% from gas and 10% from renewable. We’re decarbonizing our business by investing in ending routine flaring across all facilities by the end of this year or early next year. This puts us ahead of the World Bank’s commitment to end gas flaring by 2030. To drive sustainability, we’re looking at investment in renewable energy, which is quite tough because the Nigeria grid doesn’t work so you cannot go into solar at scale. We want to invest in 500 to 1000 megawatts of power for distribution, but the problem is that the mini grid solution is very fragmented and so hard to make a very strong business case.

Moderator

How can we, the government, the public sector, the private sector, the investors, collaborate towards ensuring that we not only complete our projects effectively, but efficiently and timely to ensure that we get value return for a continuous expansion of those desired facilities to monetize our gas?

Daere Akobo

Let’s look at the definition of value. Value is a number. I think the very first thing is to realize that we are in the state of complexity. And when there is unknown, it becomes what I call industry clock speed. The very first thing to be done is how do we see Nigeria as a hardware and a software? We have the resources, but we need the software to be able to plug in, to play the hardware. There is need for us to “datarize”. We need the data refinery. I’m happy to tell you that we are creating the first data refinery in the country. This is the time that we need to take into position what is called the fourth industrial revolution, which is data refinery. Data refinery is all about data governance, data acquisition, data display, and data democratization. You cannot develop this country without understanding the data; so, we have political data. But we also need to have resource data. We have democracy, but we need to also have democracy of resources and to democratize resources you need to understand the clusters where these industries will be plugged in. We need to start to map wherever we have the political numbers, where we have the people so we can group industry clusters around those people so that they don’t continue to break their firewood, burn the firewood and use. Talking about finance, where are you getting finance and where are the finances going is important. There is a calculated attempt by the financial industry to steal the show and we must stop it. I want to ask technology people, because we know you need to be innovative. You can’t develop a nation without technology. It is the excess technology that you deploy that will give you economic wealth. We also need to talk about collection. Legacy debt is coming because there is no truth table. The industry requires a truth table and accountability from the source of production. We need to adopt technology, new technologies in a way that we can continue to know where these oil or gas resources are. They are there around the North of the country. Because the traditional technology could not find them, does not mean that they don’t exist.

So, to shorten that infrastructure gap, we need to get new ways of doing things. And measurement is very key. Thankfully the regulators have just rolled out a new metering policy that talks about metering architecture, metering deployment, talking about classes of measurement, and also finally talking about dispute resolution. You can’t resolve metering problem with lawyer speaking grammar. No, it has to be purely arithmetic to be able to talk about the reality of the problem.

Moderator

How can we actually use innovation, automation, and technology to deliver the blueprint to reality?

Emeka Ene

There are five reasons why natural gas infrastructure in Nigeria is like an onion. Gas infrastructure is an onion because you peel it layer by layer, but tears will flow when peeling it. If you’re in the gas business, you can feel me. You really have to be ready to shed tears. And what do we pick up from this? That the infrastructure development strategy around gas has to be end to end. In other words, you have to connect the gas to the market and not have stranded to gas. Very important. Now, once we can get the technology going, and if you look at the gas value chain, you can tell straight away that when E and P upstream starts and stops, we produce and sell your oil. But to get gas to the market, you’re going to jump through many hoops. And if you look very closely at the gas infrastructure map for China, it looks like an onion. The one for Europe looks like a very fat onion. The one for the US looks like an onion. Well, the one for Nigeria looks like maybe a cassava roots, but it’s becoming an onion. I think it’s important because you cannot sell onions without talking to one another. Therefore, open access is critical for our business to work. There must be the willing buyer, willing seller. The network code needs to function if we’re going to connect gas to the market. You cannot sell onions without talking to one another. So, investing in gas is like some of our wallets. It’s like an onion because if you open it, it will make you cry, and for that reason, gas infrastructure de-risks, gas intensive projects in a very significant way. And I’ll show you from a slide from 2017. This is the Nigerian gas infrastructure. You will see that all the triangles there are power plants, all along the line are power plants, cement plants, industrial parks, all the way. So, gas enables you to de-risk your projects. Eating suya without onions is like building gas infrastructure without any gas to put inside. You understand what I mean? If you don’t put onions inside that suya it can never taste the same. What does this all mean? That interconnectivity guarantees the security of supply. This is how to make the gas business work. The Kwale gas gathering hub, essentially located in Kwale, allows 300 million scf from all the stranded gas producers in the area to enter the market by creating a hub. And these connectivity hubs are very essential if our gas is going to get to market. And last count on the website of the Nigeria Gas Flair commercialization scheme, there 145 flare sites scattered all over the Niger Delta. We need to have gathering-hubs that bring them all together. When orange taste like onion, the knife takes the blame. You all know what I mean? Okay. But you see, we fail to understand that it is the person who gave us the knife that should be questioned. And if you look at this slide again, this is Europe and US. You can talk about Japan, you can talk about South Korea, Canada, China. The moment regulators created an open market for gas, the gas volumes increased and its impact increased on the economy. It’s almost a direct correlation. So, it’s very important that we look at our regulators, those who are holding the knife and not blame the practitioners for making orange taste like onion. You know, a woman or indeed a man always has half an onion left over no matter the size of the onion. I just found out that they never finished the onion. There’s always one quarter of onion left behind for the next pot of soup. Gas infrastructure is an enabler of development. Therefore, know your onions.

Moderator

Emeka is actually right. Today, if we have the right infrastructure, the people will come, the gas will flow, the off-takers would come. So, we need to think in that light. I just needed to put that in perspective. Nnana, speak on infrastructure. Is it achievable? What are we doing? How soon can we get that infrastructure?

Nnanna Anyanwu

Is it possible for us to develop the infrastructure? At Oilserv Ltd our job is to build these pipelines. We started off with a model where we work with the owner to develop a concept and then they fund and we build. But then we realized that some of the businesses across Nigeria have issues around their financial fundamentals, which makes it very difficult for them to be able to access capital to develop these projects. So, what we began to do was think ahead and say, well, how do we ensure that we can co-develop these facilities and pipelines, but also how do we co-fund these facilities and pipelines such that we can then remove a lot of the pressure that is currently on the owners of these infrastructure? And that has defined the new mindset as well as the new strategy for the business going forward, because we suddenly realize that our financial fundamentals were stronger and therefore we could go to market. I realized that where the pool of cash was is not with governments or state-owned enterprises, but on the tier two to tier three people who are small to medium scale investors who are willing to take a risk. So being able to access these people can actually translate to value. So, while governments were struggling to find financing, I was able to access money. The point is we’re replicating the same model for Oilserv Limited. It is possible to develop Africa’s infrastructure if we start talking to the right lenders and local EPC companies are beginning to have increased capacity to be able to deliver them.

Regarding the issues around funding, the local capacity is increasing. However, it must be considered that Nigeria does not exist separate from the global environment and that we are intensely competing with every other country for access to technology and access to finance. Secondly, we must form both local and international partnerships in order to gain access to the technology we need to build the infrastructure that we want. This technology can then be adapted for local specific usage. Once you have finance and technology, the third most important is investment in people. Because the future of our country, sorry to say, is not gas. The future of Nigeria is its people.

Moderator

What regulation do we need to ensure that we bring in those investors who will finance those pipelines and ensure that the gas volumes get to the most downtrodden? What should we do to make it right, to bring in those investors?

Chinenye Uwanaka

There is a contradiction when you look at the policy and regulatory landscape of the energy industry in Nigeria. Since the first day of this Summit there has been a back and front of whether gas should continue to be a transition fuel or a destination fuel. If there is no broad or grand vision and plan, it’s going to be very difficult to know where our destinations are or where we’re trying to get to and the milestones that we’re trying to hit are. So now someone made a very good point about the fourth industrial revolution. Nigeria is poor because we haven’t industrialized. Africa is poor because we haven’t industrialized. If we want to industrialize, we need power. We need energy. When the country is fixed on a vision, then it will be guided on what global agreements or protocol or conventions it will be willing to sign. Developed countries signed the Paris agreement because they are transiting to cleaner fuels. Nigeria signed the same agreement even though it knows it would hindered its industrialization prospect. There is a contradiction here and we’ve signed a lot of these international treaties. We need to choose what we want to do as a nation. If we want to industrialize, then we must do so quickly because time is running out.

In Morocco, I was told that it is too late for Nigeria to think of industrialization. They said at the conference that the world has moved on. That other nations are doing it more efficiently and cheaper. That the funds are not there. Basically, they just painted a very bleak scenario. So, we need to articulate what we want to do. Yes, we have the PIA, we have a lot of policy documents and regulations, but there’s no coordination. There’s no vision as to where we’re trying to go to as a nation so that we can quickly rally everyone and build elite consensus. Nations don’t develop if there’s no elite consensus. The local content law in Nigeria is great. We need to go back to the drawing board and articulate whether we want gas to be our destination. Some countries are still using coal. So, what do we want to achieve in the short term to medium term? Secondly, is the issue of the rule of law enforcement of contracts and access to justice. That’s one of the things that has stalled this sector from really leapfrogging and getting to where it’s supposed to be. If you have laws and you cannot enforce it, what’s the point of the laws? So, we have to talk about our judiciary. I know a lot of the investors that are supposed to bring this money do not want to come to Nigeria because of corruption. Potential investors I have talked to say they don’t want to go to jail because of a corrupt government official in Nigeria. I don’t think that our issues are regulations per se, or laws, but that of coordination. We’re very used to copy and paste. We’re very used to borrowing what has worked in one country. We’re not looking at the data-driven, evidence-based approach, looking at our context, looking at our communities. A lot of the communities that host our energy resources are poor – they don’t have power. We need projects like the geometric power project. We need out of the box thinking. We need a very safe regulatory environment where people can enforce their contracts and we can have the rule of law prevail.

Moderator

Tell us what Nigerian LNG is doing as you work on Train 7 and already thinking of Train 8? So, let’s hear your success story, what you are doing right and what you are doing to gain sustainability.

Chima Mba-Kalu 

Well, you cannot really succeed without being competitive. And our vision as a company has been to have a globally competitive LNG company that of course is delivering energy all over the world where it’s needed, but helping to build a better Nigeria, because our eyes is always in Nigeria. And over the years, what we’ve done is stretching out the arm, putting up the industry, the LPG sector, the LPG, the work we did in that space, the advocacy with the government on very different fronts. All those points to putting Nigeria on the map out there. We have fleets of vessels. There are 21 of them right now because we are on a path towards renewing our fleet to make sure that we stay competitive in the business. And we’ve had to let go of two of the old steam vessels that we have so that we can bring in others. There are two new ones coming in. One is coming in towards the middle of this year that will enable us to cut down on our cost. And all those in delivering all this, we’re put in Nigeria on the map at every point. Our fleet is really run by predominantly Nigerians, almost a hundred percent. And our management has also grown as well: “Nigerianization” given us that flail of having almost all Nigerians running everything else in our system. It remains a success story that all of us are proud of because we couldn’t have done it alone. But competition typically will be defined as having value, function and risk or as NLNG Managing Director would say, “remaining competitive will require three things: upping your revenue, reducing carbon, and reducing your cost.” In upping our revenue, is the drive towards getting the seventh train up and running to ramp up our profile and take us from being the sixth in the world to the fourth of exporting nations. This is on course and nothing can deter it. There are challenges on the way of course, but we stay focused and we are on it. Just last week it was reported in the news that the largest main cryogenic unit in the world has been installed in our facility in Bonny right now to make sure that dream is realized by 2026 as we plan it. Apart from having Train 7 come in, we are pushing hard on other remarketing activities. As a company we have sold our volumes over years, but as a term of contract comes to an end, we have to go out to the market and remarket, especially now that the market is shifting. The market centers are shifting. Europe is not going to be increasing their gas supplies. In fact, they’re going to drop significantly leading up to 2050. Japan, Korea and the rest of them, last year alone some of them had 16% drop in their consumption. Those are the nations that gave us the drive to divert our cargo from Europe when there was not a lot of value to some of the places and make massive gains for Nigeria, which by the way, is a major shareholder in our company. The numbers are out there on what we have been able to bring in for Nigeria. However, in doing that, our focus then has to be to where the markets are. Asia Pacific, you can’t do without China. There’s a lot of plans on what and what they’re going to do. They’re ramping up their electronic vehicle outputs and renewable outputs. However, apart from that, there’s a massive drive as well in their own centers, even for gas still. Then the rest of Asia Pacific is also there. And like we have highlighted already, today the global south, that is Africa and Asia Pacific is sitting around 40% of the global gas energy demand. The expectation is that with energy transition, which is part of what the subject is we’re discussing today, which is ramping up rapidly, and the world recognizes that it must be secure, it must be affordable, but it must be inclusive because you cannot do it without a holistic mix. You need to make sure every part is included. And they, the global north recognizes that Africa is crucial for this. So NLNG continues to drive that space to make sure that we put those volumes out there. We are also then looking at cutting down on our carbon and keeping our costs down. And there’s a retinue of things we’re doing in that space. Like we said, already, we’re renewing our fleet of vessels. We are working towards an ambitious plan 2040. The target is to make sure that we have net zero operations in our activities. And that is seen as very ambitious in the whole industry. And as we decarbonize the space, we recognize regulations are ramping up all over Africa. The world needs gas, not just Nigeria and Africa alone. And we have to take the gas to those people. So, we must make sure we’re competitive in so doing.

Moderator

Nigeria claims to be a leader in gas reserves and global supply. How does this impact ordinary people, the last man in that small village or settlement? How will the talking about financing, talking about infrastructure, talking about export gas, driving technology, innovation, power measure up with him?

Nuhu Yakubu

I will use the auto gas sector to illustrate my points. Today, the auto gas narrative is somewhat trapped in that single story where you hear questions like, ‘where are we on CNG auto gas’? We forget that for proper adoption of auto gas as a strategy, the starting point ought to be with LNG and rightly so. This is how it has been done in those climes that have adopted auto gas as a strategy. In Nigeria today, we have, according to NMDPRA statistics, over 33,000 petrol refueling stations, out of which 20% of them, which is about 6,600 stations are fitted with LPG auto gas facilities as add-ons. In Nigeria today, we have less than 25 CNG mother stations and even less, maybe 20 or thereabout, daughter stations. I would like to be corrected. Now, whereas in the medium-long term, the CNG pertains cheaper fuel for auto gas, but it is not the fastest for adoption. And that’s the reason why in spite of the government promises, we’re not seeing the auto gas buses or CNG buses on the streets. There has to be incentives. We have to incentivize with regulatory waivers. For example, licensing fees or permits to locations that are willing to adopt the add-on – whether CNG add-on or LPG add-on – in order to fast track adoption, conversion and switching to auto gas. Incentives should also be granted for infrastructure development for auto gas filling. For example, auto gas conversion kits and infrastructure are already enjoying a lot of very robust policy fiscal incentives that the government rolled out last year. This include import rebates to encourage gas infrastructure development. But the monetary challenges vis-a-vis foreign exchange volatility is not helpful. Until we find stability in our foreign change regime it is not going to enable us to bring in as much conversion kit or even start production and manufacturing as we intend to.

