Nigeria’s Minister of State for Petroleum, Chief Timipre Sylva has stated that funding remains the main constraint in harnessing the potentials of Nigeria’s oil and gas sector.
The Minister disclosed this during the Africa Energy Chamber (AEC) Roundtable in Johannesburg South Africa at the weekend.
According to him, Nigeria, like most oil producing nations in Africa, has problems with investment from everywhere because the world is moving fast to renewable energy.
Sylva stated that Africa is not ready to move away from oil and gas because there are huge amounts of people without access to energy, and hydrocarbons would enable Africa countries to meet the SDG 7 goals of providing access to reliable energy.
“We have decided that Africa-based financial institutions such as the African Energy Bank which the African Petroleum Producers Association is working towards will be the ones to fund African energy developments.
“International oil companies are increasing their interest in offshore investment because fiscal terms are attractive. If we keep fiscal terms attractive, we will get more funding from international parties.
“Africa will need to utilize hydrocarbons to generate power. Gas is our choice to produce and increase electricity access. One of the projects we are deploying in Nigeria is a major gas turbine in Abuja, which was previously unthinkable because there was no gas supply.
“In the north, we have a firm seeking to invest in an energy island. The project will transport gas virtually from the south via the Ajaokuta–Kaduna–Kano (AKK) Natural Gas Pipeline. A lot of industries which had shutdown are now coming back into operation owing to access to gas from the AKK and with gas we will be able to resolve our energy problems.
“We are trying to build more gas turbines, gas grids and pipelines from Nigeria south to Lagos and we are taking these pipelines outside Nigeria. For instance, between Nigeria and Togo, we have a pipeline which we will extend to Morocco to support electricity production. We cannot move quickly to renewables: we are not ready, and we are happy that the world is redefining gas as a clean fuel.
Speaking on investments, Sylva said Nigeria’s oil and gas sector is ready for investors with the passing of the Petroleum Industry Act.
“Unfortunately, now that we are ready, many things including the energy transition are dwindling interest in the oil industry. However, with regulatory institutions enabled by the PIA now in place, we are seeing interest from investors in Nigeria and international firms including Shell, Chevron and ExxonMobil who have committed to making additional investments in the offshore sector as some of these firms move away from onshore operations.”