Nigeria’s Minister of State for Petroleum, Chief Timipre Sylva, said financing remains the main constraint to unlocking the potential of Nigeria’s oil and gas sector.
The Minister revealed this during the African Energy Chamber (AEC) Roundtable in Johannesburg, South Africa this weekend.
According to him, Nigeria, like most oil-producing countries in Africa, has problems with investments from everywhere because the world is rapidly moving towards renewable energy.
Sylva said Africa is not ready to move away from oil and gas as there are huge amounts of people without access to energy, and hydrocarbons would enable African countries to meet the targets. of SDG 7 to provide access to reliable energy.
“We have decided that Africa-based financial institutions, such as the African Energy Bank, which the African Petroleum Producers Association works towards, will be the ones to finance African energy developments.
“International oil companies are increasingly interested in offshore investments because the tax conditions are attractive. If we maintain attractive fiscal conditions, we will get more funding from international parties.
“Africa will have to use hydrocarbons to produce electricity. Gas is our choice for producing and increasing access to electricity. One of the projects we are rolling out in Nigeria is a large gas turbine in Abuja, which was previously unthinkable as there was no gas supply.
“In the north, we have a company looking to invest in an energy island. The project will transport gas virtually from the south via the Ajaokuta–Kaduna–Kano (AKK) pipeline. A lot of industries that had been shut down are getting back to business thanks to AKK’s access to gas and with the gas we will be able to solve 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 out of Nigeria. For example, between Nigeria and Togo, we have a pipeline that we will extend to Morocco to support electricity production. We cannot quickly switch 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 passage of the Petroleum Industry Act.
“Unfortunately, now that we’re ready, a lot of things including energy transition are driving down interest in the oil industry. However, with the PIA-enabled regulatory institutions now in place, we’re seeing interest from investors in Nigeria and international companies such as Shell, Chevron and ExxonMobil who have pledged to make additional investments in the offshore sector as some of these companies move away from onshore operations.”