The various companies producing and suppling gas to the market need to do more to ramp up operations because with a projected overall total supply by all of them of 3.5 million tons, this is still inadequate for the Nigeria domestic market which requires not less than 6.5 million tons of gas for both auto gas and cooking gas. So far so good with the policies and regulations on CNG. It enjoys some good incentives. The challenges in the sector revolves around equity financing that has been further compounded by foreign exchange issues.

Moderator

Regarding LPG, NNPC Limited will only partner with investors that are focused on delivering the product in-country. This is because the company understands and recognizes the importance and effect of growing our in-country capacity. It’s the ordinary person that needs to be taken care of. He needs to get that product.

Panel Session 10: African Content and opportunities

‘Sustainability and the Future of Content Development in Africa’s Energy Sector’

Opening Speech by: Mr. Nicholas Odinuwe, Chairman, Petroleum Technology Association of Nigeria (PETAN) and Chairman of Citadel Group

Today we gather here to discuss the crucial topic of creating a sustainable forward-looking approach to Africa energy sector. We are proud to see the strides that we have made in advancing energy industry on the continent, but we must also recognize the challenges that lie ahead. Sustainability, like the theme said, is not just a buzzword, it is a necessity for the future of Africa and our industry. So, in today’s evolving Africa, it is imperative that we adopt a holistic approach to local content development that takes into consideration the energy availability, security, sustainability, environmental impact, technology, advancement, sector specific dynamics and opportunities for growth in Africa energy sector. We must strive to strike that pragmatic balance between meeting African growing energy needs for our continent and preserving our environment for future generation.  As we continue to develop and expand our mixed energy resources, mark the world mixed energy resources, we must do so in a way that is environmentally responsible and socially inclusive that gives priority to the wellbeing of our local communities. A robust policy framework for African local content is also key to our success. The same way we are working for an integrated African regulatory framework and Appo led African energy bank that is onstream, so we are talking about African standardization as is in Europe, United Kingdom, and the US. These play vital role in sustainable energy in future for Africa. We must nurture and support the next generation energy professionals, ensuring that they have skills knowledge to lead us to the future. This require investment in education and training program as well as creating opportunities for mentorship and career advancement. By embracing innovation and leveraging of technology advancement, we can lock new opportunities for sustainable growth in energy sector. This include investing in mixed renewable energy sources, exploring cleaner technologies and promoting energy efficient practices. Regionally, we must collaborate with stakeholders including governments, industry players, local communities, to ensure that our content development strategies are inclusive and beneficial to all. Let us keep in mind the importance of long-term planning, flexibility, adaptability in shaping the future of Africa energy sector. Together we can pave the way for sustainable forward-looking approach to content development that would drive growth, create jobs, safeguard our environment. We must work together, share knowledge, the best practices and stay committed to our goals. Local content is critical in driving sustainability and future of energy.

Presentation by: Mr. Felix Omatsola Ogbe, Chief Executive, Nigeria Local Content Development and Monitoring Board (NCDMB) represented by Dr. Ama Ikuru, Director Corporate Services NCDMB

 We’re discussing sustainability and content development for African energy sector. Content, for us, means what we do when we develop local services; when we develop our people and they have the human capacity, the skills that they require to support the industry; when we develop our facilities, our materials; when we develop local grown technology to support the industry; when we use and own our equipment; and when we use our finance to support what we do. With content, you achieve two key goals. One is the domiciliation of the proceeds, which will help our economy and solve some of the problems we have presently. And then we domesticate activities locally, which will create employment for people and help us to move our economy forward. The case for local content is very well made. Africa has the reserve to sustain local content for a considerable amount of time into the future. The story about renewables and the energy transition is a good story, but I think we still have enough of the fossil fuel to support any investment in the development of capacity and local content in Africa. Let me share with you some of the successes we’ve achieved in local content. Today, our level of local content in Nigeria stands at 54%. We can build the infrastructure required for oil and gas development going forward. We have the FPSO integration yard, which is the best in Africa and one of the largest in the world. We have developed pipe mills, pipe yards. We are supporting the industrialization of Nigeria. We have started the construction of industrial parks. Our intention is to do about eight of them. Two of them are almost at 90% completion. And once we start that we start manufacturing what we need and start using what we need for industry in Nigeria. We pay a lot of attention to training people. Even when they were owned by others. Now Nigerians own those fields. The Nigerian Content Intervention Fund was set up to support our contractors; and this has become one of the most successful funds we’ve had in the industry. Over the past few years, we have tracked the business in the marine and blue economy sector and came to a data-based conclusion that 60% of the vessels being used in the sector are owned by Nigerians. This is positive because the sector is valued at about $7 billion and Nigerians did 60% of that business. This is what local content is about.

We partner with oil and gas companies to build capacity building facilities such as vocational schools to support the industry. By so doing, we have achieved significant mileage in reducing the number of experts that come into the country. Actually, we have so far replaced about 1,376 of them with Nigerians who are proving their capacity to do the job. Very recently, we worked with the industry on reducing contract circle time. We just signed an SLA with NNPC and industry stakeholders on that. This has the potential of attracting investors into the country. NCDMB is voted as the number one agency in Nigeria in terms of ease of doing business. This it has sustained for the second year running, and will continue to do more to remain who we are. We have invested in four refineries. Some of the refineries are producing today. We’ve also gone into gas for gas penetration where we’re partners with Nido Gas and we have a number of other gas companies we have invested in. We did not stop there but proceeded to train them to have the capacity to do services in the industry. We selected about a hundred companies with the intention of moving their performance from 500 million Naira per year. Our effort and intervention have enabled some of those companies to be doing above 5 billion Naira yearly.

The question now is, when you’ve done so much and have built capacity, how do you sustain it? We can use the same template and model to develop capacity in Africa, but if we cannot sustain the capacity, it will go to waste. I believe that if we focus on the following, it will help us to sustain the capacity build over the period. The first is research and documentation. The second point has to do with business opportunities. We’ll not get opportunities on a platter. Our cost has to be competitive. We also have to work on our quality. The oil industry will not tolerate poor quality. Local content must be at par with world standard and quality for it to be accepted. We have to standardize. The worst you will do is to mobilize equipment from Nigeria to Congo and they tell you that it does not meet the specification or standard. We need a base African standard that will help us move things across boundaries. Luckily, we have the African continental free trade legal framework to help us move across boundaries. But individual countries also need to have a legal framework to support what we do and have to support that policy such that when we develop capacity, people have invested, they’ll allow them to actually get to the point of recouping their investment before you go completely local. Those that actually go international should also think about partnerships with those companies in order to be successful. If we work together Africa will become developed and Nigeria will win.

Presentation by: Dr. Umar Farouk Ibrahim, APPO Secretary General represented by Mr. Tami George, Head of Energy Studies, APPO

As we gather here today for the African Local Content Investment Forum, it is with great anticipation and commitment to the development of our continent that we convey. This forum stands as a beacon of hope, a platform where ideas converge and strategies are forged to empower African local economies under the auspices of the African Petroleum Producers Organization (APPO). The significance of this event resonates deeply. It underscores our collective resolve to harness the vast potential within our borders, nurture indigenous talents and foster sustainable development across the energy sector. ALCIF represents a pivotal moment in our journey towards self-reliance and prosperity. It is a testament of our unwavering belief in transformative power of local content, policies and investments. As we engage in this dialogue, exchange insights and explore opportunities, let us remain steadfast in our commitment to transparency and collaboration in the phase of global challenges and shifting paradigms. Africans stands poised to chart its own cause, redefine its narratives, and emerge as a beacon of innovation and progress. Together, let us take this moment to shape a future where African nations thrive, citizens have the opportunity to prosper, and where our collective aspirations know no bound. The Secretary General of APPO is honored to stand alongside you today, inspired by your passion, dedication and unwavering belief in African boundless potentials. Let us embark on this journey together mindful of the challenges that lies ahead but fortified by the strength of our convictions and the power of our collective resolve.

Panelists:

1. General Secretary, PETAN and MD/CEO Global Pipeline and Process Services LTD, Mr. Obi Uzu
2. Managing Director, Tenaris and Chairperson, Petroleum Contractors Trade Section, Mrs. Rosario Osobase
3. Chief Technical Officer, New Cross EP Ltd and President, Nigeria Association of Petroleum Explorationists, Mr. Abiodun Ogunjobi
4. Managing Director/CEO, Coleman Cables and Wires, Mr. George Onafowokan
5. Managing Director, Matrix Energy Exploration and Production Company, Dr. Bukola Olusola
6. Chief Executive Officer, Heritage Energy Limited, Mr. Ado Oseragbaje represented by the General Manager Operations Integrity, Mr. Nelson Wilbert
7. Managing Director, Platform Petroleum Limited, Mr. John Anim

Moderator: Ms. Iroghama Ogbeifun, Managing Director, Starz Investment Company Limited

Moderator

Talking about environmental stewardship and driving sustainability; how are you as an indigenous player operating in a responsible manner in terms of the environment as well as fostering the right relationships with the community in order to mitigate operational risk that is one of the major challenges for the industry?

Abiodun Ogunjobi

One of the things that Nigerian Independents has done rightly is integrating the community as a stakeholder in the business. We have successfully established symbiotic relationship with the community by making them a stakeholder. This way they know that it is in their best interest if operation is going uninterrupted because their interest is enshrined in the business. My company is operating an asset that was divested from the IOC for some years now, and I tell you confidently that we have never had a day of shutdown that is due to community disturbances. So, if you have any shutdown at all, it’ll be maybe operational, technical issue, but has nothing to do with the community. Making the community a stakeholder in the business and establishing a robust community relationship is key to a successful operation. They also benefit through local content infusion. They are empowered to be able to offer technical services through skills development programs and as service providers in other areas.

Moderator 

I will be asking you a similar question because I know that you are dealing with communities as well as sustainability issues. Give us your experience on what it has been like and what the future potentially looks like?

Bukola Olusola

I want to say that we are now in an era where the host communities are a key stakeholder in oil and gas operations. And they’re well enlightened about our operations. Just by citing an equipment a community person can tell you the operations you are about to commence. It is therefore important for us to have pre-engagement before every activity that will commence in the field. And also, we sustain that communication with the community to ensure that at every stage of our operations, we are in a mutually beneficial relationship. Also, very critical is for us to also look inwards at our operations and how we operate our assets. Gone are those days where you just develop an asset the way you like it. Now, how you develop an asset is very important. It’s not just getting results, but how you get the results. And so, for us at Matrix Energy, we’re very intentional about how we develop our assets because if we develop our asset responsibly, we minimize our carbon footprints in the environment. That way, we minimize frequent engagement with the community. What I mean by that is we make sure that our HSE policies are according to industry-based practice, and our employees are empowered to comply with those policies. And even when we have communities and contractors working on our allocations, we hold them responsible to the same standards that we hold our employees responsible. So, for our development strategy, we make sure we work with a zero-gas flare strategy, even from the beginning of our operations. We don’t want to flare. We make sure our water is properly treated and disposed responsibly because if you minimize the impact of our operations in our communities, then they see us as a responsible player. And one more thing that we do very well at Matrix is the fact that we treat our host communities as a member of our family. We always tell them, don’t treat us like strangers in your land, but treat us as a part of your family. And that always go a long way in encouraging them to support our operations because for every project we do, we always sit down and ask ourselves, what part of our project can we allocate to the communities? Because if they benefit from our project, then we can have a sustainable operation in our communities where our employees are safe, our assets are safe, and our stakeholders can maximally benefit from our operations.

Moderator

With your experience and all that you know, how can we ensure that local content development in Nigeria’s or Africa’s energy sector aligns with global sustainability goals and strategy?

Rosario Osobase

I believe that sustainability is about securing the need for the now without compromising the future. Personally, I always preach that sustainability wraps around three themes. The first is that it has to be people impactful. So, the people have to benefit from whatever it is that we are trying to develop. The second is that it has to be planet impactful, which means that whatever we are doing, our operations, our products, our services are done in such a responsible manner that we leave the environment and the climate better than the way we met it and for the future generation as well. And the third is profit. Profit because every sustainable business model hinge on the back of profit for the economy, and for the investors that floated these businesses. I call it the three Ps of sustainability. With this in mind, my opinion is that NCDMB is on the right track to delivering sustainability through local content development. Nigeria has been able to establish laws that enable local content. Since 2010 when the law was enacted, there’s been significant progress. I am part of that progress and that is why I am seated here as the first female managing director of Tenaris in Nigeria. We will do well to align with globally sustainable best practices in developing content for Africa. This will enable the institutionalization of building true capacity and not tokenization as we currently see at play, sometimes in the oil and gas industry. What that means really is that we need to encourage homegrown solutions, African solutions. We also need to encourage established players who are more driven towards value creation and retention rather than being mere portfolio companies who are only in the benefit of putting a markup and ending up seeding the work out of Africa to Chinese destinations and the rest of the world. NCDMB must drive the setting of very ambitious targets for us to engage in advancing global best practices in content development. And these ambitious targets have to be driven on the backdrop of strong monitoring for compliance as well as monitoring progress of these targets.

Tenaris is a leading global pipe manufacturer of steel pipes and everything related to steel products. We have a hundred million dollars investment in pipe mill based in Onne. What that means to me is that we need to continue to increment capacity, but for us to increment capacity, we need to be seen to be sustainable. So, it’s important that from time to time we are monitoring for compliance of the local capacities that already exist around Nigeria and Africa, and also ensuring that we are making the incremental progress. The third point is that the lack of deliberate research and development policy and activity is the bane of industrialization. To have true sustainability in African content, we need to be serious about investing and increasing our spending in research and development.

Moderator

What would you say is the role of innovation and technology in how we could position as a service company in the industry for sustainability as we are growing local capacity, both here and other parts of Africa?

Obi Uzu

PETAN, involves more than 100 Nigerian companies rendering services in oil and gas. Let us first look at three very important Cs on content before I focus on your question. The first C is competency, which represents knowledge, training, and research and development. The second C is capacity, which has to do with resources needed to deploy in order to be able to fulfill whatever commitment made. The last C is collaboration, which will enable the operator to close the efficiency gap. Collaboration helps to de-risk in such areas where you do not have capacity. Collaboration enables you to scale up to handle bigger projects than what your company can deliver on its own. As regards to the question on the role of innovation and technology, this is the perspective I want to throw out there.

