… as global demand sets to double by 2040

Despite innovations, there are indications that oil and gas would continue to dominate the global energy mix, at least in short and medium term. Consequently, many nations, including African countries have resolved to invest massively in oil and gas exploration and production, targeted at making new finds, increasing reserves and production capacity to guarantee commercial supplies to domestic and global market.
But findings showed that they has not yet started to make significant investment estimated at $10.5 trillion in order to meet rising demand between now and 2020.Take the case of Nigeria as an example. The month of March, 2018 did not get down well in oil exploration and production as rig count showed a general decline, data from the Organisation of Petroleum Exporting Countries, OPEC, showed. Specifically, Nigeria suffered a 13 percent decline having recorded 31 rig count in March as against 35 recorded in February. Nigeria led the pack of the 14 OPEC, members, followed by Saudi Arabia, which had a 2.8 percent decline having recorded 144 in March as against 148 recorded in the previous month. Venezuela came third with a minus three decline. The country had 86 in March as against 89 the previous month, while Angola had minus one. It recorded three rig count in March as against four recorded in February. Seven OPEC members had zero rig count within the period under review. They include; United Arab Emirate (UAE), Qatar, Libya, Kuwait, Equatorial Guinea, Gabon and Iran, which had 53, 9, 1, 54, 1, 3 and 61 rig count respectively. Cumulative OPEC rig count showed minus six, having recorded 569 in March as against 575 in February. Going by regional rig count, the Organisation for Economic Co-operation and Development, OECD Americas had minus 83, having recorded 1,227 rig count in March as against 1,310 in February. Other Asia and Latin America had minus seven each. While Asia had rig count of 187 in March, as against 194 in February, Latin America had 77 and 84, respectively, within the period under review. However, Middle East recorded plus four, as it had 77 and 73, respectively, within the period under review. It is not alone. Africa also has plus two, having recorded 17 in March, as against 15 in February. OECD Europe had plus five, having recorded 89 in March as against 84 in February, while OECD Asia Pacific had plus one, having recorded 17 and 16, respectively, within the period under review. Canada appeared to have recorded the least rig count. It had minus 105, as its March rig count was 218 as against 323 in February. United States of America, USA, had an impressive plus 20. It had 988 and 968, respectively, within the period under review. Investment gap Minister of State Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, disclosed that Nigeria that needs to invest $100 billion in the industry only attracted $40 billion in the past two years. “$40 billion is not enough to drive this industry. Our estimate is that we need about $100 billion in investments to propel this sector. Those investments will go into gas projects, into the pipelines that have to be replaced; they will go into new plants and into the flare policy of the federal government. “A huge amount of investments needs to go into the downstream sector in terms of the refineries, so that we can avoid the embarrassments we see daily in terms of the supply mix. This is in addition to the development of LPG, LNG and CNG assembly plants, as prevailing realities show that we will need to begin to convert our cars from petrol consumption cars to gas and electricity driven cars fairly quickly.” He stated that: “Given that the cardinal focus of President Muhammadu Buhari’s administration is anti-corruption, we must give serious attention to the issue of transparency. We need to look at our processes, contractual terms, review our patronage culture and diversify the opportunities available to ensure more people are admitted into the player mix. When we are transparent, investors get the confidence to come in droves. “One of the things that will happen as we look at new policies is how to incentivise those who have the least cost of production, and discourage those who want to continue to run a high cost profile. In an era in which OPEC quotas are going to remain in place over the next two years, we will get to a point where those who give us the least cost oil get the first preference in terms of the barrels that we have to put up for the market.’’ Problems The reasons are not farfetched. In an interview with Sweetcrude, Mazi Bank-Anthony Okoroafor, President, Petroleum Technology Association of Nigeria, PETAN disclosed that: ‘’The last two years have been challenging for the oil and gas industry. We have seen the price of crude oil crash. ‘’Within the two years, we have seen projects deferred and cancelled. We have witnessed slow oil and gas activities. We have also seen banks afraid of lending money to sector players.’’ Clean fuels In his recent keynote address, HE Mohammad Sanusi Barkindo, OPEC Secretary General advised Nigeria and other OPEC nations to increase investment in oil and gas, adding that: ‘’the global economy is estimated to more than double by 2040. And over the same timeframe, world population is projected to reach around 9.2 billion, an increase of around 1.8 billion. ‘’We should also not forget that today around 3 billion do not have clean fuels for cooking, and 1.1 billion have no access to electricity, something that we take for granted. When we start up our cars, switch on a light, turn on our mobile phones, we need to recognise that these everyday things are still unknown to billions of people across the world who continue to suffer from energy poverty.  It is a universal obligation to address this major challenge.

Read more at: https://www.vanguardngr.com/2018/05/nigeria-opec-nations-gasp-technology-investment-oil-gas/

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