The Nigerian National Petroleum Company Limited (NNPC Ltd), says COVID-19 recovery and volatility triggered by Russia-Ukraine war occasioned rapid rise in oil and gas demand as a result of fear of fuel scarcity.
The NNPC Ltd said this had necessitated further investment in oil and gas.
Sen. Margery Okadigbo, Chairman, NNPC Ltd. Board, said this on Wednesday in Abuja at the opening of NNPC Upstream Investment Services (NUIS) session, tagged “Oil and Gas: The Investment Gap Dilemma”.
The session was held on the sidelines of the Nigeria International Energy Summit 2023 (NIES), holding from April 16 to April 20, with the theme “Global Perspectives for a Sustainable Energy Future”.
Okadigbo, in a remark, said as the continent continued to grow, oil and gas industry was reflective with need for investment.
“While we are seeing rising demands and increased competition amongst buyers, it is still expected that our concerns for climate change push towards lowering our carbon footprint.
The dilemma for investment in fossil fuel is still great but energy transition must contain investment for correlating prices and significantly supporting investment.
“Should we continue with the investment needed to meet the demand or should we succumb to the fear of having an investment on worthless future and push insufficient funds into fossil fuel industries?” she queried.
She said in spite of the uncertainties of the industry, it remained a critical driver of global economic growth.
“And as long as we hold continuously in line with fossil fuel policies, the demand will remain strong, making the industry a stable and reliable source of long-term investment,” she added.
In a presentation, Mr Bala Wunti, Chief Upstream Investment Officer, NNPC Upstream Investment Services (NUIS), said all nations were scared to have energy security and eager to invest.
Wunti, represented by Mr Chisoma Elewa, Head of Finance at NUIS, explained that the economic development of post-COVID-19 era and the Russia-Ukraine war occasioned a change in the trend.
He said with the Petroleum Industry Act (PIA) implementation, there was favourable investment environment for investors while it clearly separated policy regulations from commercials.
He said 2022 witnessed massive capital expenditure increase of 39 per cent in the sector which was a high investment compared to 2021 but fortunately PIA was signed which brought changes.
This, he said, provided foreign investment climate and established a profit-driven NNPC Limited while Foreign Direct Investment moved gradually from US$3.8 million to US$4 million.
He said part of its notable achievements was the establishment of Hydrocarborn Industrilisation Security Architecture which had enhanced production.
In a panel session, Mr Funmi Ogue, Managing Director, Zigma Energy, called for an industralised Nigeria, adding that national prosperity was tied to development of the oil and gas industry.
Ogue argued that Nigeria should be projected in a positive manner while investment atmosphere should be created to woe investors.
Dr Bolaji Ogundare, Group Executive Director, Pan Ocean Oil Corporation Nigeria Ltd., called for appropriate government structure, regulatory framework and establishment of energy transition bank to bridge the gap in the sector. (NAN)