It is important to have a very sound knowledge of the space you are playing in – whether it is drilling, servicing of pipeline, etc. You must understand the operational requirement, technology and the ecosystem end-to-end. Understanding the people in the global ecosystem will enable you attract collaboration from different relevant countries. A robust research and development strategy and infrastructure will enable you to bridge the gap and meet your client’s needs. Equipment specifications procured from the open market may not be able to meet the client’s needs, however, with research and development apparatus the equipment can be refined and reconfigured to achieve the objectives as stipulated by the client. Innovation and a robust knowledge base will help you to modify and reset to fit.  I emphasize competency development program and for that reason we sponsor Nigerians to schools like Cambridge and Harvard to improve on their competencies appropriate for this oil and gas industry space. We realized that if we have this competency in-country, it is to our advantage than bringing somebody from France or from India. So far, we have sent 27 Nigerians for competency development. These trainees will become experts, remain in-country and be loyal to our own culture and to our own commitment. So that’s what we’re doing to have organically grown expertise within this space in Nigeria.

Moderator

Using your local content experience and penetration of international markets, how can manufacturing companies such as yourself adopt a sustainable approach towards the growth of local content in the energy sector, but still maintaining that standardization that we’ve heard a lot of when we think about Nigerian products?

George Onafowokan

The biggest issue with creating sustainable development within the content space and how to get it to other areas of Africa, is the home-grown fear that every Nigerian product is sub-standard and so lacks parity with foreign products.  The question then is, how did we develop into a business where I could proudly say every Nigerian sitting here would rather buy made in Nigeria cables and wires than go for foreign made ones? Ours is the only industry to have achieved such respect in Nigeria. And that is something to be proud of. We did something right and that something is called standardization – not bending the rules on standards and quality. We have sustained this quality for over 50 years because we choose to maintain our product status. It just shows that if we’re committed to a long-term goal, long-term sustainability, training your staff and developing their skillset, we can achieve local content that is globally accepted. Today, our workforce is made up of 800 workers, with only 1% being expatriate. We now export our products to other countries. In some of these countries, the quality of our products is accepted, but the branding is suspect. So, they tell us to take off the made in Nigeria sign in order to remove what they see as stigma. One client even proposed our putting on a made in Turkey sign with Coleman on it. This we bluntly refused. We eventually actually went into such countries and are selling in spite of our made in Nigeria sign. This is what quality standard can do for you. In our own industry now, the world has actually evolved to be IEC compliant. We all started with our individual country standard – British standards, Nigerian standards, South African standards, etc. Now the one standard being used more of, is the IEC standards for all the cables around the world. So, most countries have adopted IEC standard and that’s made it sustainable. And I think that’s the best thing that’s happened to us in the industry in terms of the cable. Whether the cable is for use in the oil and gas industry, in power, in energy, solar systems being deployed with certain cables, everybody’s now using certain IEC standards. The important part of it is that the standardization makes it sustainable. It doesn’t matter which part of Africa you go to, as long as they’re all operating on the same IEC standard, the entry point becomes you are all at the same equal level and it’s now a case of how efficient or how better you are doing what you do. Finally, anything sustainable needs staying power. This staying power is difficult to achieve in Africa in the long run because what you need to be sustainable cost money and are CapEx related. Africa as a whole must see content as Africa, not as Nigeria anymore, not as Uganda, not as Angola. It means we need to have sustainability built on developing collaboration between all the countries. Irrespective of where the local content is coming from, as long as it’s Africa, it should be able to interlink and there should be linkages amongst African countries. Now at the end, what you then have is capacity built from those mergers, those linkages, those collaboration, and it’ll make us big enough to actually take on projects that are really not the figures we see in our world.

Moderator

He is saying African countries should transverse their individual borders, build capacity and do not compromise. We need to change that narrative out of Nigeria, out of Africa, that made in Nigeria, made in Africa is substandard. And we only achieve that as a collective if we choose to stand in the way of integrity and we choose not to compromise. That’s what builds that sustainability.

What are the key enablers that help us to really sustain the development of local content in our sector and build businesses sustainably and responsibly from a local content perspective?

John Anim

Platform Petroleum Limited is a product of the local content initiative. It’s a company that has been in existence for over 20 years and formed by individuals that worked in the IOCs. They understood how the business is run, understood the challenges, and understood what it takes for you to develop the asset in your environment in a sustainable manner. A sustainable manner in the sense that if you don’t have sense of ownership and mess up in your operating environment, you are going to bear the consequences of that mess. You must have to operate responsibly as a company. So, these are individuals that had those initiatives and they understood the issues, the challenges they faced when working with those IOC companies. And they came up with the idea of, first of all knowing that the company, the assets has key stakeholders like the two other speakers spoke about the community. Communities has been identified as one of the key stakeholders for the sustainable operation of your company. We identified that and knew that there is no way we are going to work without the community. So first of all, when the asset was granted, the community became a part of the business. We identified with them and engaged them in our operation. First of all, we formed a collaboration between the different host communities, and extended into the impacted communities. And we were able to engage employees of Platform mainly from the communities. So, we had about 60% of the employees of Platform coming from the communities. So, whatever we were doing, we were doing it in such a way that it’ll not impact negatively on the environment.

Moderator  

How do we, as the private sector, as people who are invested in the industry and would like to expand and grow, build content in a sustainable way? What needs to be in place that will enable us say that in 10 years and 50 years, this is what our sector would look like?

Nelson Wilbert

Someone, and I quote very loosely, said, sustainability is a marathon and not a sprint. One of the challenges we’ve seen in Nigeria is in the implementation of policies. We have some really fantastic policies. I know we play sort of ping pong sometimes with NCDMB, but what they’ve put on ground for us is actually world class. The question is how are we implementing it? It’s not about playing eye service with NCDMB and showing them your scorecard when they come to inspect and showing off the one or two local persons on the pay roll.  Everything that we do has to be outcome driven. We know that many of these local people are starting from scratch with near zero capacity or capability or even competence in some cases. This is where you essentially put the training wheels in action. It’s a symbiotic relationship where you say, if I am going to help develop, even if it is this one company to raise them up, show them the right standards they should operate to, whether they’re community based or they’re just another local or indigenous player, it is important that we walk as partners. Now, this is just the direct relationships, but behind that, there are lots of things that the policies and of course the guidelines that have come from the Act has actually helped put in place. When we stop certain services from flooding our market, that gap is automatically filled by the real entrepreneurs. And we have so many fantastic stories today. There are so many young players that are successful. But we have to be deliberate with every single step that we’re taking. And it’s not just about the company or the operator in this particular case, it’s actually the other players. And then you have the enabling fields being put by the regulators. So, it’s essentially an ecosystem that has decided we want to build competence and not cut corners. We have cases where local players are given opportunities and what they want to do is get substandard products. When you accept those substandard products, you actually contribute to the problem. We have to maintain that level of quality and help them build the competence to be able to deliver that.

I’ll give an example from Heritage Energy.  Heritage Energy is the operator of OML 30 and also, the trans-Forcados gas pipeline. Like most indigenous players or independent players, we have aged assets. That is not the sort of environment you want to bring someone that is going to cut corners. We’ve been blessed with the age of the oil and gas industry in Nigeria and we have competent people that are actually managing world class portfolios across the world. And we have several of them here in Nigeria. So why can’t we deliver? It boils down to the leadership and commitment from the top of every organization. The regulator, the operator, the local player must choose to say, this is what we want to do. And it should not just be limited to one job or for this quick profit, it should be for the long run. I think with that we’ll be able to build competence. The other issue, which is always on the lips of NCDMB is research and development, but we seem to be immune to it. The truth is that we really need research and development. I’m blessed to sit on the technical advisory board of the NCDMB research and development fund and we’ve seen the quality that have come out as a result of research and development activities. Thinking long term also means going back to our secondary school and university curriculum. The quality of proposals to the technical advisory board from even university professors is so substandard that it is actually shameful. So very few I would say, maybe at best 20% actually comes without you having to essentially show them a few things to step up. So, we need to think that long term, go back to our curriculum and teach our people how to be innovative. We don’t have a choice. We’ll manage what we have today, but we also need to start fixing the pipeline that is coming behind.

Moderator

In light of what we are talking here in terms of driving local content, how can we balance the necessity for attracting foreign direct investments while still making the case for developing local content in a sustainable manner.

Abiodun Ogunjobi

Before answering your question directly, I will like to contribute to the research and development issue. There doesn’t seem to be a roadmap for research and development. We have to be deliberate and intentional about increasing collaboration between the industry and the academia because there can be no sustainable goal without the academia. When you talk about some of the divestment that we have seen in the last couple of years, majority of the people that took over those assets were people that have been trained by those people that were diverting; many of them are ex-Shell. Along with these divestments goes most of the research and development data, information, capacity, digital technology decision enhancing tools that the IOCs had stored up over many decades at the headquarter offices located outside Nigeria. Where we need to develop our own capacity is at our universities, but they are not there and we are not taking a deliberate attempt to discuss about it. I’ll give you an example. My Association in partnership with a UK based software company wanted to give all the universities in Nigeria a petrol physics software. We could identify only 17 universities with standard workstation. So, when you’re talking about sustainable goal who are those people mandated or equipped to provide that capacity in the next 10 years? The roadmap is not there; we’ve only been giving research and development lip service.

Talking about investment, we need to find a right balance between local content and attracting foreign investment for sustainable goal in Africa. However, investment will only come to the right environment where it’s welcomed. We need to have the right investment policy. We need to have a clear and transparent regulatory framework. We need to make sure that the investment climate is tolerable for people to come in and invest their money. Again, the dearth of infrastructure in Nigeria is not making some of our projects attractive enough. Investors will only come when they can see the roadmap to the gestation of their money. It is difficult to invest when there are no clear access to get your product to the market. Nigeria is a high-risk climate for investment to be done successfully. Let us take the bold step of merging regulations where there are duplications. To carry out a simple EIA, for example, you will have to go through eight regulators, starting from the State Government to NOSRA to the Federal Ministry of Work, State Ministry of Environment, etc. All these for just EIA. Such duplications impact the cost of doing business. Why should we have multiplicity of regulation for a simple thing as just conducting EIA? So, you see that money or investment will only go to where it’s welcome.

Moderator

We cannot speak about sustainability without talking about the place for gender inclusivity, gender equality, and some level of significant diversity in the equation. How do we carry the gender action and implementation along in this journey of sustainability and building local content?

Bukola Olusola

it is often said that if you want just any idea, just bring together people of similar background and life experiences and you get just any idea. But if you want a great idea, an innovative product, then you need to bring together people from different backgrounds and life experiences. At Matrix we are intentional about how we recruit our staff. We make sure that we retain diversity in our staff strength because we want that uniqueness, that diversity, that contribution from individuals from different backgrounds bringing in their own perspectives to the game. And that’s what makes us very unique. So, I would say that with respect to our recruitment strategy, we’re intentional about balancing it. Having a reasonable number of female staffs taking decisions across our assets and that’s something you can verify your own. So that diversity is important. If I want to tie that back to the questions or the discussions around research and development we’re talking about, why those proposals from the academia are substandard most of the time is because the professors have not had opportunities to collaborate with other professors in other developed nations. So, we need to start asking ourselves, can we also sponsor some of our professors to go for either an internship or the sabbatical leave in other countries, in other institutions outside of Africa? Then they can bring those quality, those knowledge into Nigeria. This diversity should go beyond Nigeria citizens working in Nigeria. The African industry must promote diversity of nationals if it aims to gain from the skills and experiences that abound in the continent for its African content development. Otherwise, we can’t achieve that sustainability because what brings about sustainability is a vision. In addition, sustainability is kept alive by a system and not by people so that when a set of people leave the stage, those coming in to replace them will inherit the system and be able to carry on with that vision. It is also important that, irrespective of the gender, the staff of an organization understand why we are talking about sustainability. It is not just for us today, but for the generations to come to be able to benefit from our work. It is important as well that we also take note of this, that whatever we do today, it’s going to change tomorrow. This is because what changes sector dynamics is not only market forces, but our mindset – how we think and how we relate with products. Therefore, it is important that we maintain that balance with respect to gender, to tribe, to religion. Diversity ought to exist in any team that we have. Then we can talk about taking over the leadership of the African energy sector as Africans, and also still keeping the relationship with the Americans, with the Asians and the Arabs, who at some point were helpful in developing the industry that you and I are operating today.

Obi Uzu

One basic thing I want to leave with the audience is that good project management starts from understanding the expectations from the client. That’s the key. You need to take your time to understand what the client wants, then you can now assemble all the resources you will need to surpass that expectation of you. To meet the client’s expectation is good enough, but to surpass it is the secret to getting more patronage.  That’s how we have been surviving.

Rosario Osobase

Let me point out some things around gender diversity. The first point is that sustainability is relies on people, which includes men and women and not men alone. So, if you are trying to build sustainably, then you have to inspire inclusion. And to inspire inclusion, it has to be a business narrative as well as an economic narrative; not a recruiting narrative, not a female led advocacy narrative alone. The leaders of organizations need to start leading inclusivity. The second point is on research and development. Saudi Arabia has three Saudi based research and development centers. It has nine international research and development centers including a university in the Netherlands, another university in Frances, and a couple of other universities. With these Saudi Arabia is partnering all around the world. to book us point, right? If we are serious about research and development, then it’s important that we start thinking about how much to spend in proportion to our gross domestic products. These countries that do excellently in research and development like the US, China, Japan, spend about 3% to 7% of their GDP. Nigeria’s spending is less than 1%.

Abiodun Ogunjobi

For Africans to develop Africa, we need to leverage on what the local content has done very well, which is having a clear and transparent policy that defines the timeline, the target goals, and the implementation period. Now the implementation period is important to allow room for capacity and skill development. Let us ensure that we are deliberate and intentional about increasing collaboration between the industry and the academia. Our universities need to be well equipped to build the capacity that will develop the Africa of our dream.

George Onafowokan

We have to be deliberate when it comes to gender in the workplace. In most cable factories in Nigeria, you can hardly find above 2% of the workforce that are female. This is probably because the sector is labour intensive. However, with technology it will become possible to increase that quota like we have done at Coleman cable and Wire. Technology automation is taking out the workload or the excess labour from the workers. Now we’ve been able to achieve impressive statistics over the last 10 years. We’ve gone from a 2% to 35% women working in a cable factory. I cannot find one in Africa that is doing 35%. And we are pushing the limits on that. All because we are basically technology driven, which has taken off the labour. With automation we will be able to ensure the sustainability of the women workforce.

Bukola Olusola

In the past, operators have managed assets leveraging on their knowledge and experience, but nowadays we’re in that era where data is king. So, I want to encourage operators that in addition to your knowledge and experience, add data to your decision-making process. That way you can deliver superior performance.

Nelson Wilbert

Environmental sustainability is one key. Regarding the gender action, we need to go beyond just the token of recruitment numbers and actually go through the full life cycle. We must note those women that are dropping out because the organizations they’re working in, or indeed the society, doesn’t let them progress, even to management level. This also needs to be addressed. The same goes for the physically challenged persons. We have to be deliberate to include these persons.

John Anim

Platform Petroleum as a company is focused on inclusiveness, including women in our operation in every aspect of our business. I was in a conference last year when we were running the graduate trainee program. And I promised that by the end of the program, which is the recruitment process, we will achieve 40% of the number to be made up of women. Surprisingly, we recorded 60% out of 13 successful graduate trainees: seven women as against six men. What that tells me is that we have both men and women in Nigeria who are yearning to work. Within the past few years with what the NCDMB has been doing, I see so many local companies that are service providers all over Nigeria. They’ve grown in number and in competence. What is remaining is to take it to the next level. And that level is consolidation so that they will have the capacity to execute projects for the operators who engage in multimillion dollars projects. When these service companies consolidate to that capacity, to that ability to deliver, they’ll able to execute those projects that the multinationals are currently handling. Right now, most local companies are only serving as middlemen for the multinationals. Nigeria and Africa should focus on having that technology so that if the world is transiting to other sources of energy, we should be able to use that technology that we have in-house to continue to harness our resources.

Day Five: Friday, 1^st March, 2024

Panel Session11: Power and Energy Access

‘Electricity for All: Bridging the Energy Access Gap’

Opening Speech by Mrs. Olu Verheijen, Special Adviser on Energy to the President, Federal Republic of Nigeria

This event gives us an opportunity to explore and co-creates innovative and practical solutions to eliminate energy poverty within our continent. The quest to bridge this gap is crucial and cannot be overstated. It is indeed important for fostering economic prosperity and ensuring social fairness. Bringing it back home specifically to Nigeria, despite all the interventions from the government on subsidy, over 100 million Nigerians still do not have access to consistent and affordable electricity. This lack of access directly impacts the ability to achieve meaningful economic growth as a lack of reliable electricity limits productivity and restrict economic expansion. The parallel between the number of people living in poverty and those without access to electricity in Nigeria is not accidental. Clearly, the link between electricity consumption and economic development is well established across different countries in different income strata. In order to drive this point home, I will like us to look briefly as a couple of slides. The first one shows us the energy consumption per capita. We see South Africa leading the pack with about 23,392-kilowatt hour annually, which comes to about 1,949-kilowatt hour monthly. Closely followed by Egypt with 9,639-kilowatt hour annually. This comes to round about 800-kilowatt hour per month. Morocco has 7,237-kilowatt hour annually, comes to about 600-kilowatt hour monthly. Nigeria, last and certainly the least 2,548-kilowatt hour annually, which is about 212-kilowatt hour per month. If we look at the figures on the right, the OECD tells us that what is allowable annually is about 5,211 kilowatts. This translates to about 3000-kilowatt monthly. The United States of America does 78,754-kilowatt hour annually and 6,563 kilowatt-monthly. I thought this was useful to actually draw the nexus between the impact of electricity on economic growth and industrialization. I want us to look at the table. We put together household appliances and the cost per month and the kilowatt hour. If we look at the fridge, it consumes about 205 kilowatts a month. That is about 35,260 naira. So, if an individual is able to only consume212 kilowatts per month from the grid, he can only use one household appliance with a minimum wage of less than $3. He is spending most of his minimum wage on only one household appliance. It is then interesting to note that other developed countries continue to grow in terms of income pay capita, productivity and job creation

The economic impact of energy poverty on economic development cannot be overstated. Clearly, businesses that operate in environments like Nigeria, continue to struggle with high operational costs and lower productivity, making them less competitive, both globally and locally. This in turn clearly affects job creation, and limits income growth opportunities. And for households. The lack of access to clean and reliable energy resources has profound implications for education and health, which remain important determinants of economic mobility. We find and we see pictures of students struggling to read in the dark; hospitals operating on generators stretched to the limits and unable to perform at full capacity. How then can we rethink energy access? To effectively tackle the issue of energy access in Nigeria and throughout Africa, we must broaden our perspective on what constitutes electricity access. Indeed, the conventional benchmark of being able to light a household bulb must change because it falls short of encapsulating the full impact and necessity of energy for Africa’s economic growth. And so, when PHCN takes light and bring back the light, and most people say, “light is back”, we must move beyond that. We must understand that while achieving household electrification is a vital step that enhances living standard, it merely scratches the surface of the energy sector’s potential to transform society. Clearly real energy access goes beyond household lighting, because it seeks to enable a diverse array of activities that are fundamental to modern existence and economic progress. And I say not just fundamental, but they are fundamental to the human dignity of an individual. And so, we must look at powering businesses, machinery, computers, industrial equipment essential for today’s economics. The goal is to provide reliable, affordable and clean energy at a scale and pace that fosters economic expansion, job creation and increased incomes across Nigeria and the wider continent. For Africa to unlock its full economic capabilities, energy solutions must be scalable and sustainable. It must support both urban and rural economies. It is clear that the urban society cannot grow without the rural economy. And this vision must go beyond home lighting to energizing industries. It demands a sturdy, reliable and scalable grid infrastructure that can supply the vast amounts of clean cost-effective energy needed to fuel industrial advancement, spur employment and encourage innovation. Clearly, redefining energy access involves adopting a comprehensive strategy that prioritizes a complete energy ecosystem powering every aspect of economic activity beyond household needs. What then is the path to prosperity? How can we grow productive use of electricity and job creation? Nigerian macro-economic difficulties and unreliable power supply have severely impacted the productivity of the commercial and industrial sectors. Over the years, this has resulted in low productive use of electricity. This situation has led to a scenario where a disproportionate amount of the available power is consumed by the residential sector, which accounts for more than 70% of final electricity consumption. Furthermore, over 70% of Nigerians live below the middle-income international line of poverty, which is set at about $3.20 a day, rendering them unable to afford electricity access. The implication of this is a largely poor residential customer base, resulting in limited revenues for utilities. This in turn, exacerbates the issue of reliability and affordability, as utilities find themselves unable to reinvest in expanding and enhancing their electricity infrastructure. To address these challenges, and unlock the economic potential of Nigeria’s energy sector, it is crucial to shift our focus towards growing the productive use of electricity, particularly in our commercial and industrial sectors. This sectors clearly have a higher capacity to pay cost reflective tariffs, and are crucial for powering productivity and competitiveness. By enhancing access to reliable electricity for this sector, we can stimulate job creation and increase economic and income growth. Successful businesses in these sectors are clearly likely to pay higher jobs, improving the purchasing power and credit worthiness of the population. Moreover, in areas where off grid technology presents a competitive alternative to central grid supply, particularly in rural areas, with no central grid infrastructure, and low levels of electricity consumption, our policies to ensure that technologies are innovative, forward thinking and mindful of the demography in the Nigerian society. This strategic focus not only aims to lift people out of poverty, but also strengthen the financial viability of the energy sector. What is the Nigerian government under Mr. President doing at the moment? Under the leadership of President Bola Ahmed Tinubu, we are currently addressing foundation problems that when resolved will help in increasing energy access to Nigeria. I will discuss two of them briefly. A multi-agency team involving the Ministry of Finance, Ministry of Budget and Planning, Ministry of power, and the Office of the Special Adviser on Energy is actively pursuing reforms and initiatives aimed at expanding access to electricity and enhancing productive use. A key focus of this effort is addressing the outstanding debts to all the various sectors of the electricity value chain. And clearly this is a move designed to encourage the consistent and continued availability of power. This strategy is expected to both serve the financial health of the GENCOs and lead to an increase in electricity production across the nation. Secondly, my office plays a pivotal role in providing secretarial and coordination support for the presidential metering initiative, which is a critical project launched by the federal government of Nigeria to tackle financial inefficiencies within the power sector. The PMI is set to revolutionize the electricity sector by deploying only smart meters, developing a locally designed metering communication system, establishing a metered data management system tailored to address key social challenges related to metering. The initiative aims to improve the financial viability and commercial operations of the DISCOs by fostering cost efficiency, improving revenue collection and minimizing losses. One of the ambitious goals of the presidential metering initiative is to reduce the aggregate technical commercial and collection losses, which are around about 47% to globally accepted standards of between 12% to 15%. I will conclude by urging everyone to embrace the collective vision that transcends the basic goal of household electrification.

To recognize and leverage the comprehensive transformative potential of universal energy access, our focus must broaden. Our focus must change, to include energy’s role in powering productive activities that are the backbone of economic sustainability and job creation. More than just eliminating our homes, our goal should be to energize industries, empower businesses and catalyze innovation. This innovation will in turn create employment opportunities, with a ripple effect, increasing the number of paying customers and enhancing the financial sustainability of our energy sector. Furthermore, let us commit to converting our discussions into tangible, concrete strategies that can drive meaningful change. By doing so, we lay the groundwork for a future where Nigeria and indeed all of Africa can enjoy the fruits of sustainable development, environmental stewardship and economic prosperity. It is through our unified efforts, collective efforts as individuals, communities that we can bridge the formidable energy gap, unlocking the boundless economic potential of our continent. I urge us to move forward with determination and creativity, fostering partnerships and innovations that will light up Africa in ways that we have only begun to imagine. Together, let us power our way to a brighter, more resilient future for every African citizen, ensuring that no one is left behind in our journey towards universal energy access.

Ministerial Address by: Chief Adebayo Adelabu, Honourable Minister for Power, Nigeria

Access to electricity is undeniably a fundamental requirement for social economic development. In recent years, significant progress has been made globally in improving access to electricity. However, a substantial portion of the world population still face challenges in obtaining reliable and affordable electricity. In Nigeria, it is estimated that 92 million people are still suffering from energy poverty, which is over 40% of our estimated population. It is our collective responsibility to address this issue as it has far reaching implications for poverty alleviation, healthcare, education, and overall improvement in the quality of life, including the reduction in unemployment trait in our society. The importance of adequate, reliable, functional, and affordable electricity can never be over-emphasized. Without it, beyond exaggeration, there is virtually anything that will work. All our potentials in human resources, our potentials in natural mineral resources can only be realized when they’re fully energized. So, it is so key to achieve significant economic growth and the desired industrial development. So, it is not coincidence that most of the world acclaimed developed nations focused on provision of adequate electricity for their society before they can achieve the kind of fit which they achieved in industrial developments.

A country like South Korea, which is just about 49 million people, generates 130,000 megawatts of power. So, which is why it is not surprising that the little firms of the sixties have grown to become industrial giants today – such as Daewoo, Hyundai, LG. They compete globally with other world giants in the industry. This power and energy session serve as a crucial platform for stakeholders to come together and collaboratively work towards the common goal of ensuring universal access to electricity. The outcomes of our discussions here are expected to not only inform, but also inspire future initiatives fostering sustainable development and improving the quality of life for millions around the world. As we delve into the focus areas of this session, let us first gain an overview of the current global scenario regarding energy access. Understanding the challenges faced by different regions and communities is crucial in developing our targeted solutions. We must also identify key barriers including financial, infrastructural and policy related challenges and discuss how technology and innovation can play a pivotal role in overcoming these obstacles. Moreover, it is essential to highlight successful initiatives that have significantly improved energy access and extract lessons learned from these experiences.

By showcasing replicable models for wider implementation, we can inspire many more nations and communities to embark on similar transformative journeys. Renewable energy sources are a cornerstone in expanding access to electricity sustainability. During our discussions, let us also explore the role of renewable energy and discuss how off grid and decentralized energy systems can contribute to reaching remote areas where traditional grid systems may not be feasible. This is becoming more and more important in our society where we have been having incessant disturbances on the grid and also a number of remote communities are not so attractive to the existing distribution companies. So, we believe that to reach these unserved and underserved communities, our focus must also be on renewable energy and distributed power model. In identifying opportunities for public and private sector investments in the energies access sector, we must also discuss innovative financing models and partnerships. Collaboration between governments, businesses and international organizations is key to unlocking the full potential of our efforts. This sector must be attractive for equity investments and debt capital. Our model must be bankable to attract investors and lenders.

Transforming the power sector, especially in our clime, requires a lot of investments that will come from equity investments, local and foreign investors. They must also be able to attract lenders in terms of debt capital. The only way this will happen is when the investors and the lenders can have a line of sight that whatever money they inject to the sector will surely come back. In a situation where it is not attractive it is actually a tall order to attract such fund from investors and lenders. Let us work together to bridge the energy access gap ensuring that electricity becomes a reality for all irrespective of our geographical location or social economic status. We have resolved to tackle the issues in the sector headlong and address the root cause of the problems in the sector without just cutting the branches of the problems or providing a facade solution like we have had in the past. It is quite unfortunate that Nigeria is at the low ebb of the hierarchy of nations in terms of our consumption, electricity provisional supply to households, to businesses, to industries. This has not only hindered our economic growth and industrial development, it has also denied our people access to good life, which is why this administration under the captain of the ship, President Bola Ahmed Tinubu, GCFR is determined to go to the root cause of these problems and solve it and resolve it once and for all.

However, power problems of 60 years cannot be resolved within six months because power investments are not really short-term investments. The incubation period is relatively longer than any other sector. To build a gas power plant today, the fastest will be 18 months to 24 months to complete (from manufacturing the turbines, transporting it down here, installing it, and getting gas). It is the same thing with hydro power plants, which could take between three to seven years depending on size.

Beyond improving liquidity injection into the system through appropriate pricing (commercial pricing, which is the cost reflective tariff), whatever subsidy is pledged by government must be promptly and regularly paid as liquid injection to the sector so as to allow this sector to function in line with the natural economic flow of generation, transmission, distribution, billing, collection of payments. Liquidity flows into the system and every participant; the value chain gets compensated. That is the only way to ensure sustainable and continuous flow of the sector. Owing GENCOs make it difficult for them to sustain production. They need raw materials such as buy gas. Debt overhang makes it hard to pay for the gas. So, the issues must be resolved all along the value chain. Every segment has its own issues and what we have done is we have passed through the diagnosis stage. We already know what the problem is and the solutions are already documented comprehensively.

We are now at the stage of implementing and executing those solutions. In generation we just added 700 megawatts from Zugeru hydropower and has been commissioned and is under concession. We have the Mambilla power plant completed and adding 40 megawatts. Then we have a surplus 30 megawatts, which we need to complete the evacuation infrastructure to ensure that it is also wheeled onto the national grid. We have about 26 completed small hydro plants across the country which have been abandoned.

We are revisiting these dams now and we believe that during the period of 12 to 18 months, all of them will be revamped and they will add so much to our national grid. We are going to hybridize these farms with solar PV panels so that we can manage the water levels during the dry season. We can actually use the solar PVS to generate power. When it is evening and sunlight comes down, we switch to the hydro, in which case this will give us a regular power supply throughout the year. And we also revisiting the abandoned 15 solar IPPs to ensure that in the northern parts of Nigeria there will be small clusters of IPP solar plants to generate at the minimum 50 megawatts in each location across 15 states. That is additional seven 750 megawatts. Seven of the 10 NIPP plants under the Niger Delta Power Holding Company are operating effectively. They have a capacity of almost 5,000, but are all operating below 15% capacity. What we want to do is to ensure that we reach a resolution with the gas supply companies to ensure that we clear the debts overhang to a large extent and we have fine gas supply contracts to this plant so that we can upgrade their capacity utilization to nothing less than 50%. That will give us nothing less than 2,500. With all these, Nigeria can generate nothing less than 8,000 megawatts of power and that can be transmitted and distributed without adding any additional plants. In all we will have a total of almost over 13,000 megawatts capacity installed for our power plant, both the hydro and the gas power plants. So once all these hiccups are resolved, we can actually double electricity supply in Nigeria within a period of 12 to 18 months. And this will perform wonders in increasing in supply to the door steps of households, businesses, cottage industries, artisans and industries.

That’s for generation. We are also looking at the possibility of wind farms along the coastal cities of Lagos, Ogun, Ondo, Edo, Delta, Rivers, Bayelsa and Cross River. Already, we have a solar wind hybrid plant that is even completed in Katsina that can supply 20 megawatts of power. Then on transmission. It is general knowledge that Nigeria signed an accelerated agreement with Siemens on our Presidential Power Initiatives at COP28 in Dubai. The pilot which involved the importation of 10 transformers and 10 mobile substations is almost completed; five transformers has been commissioned in five different locations (Okene, Delta, Yobe, Abuja, and Benin). This added 272 megawatts to the capacity of our transmission grid. We also have JICA (Japanese International Cooperation Agency) handling the Lagos-Abeokuta corridor to improve the transmission capacity of our national grid. This multimillion-dollar project and execution is already starting. We have experienced a number of collapses in our transmission grid in the past few months. Many of them due to sabotage, deliberate demolition of the power lines, the power path. But most importantly it was due to the fragility of our transmission grid.

Today in Nigeria, the grid we have was built almost about 50 years ago without so much of maintenance. The lines are weak, the towers are old, some substations still have ECN (Electricity Company of Nigeria) of 1964 logos on their transformers. How do we expect optimal performance? We need what is called a super grid, which is a backup grid. When there’s problem on the national grid, power can be diverted to a backup grid. That is what happens in advanced countries. There is no country where you have national grid that they will not experience grid disturbance. There must be grid disturbance. It is electrical. There will be tripping off of substations, transformers for technical reasons, operational reasons, balancing frequency between product generation and their consumption. But they use what is called Scada, that’s the security control and data acquisition software which we have started implementing in Nigeria in the last 20 years, but have not completed.

The automated management of frequency on the grid is necessary and I am working to complete it in my time as Minister. We already have support from the World Bank to complete it in 24 months. We have started discussing super grid projects with two Chinese firms, the TBA and the CCECC. The super grid will strengthen and enhance the capacity of the national grid and make grid collapse to become a thing of the past in Nigeria.

Unfortunately, we also experience deliberate demolition our collective power assets. More than 10 instances in the last two months where fellow Nigerians has blown up paths and brought down power lines. These also contribute to grid collapse and epileptic supply of power to even Abuja. This sabotage is done both to under develop the country and for economic gains were stolen transformers, poles and cables are sold to unsuspecting buyers in the market. With these acts of sabotage, it is hard for government to achieve the kind of momentum that we desire in the power sector. It is therefore a collective responsibility to safeguard these assets.

Then lastly, the distribution. This is the big elephant in the room and the weakest link in the power sector and closest to the consumers of power. The strategy is to rearrange or restructure DISCOs along state lines so that every state government, every state ministry of energy, every state electricity board and every state board of rural electrification must know who they are dealing with because this is the retail end of the value chain. States are been encouraged to establish their own power plant when not satisfied with power supply from the federal level such as have happened in Abia state.  Geometrics will supply Abia 141 megawatt of power with capacity to upgrade to 180 where the State used to be supplied with only 50 megawatts from the national grid.

If every state has 100 megawatts in Nigeria, this will mean a combine 3,600 megawatts. The energy poverty will disappear and it can only get better. DISCOs must recapitalize. They need to bring fund into the sector. The only money they brought to this sector was the money they paid for acquisition of the DISCOs. They have not brought money to invest and power investment is huge investment. To establish a 132 KV substation today in Nigeria cost over $50 million. To install 100 kilometers of 11 KV lines cost tens of millions of dollars. So, if the DISCOs are really serious, they must bring money. They must reinvest money either through equity injection or debt capital so that they can fix all the lockdowns, the hiccups in the distribution network across the states. The state governments must be active. They know where the transformers are weak. They know where the power lines have deteriorated. They know where the poles are falling. They are closer to the people. The enabling act of 2023 has allowed this having moved the power sector from the exclusive legislative list to concurrent so that every level of government and the private sector can play in it. There should be collaboration, cooperation and partnership with the federal government.

For the underserved areas, the federal government will do direct intervention through rural electrification. Licensing of smaller DISCOs is areas where the existing discourse are not really making impacts is the strategy. This will enable the redistribution of catchment areas for the DISCOs who are not performing optimally without revoking their licenses.

Electricity is the right of every Nigeria irrespective of location, gender, or economic status.  There are businesses in rural areas that need more than solar energy to operate. They need power but the national grid may not get to them, not in the foreseeable future because of the commercial viability of those locations. The alternative is the installation of solar mini-grids and micro-grids. The World Bank, Africa Development Bank, JICA, and other development partners are supporting this.

Panelists:

1. Managing Director of Siemens Nigeria Limited Seun Suleiman
2. Managing Director Schneider Electric limited, Ajibola Akindele
3. Business Development Manager at Aveva Select West Africa, Shafe Dirisu
4. Executive director of Niger Delta Power Holding Company, Engineer Ifeoluwa Oyedele
5. Managing Director News Engineering Limited, Lady Josephine Nwaeze
6. Executive Vice President Gas Power and New Energies of NNPCL, Olalekun Ogunleye represented by the Chief Gas and Power Investment Officer of NNPCL, Alhaji Jamari Salihu
7. Country Manager Power Africa US Trade and Development Agency, Laura Spector
8. Vice Chairman African Energy Council Chinnan Dikwai
9. Managing Director Total Energies Gas Renewable Power, Engineer Adewale Fayemi.

Moderator: Mr. Olu Philip, Chairman Nigerian Association of Energy Correspondents and Energy Editor, Channels Television

Moderator:

Mr. Seun representing Siemens, tell us where we are today with the agreement that was signed with Nigeria in 2019 to achieve 25,000 megawatts of electricity by 2025.

Seun Suleiman

The acceleration agreements focus on transmission and we are now in the execution stage. We’ve identified the load centers, the critical points on the grid that is making the grid collapse. TCN, has been extremely supportive. They have identified brownfields and green fields. The Brownfields are existing substations that we can quickly rehabilitate, while the Greenfields are gaps on the grid that we need to build. We’ve also supplied 10 mobile substations and transformers in the pilot project. That has already added 272 megawatts to the grid. Currently as per transmission, the plan is to release 4000 megawatts of stranded power back to the grid. From a generation and an energy mix stand point, with all the Hydros working at full capacity, and all the conventional gas turbine working at full capacity that will add another 8000 megawatts to the grid. This we are working with the federal government to achieve in order to be able to start the execution of those gaps on the grid. Regarding project financing, we need to be able to accelerate to complete technical and financial closure in due time, because Mr. President has also given the mandate to the Honorable Minister, that we should be able to do this in 24 months.

Moderator:

The Minister mentioned Geometrics, let’s not forget that was encumbered by policies for 20 years. By that, for 20 years we kept innovations down, we kept accessibility down, we kept access to energy down. And that’s where we are today.

The grid power solution can’t be the only solution. Looking at smart solutions, how do you think these can enhance accessibility and relatively reliability?

Ajibola Akindele

There are a lot of opportunities when you introduce smart technology to the grid. It enables the grid to essentially become more reliable. And what we need is the reliability of the grid. Because the grid is presently extremely fragile, that’s why there is constant grid collapses, total grid collapse, partial grid collapse, and sometimes generation goes to very minimal numbers. With smart technology, solutions and equipment are able to communicate with each other and with the control sensors. That way they can actually tell you in advance when failure would happen. This helps in planning ahead to shadow maintenance operations. That reduces unplanned downtime caused by grid collapse. The other thing that smart technology can enable is self-healing. This is where the grid can actually repair itself, so to speak. When there is a breakage or an outage in a particular section of the grid, it can actually reroute power to other sections of the grid so that the outage is very, very minimal. And, obviously, with smart technologies, you can actually improve the way you allocate energy to the different parts of the grid.

For the consumers themselves, smart technology enables you to manage your own usage better, and smart meters will tell you how you actually consume electricity. And you can also manage what is called time pricing where you want to introduce peak energy pricing, off peak energy pricing, so they can encourage more people to use power off grid. And ultimately, with smart technologies you improve reliability. The GDP of any country is very closely tied to the amount of power generated.

Moderator:

What opportunities exist for local capacity building and skills development in the energy sector, because that’s also a critical point. And that will mean technology, and skills.

Shafe Dirisu

During my days working at TCN, I was fortunate to have saved the system from collapsing. I have a letter of certification to that. Before talking of capacity building, we also need to look into data management and the digitalization of the system. The Honorable Minister mentioned that the TCN has data. If so we should go further to determine if the data has been contextualized. When were they taken -in the peak time or off-peak time? Can we use it to judge the system and will the system respond with the data available in using in constructing the network? Data is a key area to look, because without it, it will be difficult to move forward. I am of the opinion that the little megawatt of electricity produced can managed in such a way as to avoid forced outages. With data in place, we can actually manage our outages because we can determine and mange supply even if we are producing only 3000 megawatts.

Regarding capacity building, as software developers we organize workshops to develop those who would want to further their interest in this sector. This we do by making available and training on right and proven technology for daily operational use. The meeting of the Honourable Minister for Power with the relevant 36 commissioners from the 36 States can also be considered as a measure of capacity building since it was meant to strengthen their knowledge of the power sector and what states can do to alleviate energy poverty in their individual locality.

Moderator:

Now that we have energy transition and renewable energies, what would you say are the barriers hindering the adoption of off-grid and decentralized energy solutions? What are the encumbrances?

Josephine Nwaeze

My company has been providing electrical solutions to Nigerians for the past four decades. Towards the end of last year, we celebrated our 40 years. Talking about barriers and taking energy to rural and underserved areas. My company is a very major player in this area. We built most of the substations in Nigeria. We also had built transmission line projects 330 KV from Gombe to Damaturu. We are also into rural electrification. We have also keyed into renewable energy. Ours is to make sure that we provide electricity to underserved areas. The Executive Order five signed by the past administration gave indigenous companies concession to do a particular thing where they have the capacity. If so, this Word Bank power project that is domiciled in Nigeria, I still find it difficult to define if it is a project meant for Nigerians, or foreigners. This is because both Nigerians and foreign companies are bidding for the same project. Bidding for World Bank projects where you are required to have a bank that guarantees you has been challenging because the banks end up charging you high interest rate. Also, access to funding is very difficult. This is one of the barriers, and why most of those projects have not been completed by many other Nigerian companies.

On the issue of capacity building, collaborations will eliminate those areas where individual Nigerian companies don’t have in-house capacity in any given area. But most of these components of off grid systems are not manufactured in Nigeria. So, we are deeply dependent on importation. There is not much to empower the indigenous companies to begin to manufacture these products locally. As long as we keep importing, the cost of production will continue to increase. So, if the federal government is really serious to take power to interior communities to the underserved areas, something has to be done. We should harness the resources in Nigeria to begin to manufacture things like solar panels, battery, etc. That way cost will come down. Free import duty for those willing to manufacture to bring in raw materials should be considered in order to compete favourably with Chinese finished products.

Moderator:

What are the current trends in Natural Gas utilization that you see because we still have some of the generation companies also complaining about gas and being able to also pay the gas producers?

Jamari Salihu

In terms of power availability in this country, thermal generation is the quick win for us to find a solution to power not only because we have a lot of gas underground, but because also the government has declared the decade of gas. Gas has been considered globally as a transition fuel. And therefore, utilization of gas is very important. But there’s one thing that everyone should know that if the minimum required by a gas supplier to produce a unit volume of gas is not met, it will discourage investors from investing in bringing this gas. Whatever we do, that’s the basic, the fundamental of it that these gas suppliers must have the minimum required for them to make this gas available. And the amount required to make this gas available will come from the end user tariff. Because the money that the end user pays will pay the DISCOs for distributing; will pay the electric transmission company; will pay the GENKOs; will pay the gas transmission company; and will pay the gas supplier. The moment the tariff at the end user and the money required to generate a unit volume of gas is not covered, then that model is not sustainable. Therefore, whatever we want to do, we must make sure that gas producers are paid at least the minimum they require for uninterrupted gas supply. If he doesn’t get gas out, it will affect the whole value chain. That is what we have today. Today we have pegged cost of gas to power even as it is not cost reflective of the entire value chain and operators along this chain. This has discouraged investment in the gas sector.

Moderator:

What is your agency doing as regards supporting energy access initiatives in Nigeria? Do you meet investors in this country?

Laura Specter

The challenge of access to finance – that’s something that my agency is very well positioned to help address. So, I’d like to offer maybe a solution to some of the challenges that we’re hearing today. I represent the US Trade and Development Agency, or USTDA. And my agency works alongside and in support of US industry to advance the early-stage development of infrastructure projects in emerging economies. We work in sectors that are key to the economic growth of our partner countries, but also that present commercial opportunities for US exports. The sectors, of course, include clean energy, which is why I’m here today. And then we have several tools that allow us to provide this assistance. But primarily we provide grant-based assistance. So, that’s grants for feasibility studies, technical assistance, and pilot projects. Our grant-based funding for project preparation helps us to de risk and unlock bankable infrastructure projects on the continent. And while we don’t provide access to financing ourselves, we don’t provide implementation financing, our work enables a pathway to financing to allow public and private sector capital to come in and support our partners projects. And I’m also positioned under the Power Africa initiative, which is a US government wide initiative with work from 12 different agencies, making this large network and together, we have the ambitious goal to add at least 30,000 megawatts of new reliable electricity generation capacity, as well as 60 million new home and business connections by 2030. And with much credit to the Power Africa program, USTDA, my agency has been able to support 136 activities across the continent in the energy sector. The types of work that we pursue address many aspects of the Clean Energy ecosystem. So, from mini grids to large scale transmission and distribution projects, we seek to strengthen grids through power delivery, and utilize us solutions, such as battery storage that can help increase reliability. And along those lines, while we focused on power delivery and reliability, we also want to focus on models that have economic viability, so looking at projects with productive uses of energy and support for the commercial industrial sectors. And then additionally, and lastly, you know, I would like to note that as an agency, we recognize our responsibility to take on risk. So, we really want to seek to pursue more activities in emerging sectors to really position our African partners ahead of the curve. And you mentioned international collaboration. I think that it’s also really important to have everybody on the same page to engage with stakeholders throughout the process of the project implementation lifecycle. So, another one of our tools. I know I’ve mentioned project preparation, but we also have partnership building activities, where we’ll convene partners from the public and private sectors in African countries as well as the US to discuss best practices, financing models, best regulations, and US technology, of course, that can address some of these challenges. So actually, just in in a few weeks from now, we’ll be hosting a green and sustainable financing workshop in Abidjan. This will address issues of green and sustainable financing models, and allow really to help unlock some of those financing throughout the continent. And again, I think it’s really, it’s important to emphasize the importance of this collaboration between the private sector financiers, developers to really create projects that are able to have a smooth transition from preparation to implementation, given that they incorporate best practices really, throughout that lifecycle.

Moderator:

How do regional corporations enhance energy and infrastructure development within the continent?

Chinnan Dikwai

Everyone’s talking about large centralized systems, large grid systems. And there’s a massive place for them. But I think the very vital ingredient that we miss are off grid systems, small decentralized systems. These are our lowest hanging fruit. That is what we should be looking at, in the very short term. If you look across the world, everyone’s decentralizing because the critical points of failure across a big system are several, but if decentralized system goes off it can easily be identified and fixed in very short time. I’m not advocating at all, that small, decentralized systems are the solution. I’m talking about a smart system, a system that combines what we have today, which is a large grid system working in tandem with the renewable energy systems that many people often discount. We’ve seen numerous examples look at an estate in Abuja, and today, many of them are being run by, you know, solar plants with battery systems. In the last 10 years, the cost of a solar panel has plummeted 90%. Think about that for a split second 90% drop in solar costs, 80% drop in batteries in the last decade alone. So, when you look at the trajectory, this is where everything is going. These technologies are reaching price parity with conventional, if not more. So, the solution does not need to just be about large centralized system. Let’s solve that problem right here with decentralized systems.

Moderator:

Total Energy is doing quite a bit in terms of renewables. How does transition to renewable energy sources contribute on a large scale to universal electricity assets even though at the moment it does appear that all of these things are happening right now in silos. Will an integrated offer help us do the numbers?

Adewale Fayemi

Clearly today, if you want to improve access to electricity, renewables definitely need to play a key role.  Renewable sources are there in Nigeria and Africa. They are infinite by nature. These need to be tapped into seriously to improve access to energy. Today Total Energies has been declared as the leading solar developer in the world due to the size of the portfolio. The company has got over 41 gigawatts portfolio today. Our mission is to deliver more energy, more affordable energy with less emission, and in a more sustainable way. In Nigeria with a huge deficit in electricity, we have recently established a company called Total Energies Gas Renewable and Power. We know that 14 power purchase agreements were signed for renewables. Till date, none is online. Clearly the country needs to make the environment actually investor friendly. Our focus right now is towards the off-grid space otherwise called commercial and industrial customers. We’re rapidly developing them. We’re doing a five-megawatt solar installation right now in Kano. We know that the country is blessed with sunshine. I mean, on the average we have at least 11 hours across the country. Even in the deep South like Lagos it is comparable to what you have in in Spain. And they have gigawatts of solar power. There is no way we can increase the power access without developing renewables.

Moderator:

Access to energy isn’t just as simple as plug and play. There are issues that need addressing such as the gas right pricing across the value chain, accessibility of credit, investment opportunities, etc.

Seun Suleiman

The first thing to bear in mind is that both renewables and conventional energy power all play a role in power access. What we need to be very specific on is at what points what comes in. At the end of the day, you need a solid grid. The metering side is also critical as long as there is transparency and harmonization at the back-end software of the various meter producers, which in turn will bring a lot of transparency in the front end. Lastly, we should all try and support the federal government because we all have a role to play in the value chain of the sector.

Ajibola Akindele

The minister highlighted how many times we have total grid collapses. And what you typically find is that even when the grid collapses, we all continue working. If it collapses in the UK, and the US or in any of the developed countries, it’s a massive problem. They literally cannot operate without the grid. But if you look at how we’ve organized ourselves in Nigeria, we actually do quite often operate without the grid. And so, my last word would then be how do we then focus again on distributed generation. It has to be a very key point for us. We have to focus on the grid, but we also have to look at distributed generation because it is already happening. The question then is how do we make it faster? And how do we make it cheaper and more affordable for our people so that we can quickly push out power to them at a fast pace, and at an affordable rate?

Shafe Dirisu

I am happy that we have the current Act, which has opened up the industry and given the players to come in, play their roles, open up the industry and we are good to go. The bottlenecks we’ve had in the past has been broken. And I am sure we will definitely get there. I am happy that we now have a direction.

Josephine Nwaeze

My parting word will come from the regulatory framework; the organizations that regulate the off-grid system. There’s a lot of overlapping functions between most of the organizations. When I tried to start manufacturing smart meters, we had to provide a lot of certifications. They mostly have their own requirements for the same things. This causes a lot of bottlenecks. To remove most of these barriers, we need to revisit our policies where there is overlap and remove them.

Jamari Salihu

I think accessibility of energy to everyone depends on availability and affordability. Availability also depends on investor friendly environment. An investor friendly environment will depend on the right compensation for the product or service rendered. I think we’re in the right direction. The Minister has said that agreements will be triggered. That means from the gas supplier willing buyer willing seller; GENCO to DISCO willing buyer willing seller; and that can go up to the end user. Governments can subsidize power. But government should know that whatever amount you subsidize, you have to fund it. Because if you don’t fund it, it will affect every other thing.

Laura Specter

I really would just like to reiterate that I think that there’s a lot of potential in the off-grid space, in the renewable space. If we can really just catalyze those transactions and project implementation. And you know, a great tool for that is just convening stakeholders carrying out the proper project preparation in order to de risk specific projects, but also to de risk the sector and ultimately, hopefully lead to more affordable capital, and more innovative financial models and economic models for these projects. So, we’re excited to see what’s to come in this space. And I think a lot of the work is being led by the people on this stage.

Chinnan Dikwai

I think if we’re to overcome energy poverty, we would need to think a bit differently to what we’re doing today. There is a huge focus on the centralized side of things, which I think is fantastic. But these things require very complex contracting and getting real specialist that are not here in Nigeria, in fact, it’s not here in Africa. So, you depend on lots of externals to get this done. If we think slightly differently, solar, the skill level of a solar plant is literally artisanal, you can literally walk out of here and find someone who can do it for you, and you find it everywhere. So, you need to think about that. 2030 is a real target. You have to think outside of the box. There are lots of complexities there and I think sometimes there are traps, actually.

Adewale Fayemi

What we are doing in Nigeria is tailor made clearly, because what we see in going into the power sector is the off-grid. That is all we’re doing. I will say we have a lot of plans in this country. We have one called Vision 30-30-30, meaning that in 2030, we want to have 30 gigawatts of electricity, 30% coming from renewables. Today, where are we? Zero renewables on the grid. Why is this not happening? It means the investment environment is not friendly. Seriously speaking in this country, we need to address those impediments. For investors to come and invest with this setup, access to energy improvement in this country will require a lot of capital and money only goes to friendly environments. We need to sit down and see how we can actually implement and execute all these policies that we have – decade of gas, vision 30-30-30.

Panel 12: Conversation Session and National Development Keynote

‘Powering Economic Growth and Development in Harmony with Natural Resources (Oil and Gas), Blue Economy, Energy Diplomacy

Panelists:

1. Chief Executive Officer and Principal of Petroleum Training Institute (PTI), Dr. Henry Adebowale Adimula.
2. Deputy General Manager Strategic Planning, Engineer Olayinka Ola, representing the Executive Secretary, PTDF.

Moderator: Dr. Mrs. Blessing Enakimio, Director of Events, Brevity Anderson

Moderator: This panel session is exploring parallel economic growth and development in harmony with natural resources, oil and gas, blue economy, energy diplomacy.

As the CEO of PTI, how can the Institute contribute to fostering inclusive economic growth in oil rich regions like the Niger Delta, particularly in terms of skill development, and capacity building?

Henry Adebowale Adimula

The Petroleum Training Institute, by function was established to train and develop capacity of Nigeria’s for the Nigerian oil and gas industry. For 50 years, we have been doing just that, and proud to say that we have contributed our quota to the development of the Gas sector in Nigerian economy. Our goal is to upskill and rescale and give people the necessary tools to be able to participate in this economy. What we do at the Institute is to train and develop capacity to make it more inclusive, especially taking into consideration the needs of the host communities. We have established functional skills development Academy, which we use to train people to have different skills. Some of them have become entrepreneurs who own small businesses rather than their relying on government to provide that elusive job.

Moderator:

Regarding the skills development academy, how are you making sure that the delivery of your training is tailored to suit each context of the industry that is changing vis-a-vis identifying the skills gaps and adapting the delivery of your content to this changing scenario?

Henry Adebowale Adimula

In the identification of the skills gap we partner with a number of critical stakeholders like the NCDMB to be abreast with skills shortfall in the industry. With this information we develop relevant and appropriate curriculum for training. Having operated in the Niger Delta of Nigeria for quite a while, experience in the region also enable us to identify the changing needs of the communities and industry players. This also impacts what skills training we deploy. PTI participated in the amnesty program and also partners with state governments to develop suitable and specific training needs.

As part of its training methodology, PTI trainings make use of technology as a matter of necessity; engages in one-on-one contact with trainees; and deploys practical content.

Moderator:

Engineer Olayinka, looking at it from a PTDF point of view, how can the your organization support initiatives that align with sustainable goals and energy development?

Olayinka Ola

PTDF is the agency of government that is directly mandated to develop capacities in the oil and gas industry. Sustainable energy development and adhering to environmental standards are front burner issues of the energy industry right now. Such trending issues impact the modules and curriculum of our capacity building programs. Our feedback mechanism is most valuable in this regard as it enables us to keep up with industry human resource needs. To enable us identify skills gap, we execute periodic skills gap audit where we engage with industry partners and government collaborating agencies in the sector. This audit gives us an idea of the skills set requirements in the energy industry real time. Our capacity building objective is then to bridge these gaps. We have three major approaches to do this: the human capital development programs, the institutional support programs, and the research and development for technology development. So, under the human capital development programs, we offer overseas scholarships for studies directly related to the energy industry at the Masters and PhD levels. Scholarships awarded to students in-country enable beneficiaries’ study in some federal universities. This is an ongoing process done every year. There are other training programs being implemented such as the Australian certification program for welders in the oil and gas industry, training for university lecturers, software training, training on the use of some critical software used for seismic interpretation and for exploration work in the in the oil and gas industry. There is also training of university lecturers in the use of modern teaching and research tools. Over 14,000 Nigerians has benefitted from the scholarship scheme since that program started. Industry training is another area for those already working in the industry.

Moderator:

Mr. Olayinka, what’s the impact of these scholarships and how do you measure it? How do you monitor them their return to Nigeria and what they do with the learning acquired?

Olayinka Ola

Before we send people for training, we look at the critical areas of need and evolving relevance to the industry. This knowledge comes from engaging with industry players on a regular basis. On return these beneficiaries are monitored and tracked through the instrumentality of their alumni of scholars. Feedback also comes from their jobs environment in the oil and gas industry. Others working outside Nigeria are also tracked through the alumni. PTDF also encourages these ones in the diaspora to come back and transfer the knowledge gained through training received and work experience in Nigerian universities for the benefit of university students. This is made possible because of the collaboration PTDF have with some Nigerian universities.

Moderator:

The classroom setting has not really changed, but methodology and teaching tools are evolving because of technology. Is there any consideration within your organizations on how to adapt your programs to align with modern technology and social learning methodology so as to be sustainable through time?

Henry Adebowale Adimula

We’re not training the same way we trained 20-30 years ago, especially since the COVID disrupted the statuesque of classroom physical contact teaching amongst other activities. PTI has had to adapt in many ways. Today, it’s very possible to learn on the go, as you rightly said, and one of the things we do at the Institute is to encourage this kind of learning. We have a program for lifelong learning – a school of industrial continuing education – where you can continue to learn at your own pace, using a lot of technology and a lot of materials that are available online.

Olayinka Ola

PTDF has also taken cognizance of that and inbuilt into our scholarship programs provision of laptops for all our students. We have also developed some training programs in the use of information technology. We sponsor conferences, workshops and seminars just to sensitize people on the need to embrace IT for right skills development in a changing world order, to be able to work remotely if need be, to function effectively, and to be skilled to function in a very digitalized environment.

Moderator:

The developed countries are now exiting fossil fuel production and focusing on cleaner energy. Oxford has scrapped their petroleum engineering degree. How relevant to Nigeria’s energy transition then is the training your scholarship beneficiaries are receiving in universities abroad? Or would you consider adapting a local centric training programs relevant to where we are on our transition journey?

Henry Adebowale Ademola

The training being received by our beneficiaries are tailored to meet identified gaps in order to impact the industry as we engage in the transition journey. For Nigeria today, energy still largely depends on fossil fuels. We are also adopting more of gas technology. PTI is in the works to establish a center for gas technology development in the country. PTI is also engaged in deepening its research and development efforts in order to be ready for both the transition and the destination projections. Still we are going at our own pace to maximize the benefits of our natural resources and exploit it in a sustainable manner.

PTI will continue to contribute to development capacity in the energy sector. Currently, we’re reviewing the national standards for all the skills in oil and gas industry, in partnership with critical stakeholders. We are positioned now and, in the future, to continue to deliver on our mandate and to build capacity of Nigerians in the energy sector.

Olayinka Ola

PTDF is presently concentrating on Nigeria’s needs right now, while at the same time keeping an eye on the issue of energy transition. PTDF is on board with the government’s commitment to net zero decarbonization by 2060. We are aware of the objectives of the Energy Transition Working Group to increase investment in the area of renewable energy and clean energy, and to improve investments especially in the power sector, the transportation sector, and in the cooking gas sector. PTDF is using data and is building capacities trying to develop different training programs so as to be able to key into these broad objectives of the government. This is in tandem with developing capacities as much as possible in the oil and gas industry.

PTDF is fully committed to ensuring that Nigerians participate effectively in the activities in the oil and gas industry as well as in the energy industry. And we will continue to develop our new programs, new initiatives, to be able to take advantage of developments that are currently occurring in the industry. We will try to support conferences, workshops, and seminars that can advance these issues so that we can bring people together to continue to talk about these issues, and to provide solutions where solutions are necessary.

Closing Ceremony Remarks

Closing Remarks by: Dr. James Shindi, Chief Executive Officer, Brevity Anderson

Dr. James Shindi acknowledged the presence of the special guest, Senator Dr. George Akume, Secretary to the government of the Federation who he said has participated in the Summit since the very first edition of this event. He went on to say, “I like to just thank everybody who’s been part and parcel of this conference. It’s been seven years now.” Dr. Shindi thanked everybody who’s been involved – the government for their support and encouragement, the LOC members, the Brevity team of really good people who work to produce this event. “All in all, if we add all the volunteers, full time staff, ad hoc staff, we have about 350 people who work together to put this event together, I’d like for us to please just give those people a round of applause for all the hard work. I will like to also thank our speakers and our sponsors who have been with us sponsoring this event for seven years now. Thanks to these people who have also attended this event for seven years now. And for those who have been with us for the very first time, we hope you come back again. And we look forward to seeing you again in 2025.”

Closing Remarks by: His Excellency, Ambassador Nicholas Agbo Ella, Permanent Secretary, Ministry of Petroleum, Nigeria

It is my honor and privilege on behalf of the Ministry of Petroleum Resources to address you at the closing ceremony of this wonderful Summit. The Ministry of Petroleum Resources, being the anchor of the Summit, deeply appreciate your presence here. As we gather for the closing ceremony of the seventh Nigerian International Energy Summit, I am filled with profound sense of accomplishment and gratitude. The Summit has been an incredible journey of knowledge sharing, collaboration and foresight. And it is with great pleasure that I address you on behalf of the Ministers of State for Petroleum Resources. This NIES 2024 has truly transcended borders hosting international delegates from over 50 countries who have actively engaged in shaping the discourse of the dynamic energy world order.

Moreover, the online streaming of the event has exceeded our expectation, raking in about 700,000 participants on the record we have seen. The depth and diversity of perspective shared during the summit have no doubt increased our understanding of the Nigerian energy sector. And we will crystallize that into a comprehensive report that will be shared with you and the government. This invaluable document will be transmitted to the Secretary of the Government of the Federation for onward convenience to the highest level of authority, encapsulating the collective wisdom and insight garnered from this Summit. Throughout the Summit, we dove into pivotal issues that illuminated the dynamic energy landscape. We addressed the pressing issues, the pressing need for a sustainable future and emphasized the urgency of adopting cleaner alternatives and reducing carbon emissions as part of the global energy transition. Discussions underscored the imperatives of energy security, exploring strategies to diversify sources and fortify infrastructure against geopolitical uncertainties. The role of technological innovation, including artificial intelligence and digitalization, was acknowledged as a key driver in optimizing energy processes. The Summit also underscored the importance of resilience in the face of uncertainties requiring strategic planning, adaptability, and flexible long-term energy frameworks. To this end, I extend heartfelt appreciation to His Excellency, President Bola Ahmed Tinubu, GCFR for his unwavering support and visionary leadership, as the head of the Ministry of Petroleum Resources. His dual role as President and substantive Minister of Petroleum Resources have been instrumental in stirring the cause of our endeavors in the energy sector. A special acknowledgment is due to our Ministers of Petroleum Resources, Oil and Gas respectively, for their commitment and exemplary leadership in organizing this Summit. Their dedication has been a driving force behind the success of NIES 2024.

I express deep appreciation to the Secretary General Organization of Petroleum Exporting Countries (OPEC), His Excellency, Haitham Al Chais and that of African Petroleum Producers organization (APPO), Dr. Umar Farouk, for their valuable contribution to the energy discourse. Their insights have enriched our understanding and paved the way for collaborative efforts in addressing global energy challenges. I also express gratitude to the representative of the International Energy Forum (IEF) for their active participation. The diversity of perspective brought to the table has enhanced the depth of our discussion, fostering a spirit of collaboration and shared responsibility in the quest of sustainable energy solutions. To our sponsors, exhibitors, delegates, visitors and the media, your unwavering support has been the bedrock of the success of NIES 2024. Your active engagement has infused vitality into the Summit and we are truly grateful for your continued commitment. I want to extend special thanks to the event planners, Brevity Anderson for their meticulous planning and flawless execution of the 2024 edition.

As we draw the curtains on NIES 2024 close, I am pleased to announce that the Nigeria energy sector look forward to welcoming the world back again to Nigeria for the eighth edition of the NIES in 2025. We anticipate even greater insight, collaboration and innovation, as we collectively navigate the dynamic energy sector. Before concluding, I would like to highlight a significant development discussed during the NIES 2024. That is the aspiration of the African Energy Bank. The unanimous opinion of the Nigerian delegation, Your Excellency, is that the federal government should strive to host the bank in Nigeria. And we call upon you, the Secretary to the Government of the Federation to do whatever it takes to bring this to realization and fruition. This endeavor is seen as a crucial step in addressing the funding deficiencies within Africa energy industry, further solidifying Nigeria’s commitment to regional energy stability and growth. We sincerely hope that the African Energy Bank initiative foster increase collaboration and prosperity in the broader African energy landscape. Finally, Your Excellency, let me express my heartfelt gratitude to all participants, speakers and contributors. Your position for the energy sector and commitment to sustainable practices inspire confidence in our collective ability to shape a brighter and more resilient future. God bless you all and for our foreign delegates who are leaving, we wish you journey mercies to your respective countries.

Honouring the two Secondary Schools’ Participants at the Summit by: His Excellency, Senator Dr. George Akume, Secretary to the government of the Federation on Nigeria

The Master of Ceremony invited the two secondary schools who participated in this seventh edition of the Nigeria International Energy Summit to proceed to the podium for recognition.

Each school starting with Britag Secondary School, Abuja and followed by Government Secondary School, Tudu Wada, Abuja, received the certificate of attendance from the most distinguished special guest, His Excellency, Senator Dr. George Akume, Secretary to the Government of the Federation. A photo session of the students with the special guest followed thereafter.

Closing Remarks by: Senator Dr. George Akume, Secretary to the Government of the Federation of Nigeria

I am honored to stand before you today as we conclude the seventh edition of the Nigerian International Energy Summit 2024. It is indeed a privilege to witness a culmination of this momentous event, which was of particular significance as a first edition under the new administration of President Bola Ahmed Tinubu, GCFR. The theme of this year’s summit, “Navigating the Energy World Order: Security, Transition and Finance,” underscores the complexities and challenges that our great nation faces. The dynamic landscape of the global energy sector.

This theme is not just a reflection of current realities, but a call to action for all stakeholders to collaboratively address the critical issues that lie at intersection of energy security, transition, and financial sustainability. The Nigerian International Energy Summit has evolved over the years into the most prestigious gathering of minds in the energy sector. This edition has been no exception. We have been privileged to host industry leaders, policy makers, and experts who have shared their insights, experiences, and expertise. Exchange of ideas and the spirited discussions witnessed here have undoubtedly chartered a course for the future of energy in our nation and the spirit of inclusivity and cooperation.

The summit has provided a platform for stakeholders to engage in meaningful discussions on innovations, policies, advancements, and overall trajectory of the energy sector in Nigeria. The knowledge shared and relationship fostered during the summit will undoubtedly serve as a catalyst for the transformative changes that lie ahead.

I wish to express my sincere appreciation to all the participants, sponsors, and partners who have contributed to the success of this summit. Your commitment to the sustainable development of the energy sector in Nigeria is commendable, and I am confident that the collaborative efforts initiated here will yield tangible results in the days and years to come.

To bring to an end the seventh edition of this summit, let us carry forward the momentum generated during these insightful discussions. Let us remain committed to the ideas of energy security, transition to sustainable practices and the financial viability of our energy sector. This summit would indeed serve as a catalyst for positive change, innovation, and resilience in the face of the challenges that lie ahead.

I look forward to witnessing the impact of the ideas and strategies generated here as we work together to navigate the new energy world order for the renewed hope agenda of this administration. I want to assure the Summit that the request of the Permanent Secretary, speaking on behalf of the Ministers of State, will be become conveyed appropriately to the right quarters.

God bless you. God bless the Federal Republic of Nigeria.

Communique

Introduction

The 7th edition of the Nigeria International Energy Summit (NIES 2024) convened in Abuja, bringing together key industry stakeholders, operators, and decision-makers. Under the theme “Navigating the New Energy World Order,” the summit explored critical issues related to energy security, transition, and financial strategies.

1. Energy Mix and Security: A Call to Action.
   • The imperative of continuing the conversation around the energy mix cannot be overstated.
   • Until the recent Russia-Ukraine conflict, this dialogue had waned.
   • Africa must forge its own energy security path by reinvesting fossil fuel revenues.
   • Balancing renewables and hydrocarbons ensure energy stability without compromising environmental goals.
   • Nevertheless, oil and gas will remain significant in energy mix by 2045

2. Climate Change Complexity and Mitigation.
   • Climate change presents a multifaceted challenge.
   • A diverse array of mitigation measures and multiple pathways is necessary.
   • Framing energy transition as a single formula—such as halting oil and gas exploration—is erroneous.
   • Striking a pragmatic balance between meeting Africa’s growing energy needs and preserving the environment is crucial.

3. Gender Sensitivity and Empowerment

• Deliberate efforts are needed to tap into the innovative minds of women and youth.
• Mentorship, collaboration, partnerships, and sponsorship can drive inclusion and diversity.

4. Expanding Gender Balancing Beyond Employment.

• Gender balancing should extend beyond employment.
• Empowering women to run their own businesses is essential for sustainable progress.

5. Digital Technology for Sustainable Transition.
   • Investment in digital technology is imperative.
   • It enables real time decision-making, waste reduction, efficiency, and workforce reskilling.
   • Local context and adaptability must guide technology adoption.

6. Strategic Reserves for Stability

• Investment in strategic reserves for oil and white products should be given the highest priority to ensure stability.
• These reserves act as a buffer during supply disruptions or price fluctuations.

7. Collaboration with Ministries for Advocacy.
   • Energy and environment ministers in Africa should not talk at cross purposes.
   • Engaging ministers from various ministries is crucial for informed advocacy.
   • Informed advocacy enhances Africa’s energy security and sustainability.

8. Blueprint Implementation Challenges.

• Nigeria’s gas masterplan, energy transition plan, the Petroleum Industry Act, National Energy Policy, Power Policy, etc all hold solutions if harmonized.
• Implementation challenges persist because institutions are working in silos or at cross purposes.
• All stakeholders must collaborate to drive the transition from blueprint to reality, through a synergized implementation plan.

9. Holistic Local Content Development.
   • To ensure local content development balancing energy availability, security, sustainability, environmental impact, and technology advancement is essential.
   • Ensuring an enabling environment for local investors is critical.

10. Balancing Renewables and Hydrocarbons.
    • African countries should not remain passive observers but can forcefully play in the exploration of transition metals (copper, Lithium, etc).
    • Adequate resources must flow into developing abundant renewable assets while optimizing hydrocarbon resources.
    • A balanced approach ensures energy security without compromising environmental goals.

11. Africa’s Fossil Fuel Use and Victim Mentality.
    • Africa’s negligible contribution to global climate change warrants compensation from heavy contributors.
    • The victim mentality in energy transition discussions must cease.
    • Let’s focus on leveraging energy resources strategically.
    • Concrete strategies, local content development, market enhancement, and infrastructure financing are essential for uplifting the energy-poor population of 600 million.

12. Energy Banks for Local Funds.

• Recognizing the continent’s underbanked status, oil-producing countries in Africa should consider establishing their own energy banks to mobilize funds for the energy sector.
• Even non-oil-producing countries should invest in the energy banks of oil-producing nations.
• Our collective responsibility is to ensure that African money remains within Africa.

13. Collaboration and Decisive Action.

• Evolving global and domestic factors pose challenges.
• Nigeria’s independent energy players have historically demonstrated resilience and adaptability.
• The current industry landscape demands collaborative efforts.
• Government and exploration and production (E&P) companies must commit to decisive actions that will translate Africa’s natural resources into tangible social and economic benefits.

14. Accelerating Gas Distribution Infrastructure.

• The completion of existing gas distribution infrastructure in Nigeria is overdue.
• Delays hinder gas-dependent projects and the growth of the domestic cooking and auto gas market.
• Urgent action is needed to enhance gas accessibility and affordability.

15. Systematic Asset Transfer from IOCs.

• Asset transfers from international oil companies (IOCs) to independent producers should follow systematic processes.
• A situation where sellers signal their intent to leave while buyers struggle to take over operations harms both the sector and the country.

16. IPPG Group’s Resilience and Asset Integrity.

• The Independent Petroleum Producers Group (IPPG) must prioritize resilience and asset integrity over immediate profit making.
• Extracting maximum value from assets acquired from IOCs requires, innovation, robust community engagement, robust management and operational excellence.

17. Logistics and Infrastructure Sharing.

• Infrastructure scarcity poses a significant challenge within the energy sector.
• To address this, we propose fostering a culture of logistics and infrastructure sharing among operators across the value chain.
• Collaboration is essential for achieving efficiency and optimization, ultimately benefiting the entire energy ecosystem.

18. Enhancing Competitiveness and Coordination.
    • The Nigerian oil and gas industry, while resilient, faces hurdles in maintaining competitiveness.
    • High business costs and regulatory overlaps across institutions and government tiers hinder progress.
    • To prevent exhaustion, we emphasize the need for a coordinated energy vision. Swift action, guided by a shared strategy, will enhance competitiveness and drive sustainable growth.
    • Implementing policy directives on cost reduction and crashing contracting cycle is critical.

19. Leveraging the Oil Sector for Relief.

• Given Nigeria’s foreign currency constraints, the oil sector offers immediate relief.
• Sustaining security efforts in the Niger Delta is critical to maintaining production targets and mitigating rising prices of goods and services.
• The oil sector remains a vital lifeline during these challenging times.

20. Addressing Legacy Debts.

• We commend ongoing efforts to resolve legacy debts in the gas-to-power sector.
• However, it is crucial to learn from past mistakes. By implementing robust financial management practices, we can ensure a more stable and resilient energy sector.
• Fast-tracking debt resolution while avoiding recurrence of similar circumstances is paramount.

21. Investments in Downstream Infrastructure.

• Downstream infrastructure investments are vital.
• Refining crude oil is a principal downstream operation that ensures product availability at competitive prices.
• Addressing deficits in downstream products requires strategic investment.
• The midstream, downstream infrastructure fund (MDGI) should be effectively utilized.

22. Cross-Continent Infrastructure for Energy Development.

• The need for cross-continent infrastructure remains paramount.
• Collaborative efforts are necessary to develop Africa’s energy sector.
• Infrastructure projects must span borders to enhance energy accessibility and sustainability.

23. Intra-African Trade and Investment.

• The saying “he who pays the piper dictates the tune” holds true.
• We must decide who funds our energy endeavours—our fellow Africans or foreign investors.
• Developing an intra-African market, where we sell amongst ourselves, will reveal Africa’s true wealth.
• Every African country should invest in the Africa Energy Bank.
• Trading within Africa is essential to avoid being at a disadvantage.

24. Data and Digitalization Enhancement.

• Recognizing the pivotal role of data and digitalization, we urge all stakeholders to enhance their efforts in utilizing these tools effectively. By doing so, we can accurately assess the value generated in power production, transmission, and distribution, ultimately benefiting end users.
• Data should also be contextualized to enhance interpretation and usage.

25. Cost of Gas Production.

• Issues of proper pricing of gas should be resolved in the interest of both providers and users to ensure economic stability and deeper penetration of gas usage.

26. Government Subsidies and Equitable Compensation.

• When government subsidies are extended to end users, it is equally crucial to compensate gas providers along the entire gas-to-power value chain. A harmonious balance between power production costs and supply must be maintained.

27. Integration of Power Systems.

• To combat power poverty, there should be an integration of large-scale national grid infrastructure with decentralized smart systems. This synergy will enhance reliability, efficiency, and equitable power distribution.

28. Capacity Building and Adaptation.

• The energy industry acknowledges the evolving landscape of technology and global dynamics. Our training institutes and academia are committed to continuously adapting curricula and knowledge dissemination methods. By doing so, we ensure that our workforce and decision makers remain relevant and well-prepared.

29. Natural Gas: A Pathway to Prosperity for Indigenous Communities

• Natural gas stands as a cleaner alternative to traditional fossil fuels like coal and oil. Its combustion emits lower levels of greenhouse gases and pollutants, making it a more sustainable option for energy production.
• Abundant natural gas reserves worldwide ensure a reliable and long-term energy source.
• Investments in natural gas infrastructure increases its availability and affordability.
• By connecting Indigenous communities to this reliable energy source, we can significantly enhance their standard of living and overall well-being.
• Reinvesting this revenue can support critical needs like education, healthcare, and infrastructure development.

30. A Paradigm Shift: Gas as a Destination Fuel.

• Let us view natural gas not merely as a transition fuel but as a destination fuel. Its potential lies beyond bridging gaps—it can be the cornerstone of our energy future.

31. Investing Locally: Sovereign Wealth Funds

• African countries should reconsider their investment strategies. Instead of directing sovereign wealth funds to the West, let us channel these resources toward our own continent.
• By investing locally, we strengthen our economies, create jobs, and foster sustainable growth.

Appendix One

Nigerian International Energy Summit (NIES) Annual Workforce Development Workshops for Future Industry Leaders 

The Nigerian International Energy Summit (NIES) conducted its annual workforce development workshops aimed at cultivating future leaders in the energy, oil and gas sector. This workshop targeted young professionals seeking to enter the energy industry, established professionals considering a career transition into the sector, and those looking to advance within it.

General Proceedings and Activities: Day 2, Tuesday, February 27^th, 2024

The workshop commenced with a job fair, offering participants opportunities for networking and employment prospects. Additionally, there were sessions dedicated to curriculum vitae checks and mock interviews, providing valuable feedback to attendees. Furthermore, an exhibition tour took place, showcasing relevant industry advancements. Key topics covered included strategies for positioning oneself for global relevance within the energy sector and effective preparation for job interviews.

General Proceedings and Activities: Day 3, Wednesday, February 28^th, 2024

The workshop sessions featured engaging activities such as energy lab pitches, promoting innovation and creativity among participants. Furthermore, a presentation highlighting the importance of encouraging girls to pursue careers in STEM was conducted. A notable highlight was a question-and-answer session with Austin Mgbemere, Managing Director of Rockview Integrated Energy Solutions, offering insights and perspectives from an industry leader.

General Proceedings and Activities: Day 4, Thursday, February 29^th, 2024

A special presentation by GIZ provided valuable insights into sustainable practices within the energy sector, emphasizing the importance of environmental responsibility. Additionally, a panel session focused on the Path to Net Zero, addressing critical strategies for reducing carbon emissions and achieving sustainability goals.

General Proceedings and Activities: Day 5, Friday, March 1^st, 2024

The workshop concluded with a student education workshop, aimed at imparting knowledge and skills to the next generation of energy professionals. A youth talk session provided a platform for attendees to share perspectives and ideas. Finally, certificates were awarded to participants, acknowledging their successful completion of the workshop.

Conclusion

Overall, the NIES 2024 Workforce Development Workshops facilitated a dynamic and comprehensive learning experience, equipping participants with the knowledge, skills, and networks necessary to thrive in the ever-evolving energy industry landscape.

Appendix Two

Highlights from GIZ Special Session

Opening Remarks by: His Excellency, Johannes Lehne, Deputy Ambassador of Germany to Nigeria

Theme: The Oil and Gas Sector and the Path to Net Zero.

H.E. Johannes Lehne highlighted the collaborative commitment between Nigeria and Germany in addressing global challenges such as climate change and transitioning to sustainable energy sources.

Mr. Lehne emphasized Germany’s support for its international partners through initiatives like the German Nigerian Hydrogen Office, aimed at decarbonizing and diversifying Nigeria’s industry.

Reflecting on Germany’s own transition to renewable energy, he noted significant investment, innovation, and international cooperation involved.

Mr. Lehne highlighted the shift accelerated by events such as the disruption of gas imports from Russia, leading Germany to increase its renewable energy capacity.

Acknowledging Nigeria’s strategic importance in Africa’s energy landscape, he emphasized the country’s path to net zero emissions as crucial for global climate change targets and economic development. Mr. Lehne expressed support for Nigeria’s ambitious plan to increase renewable energy production by 2030.

He praised Nigeria’s economic reforms and emphasized the need for a stable investment environment to attract international investment. Mr. Lehne advocated for cooperation in renewable energy projects, particularly in solar mini-grids, hydropower, and potentially geothermal energy.

Expressing concern over proposed levies on foreign employees, he urged reconsideration to maintain investor confidence. Mr. Lehne concluded by emphasizing the shared global challenge of achieving net zero emissions and reiterated Germany’s determination to work with Nigeria towards this common goal.

Opening Remarks by: Markus Wagner, GIZ Country Director for Nigeria and ECOWAS, Represented by Duke Benjamin, GIZ Cluster Coordinator, Just Transition and inclusion. Head, Nigerian Energy Support Program

Dr. Markus Wagner expressed his pleasure at participating in the session on the oil and gas sector and the path to net zero. He highlighted GIZ’s history in Nigeria since 1974, implementing approximately 35 projects across various sectors, including agriculture, sustainable economic development, peace and security, health, and climate and energy. Dr. Wagner emphasized the longstanding cooperation between Nigeria and Germany in the energy sector, which has facilitated transformative initiatives.

Dr. Wagner discussed GIZ’s extensive energy and climate portfolio in Nigeria, focusing on enhancing energy assets and efficiency, promoting renewable energy sources, and advancing low carbon technologies. He cited initiatives such as the Nigerian German Energy Partnership and the Nigerian Energy Support Program, which have fostered investments in renewable energy, energy efficiency, clean cooking, and rural electrification.

Highlighting GIZ’s involvement in low carbon hydrogen initiatives, Dr. Wagner mentioned programs like the Nigerian German Nigerian Hydrogen Office and the Hydrogen Market Ramp Up program, supported by the German Federal Foreign Office and the Federal Ministry for Economic Affairs and Climate Action.

He emphasized the importance of collaborative efforts in transitioning to a net zero economy, particularly in the oil and gas sector, and the potential of innovative solutions such as low carbon hydrogen. Dr. Wagner expressed gratitude to participants for their commitment and participation, underscoring the collective journey towards a future worth living.

Opening Remarks by Ekperikpe Ekpo, Honourable Minister of Petroleum Resources (Gas), Federal Republic of Nigeria, Represented by Mr. Shittu Abubakar, Deputy Director, Gathering and Infrastructure Ministry of Petroleum Resources

The Honourable Minister of Petroleum Resources (gas), thanked GIZ for organizing the event and acknowledged the support of the German government in various critical sectors in Nigeria. Ekperikpe Ekpo highlighted the significance of energy, especially oil and gas, in everyday discussions and events like this, which bring together experts to analyze challenges and offer solutions.

Reflecting on Nigeria’s commitment to achieving net zero emissions by 2060, he emphasized the importance of considering energy security within the oil and gas sector. Ekperikpe Ekpo mentioned various mechanisms put in place to achieve net zero, including ending gas flaring by 2030 and implementing regulatory measures such as requiring every new oil and gas project to have a zero-flare plan.

He noted the adjustments made to the penalty for gas flaring and highlighted the positive outcomes reflected in reports such as the World Bank Global Gas Flaring Tracker. Ekperikpe Ekpo also mentioned collaborations with the US Embassy and Deloitte to explore technology for reducing emissions in the oil and gas sector.

Recognizing gas as a cleaner source of energy, he emphasized Nigeria’s adoption of gas as a transition energy. He highlighted Nigeria’s abundant natural gas resources and its focus on utilizing gas while also acknowledging the importance of carbon capture, storage, and utilization in blue hydrogen developments.

Presentation by: Eng Joseph Ogunsola Deputy Director, Energy Transition Carbon Monetization NUPRC

Subject: Best practices and the way forward in the decarbonization of the oil and gas sector

Eng Joseph Ogunsola remarked that under the leadership of Gbenga Komolafe, NUPRC forged stronger ties and partnerships to improve energy access and address climate concerns nationally and globally. Ogunsola emphasized the importance of collaboration in entrenching energy access and addressing global climate challenges.

Ogunsola provided an overview of NUPRC’s role as the primary regulator of the upstream oil and gas sector in Nigeria. He highlighted the commission’s role as business enablers, promoting positive actions, best practices, and creating value from natural resources for the benefit of all stakeholders and the nation.

He emphasized the inevitability of energy transitions throughout history, noting shifts from manual methods to renewables. Ogunsola stressed the importance of responding to these transitions, preparing for them, and ensuring inclusivity, balance, and equity.

He highlighted the role of collaboration in driving sustainable energy transitions and emphasized the need to accelerate the transition story, make it cost-effective, and utilize technology to drive renewables. Ogunsola concluded by underscoring the key role of collaboration in achieving sustainable energy transitions.

Panel Session: The Path to Net Zero

Panelists:

1. Duke Benjamin, Cluster Coordinator, Just Transition and inclusion. Head, Nigerian Energy Support Program GIZ.
2. Micheal Ivenso, Director, Energy, Transportation and Infrastructure at National Council on Climate Change. (NCCC)
3. Engr Idara Ekpo, CVO, Alternative Petroleum and Power limited 

Moderator: Olabode Sowunmi Senior Legislative Adviser to the Senate Committee on Gas

Moderator 

What role do you see the developmental sector playing in helping us to achieve what we want to achieve in terms of our net zero emissions?

Duke Benjamin 

In his response, Mr. Benjamin emphasized the role of GIZ, acting as a messenger for the German government, in facilitating development in Nigeria. Initially focused on discussions around gas, the partnership has evolved to prioritize energy transition, carbon neutrality, and a low-carbon economy. GIZ’s work now revolves around supporting Nigeria with cleaner technologies, renewable energies, and energy efficiency to align with the country’s energy transition plan and climate change initiatives.

Moderator 

Michael, your thoughts on the same question?

Micheal Ivenso  

Mr. Micheal Ivenso highlighted the catalytic role of development institutions in incentivizing and implementing leading technologies and global best practices, particularly in the context of Nigeria’s energy sector. He emphasizes the importance of leveraging Nigeria’s abundant gas resources to transition to cleaner energy alternatives, such as hydrogen. The support from the German government and the European Union is seen as crucial in accelerating Nigeria’s adoption of these technologies. Overall, institutions aim to enhance access to energy in various forms, with partnerships playing a key role in advancing these efforts.

Moderator From your experience working on the many projects, what do you consider the two, three critical challenges that should be overcome by Nigeria and by stakeholders in achieving net zero?

Idara Ekpo  Engr Idara Ekpo emphasized the critical challenges faced by Nigeria and stakeholders in achieving net zero emissions, particularly in transitioning from fossil fuels to hydrogen. He highlighted the need for significant climate financing to address the high costs associated with such transitions. Additionally, he stressed the importance of robust climate governance frameworks to facilitate private sector involvement in the shift to hydrogen. Ekpo underscored the collaborative nature of achieving these goals, calling on major players like NNPC to contribute funds and urging private sectors to set ambitious targets for reducing emissions. Overall, he emphasized the need for concerted efforts from both government and private sectors to drive meaningful change towards net zero emissions.

Moderator

Michael, your thoughts on the issue of critical challenges.

Micheal Ivenso

Mr. Micheal Ivenso identified financing as the primary barrier to the uptake of renewable energy and alternative fuel sources, emphasizing the need to direct sustainable financing towards supporting these initiatives. He referenced a specific example from COP 28 where the Infrastructure Corporation of Nigeria collaborated with a Dutch firm to establish a photovoltaic manufacturing plant domestically, aiming to reduce reliance on imports and foreign exchange exposure. This initiative also aims to create renewable energy jobs and develop technical skills within Nigeria. Ivenso highlighted the government’s role in creating an enabling environment through tax breaks, zero import tariffs, and regulatory frameworks to attract investors and facilitate finance flows into the sector. He underscored the importance of achieving a balanced energy mix by 2035-2040 as outlined in Nigeria’s energy transition plan, paving the way for a deliberate journey towards net zero emissions by 2060.

Moderator

Mr. Duke, your thoughts.

Duke Benjamin 

Mr. Duke highlighted two key aspects. Firstly, he emphasized the role of technology and technical assistance provided by development agencies like GIZ, commissioned by the German government. These agencies work on various projects to raise awareness about incentives and possibilities in renewable energy. They also focus on building capacity by training technicians and industry players, facilitating understanding of renewable energy concepts, business case development, and utilization of incentives provided by the Nigerian government. Additionally, pilot projects are conducted to demonstrate the benefits of greener technologies and incentivize their adoption, ultimately reducing production costs and environmental impact. This collaborative effort involves engagement with all stakeholders to ensure effective implementation.

Moderator

How do you see the overall concept of the taxing mechanism helping us achieving our hydrogen goals?

Duke Benjamin

Mr. Duke Benjamin discussed the concept of a taxing mechanism, particularly carbon tax, and its role in achieving hydrogen goals. He described carbon taxing as a complex global topic that evolves over time. The mechanism aims to incentivize emission reduction by imposing higher taxes on those emitting more carbon. Conversely, economies adopting climate-friendly technologies are expected to assess taxes paid by others to facilitate their investments. Although there are ongoing discussions about the adequacy of current carbon tax rates, the overarching goal is to encourage the transition to less emitting economies and incentivize the adoption of cleaner technologies.

Micheal Ivenso 

Mr. Ivenso underscored the principle of “emitter pays” as the foundation of climate decarbonization efforts. He discussed the carbon pricing mechanism, focusing on the flare penalty in the upstream sector. This penalty incentivizes good behavior among operators by discouraging gas flaring and promoting gas monetization projects. He highlighted the Nigerian carbon market activation plan announced at COP 28, which allows project developers to monetize emissions reduction efforts. This approach not only encourages emission reduction but also rewards good climate behaviours and promotes efficiency improvements in operations, such as converting gas power plants to combined cycle for greater efficiency and reduced emissions.

Idara Ekpo 

Engr Ekpo discussed the implications of taxation on emissions and exports, emphasizing the need for targeted emission reduction strategies to avoid profit loss due to taxation in international markets. He advocated for setting clear emission reduction targets for different timeframes, urging the government to adopt principles and credit covenants to incentivize emission reduction efforts by the private sector. Ekpo emphasized the importance of proactive measures to mitigate taxation risks and promote sustainable practices in the oil and gas industry.