…Urges Nigeria to harness crude oil reserves for socio-economic growth

Oando Energy Resources has said that with widespread poverty, Africa cannot afford a quick transition to renewable energy, stressing that Nigeria should vigorously harness its vast crude oil reserves to drive socio-economic growth and industrialisation, despite the global shift towards cleaner energy.

The company also highlights the importance of leveraging the country’s substantial natural gas reserves, estimated in hundreds of trillion cubic feet, to foster sustainable development.

The Executive Director of Oando Plc and COO of Oando Energy Resources, Dr. Ainojie Irune made this call to action during a panel discussion at the recent Nigerian Oil and Gas (NOG) Energy Week 2024 in Abuja.

Sharing his thoughts on the topic: “Navigating a Sustainable Future for Independent Producers,” Irune cautioned African countries against a hasty shift towards the 30-year Sustainable Development Goal (SDG) 7 vision.

He therefore described Africa’s hasty shift towards green energy, as a disingenuous approach, arguing that Africa, with its abundant energy resources but with widespread poverty, cannot afford a hasty transition to renewable energy.

“We have always felt it was too soon for us as Africans with huge amounts of energy resources, but we exist in deep poverty.

“We can’t transition ourselves to further poverty. We were asked to march on to a 30-year Sustainable Development Goal (SDG) 7 vision aimed at achieving universal access to modern energy services by 2030 and reducing greenhouse gas emissions.

“We committed ourselves to the vision of turning all of our energy resources to renewable energy, unfortunately, we have no business latching on to that dream,” he said.

Irune, who is also the President and Chief Executive Officer of Oando Clean Energy Limited emphasised the relevance of a balanced energy mix, noting that oil and gas would still play significant roles in the future.

According to him, “At Oando, we no longer feel pressured by the energy transition push; instead, we see an acceleration in our crude oil extraction.

“Therefore, African countries need to extract every molecule of crude oil from beneath the earth’s surface and use natural gas to champion the continent towards sustainable development.”

Highlighting Oando Plc’s commitment to supporting the African economy through renewable energy projects, Irune said, “While extracting oil, we can harness solar, wind, geothermal, and hydro in ways that support our economy,”

He mentioned that Oando’s Clean Energy Division is engaged in several projects, including transportation, solar energy, waste-to-value, wind, and geothermal energy in collaboration with the Nigerian National Petroleum Company Limited (NNPC).

He explained that his organisation has made significant progress in projects in the transport sector due to Africa’s logistics-based economy.

“We are also involved in solar energy, waste-to-value projects, wind, and geothermal energy.

“One of our advanced projects is the electric vehicle initiative with the Lagos state government, where we are moving to deploy 100 buses after completing the pilot phase,” he added.

Continuing, Irune underscored the importance of ecosystem development, local capacity building, and knowledge transfer.

“We believe in contributing to ecosystem development, learning, and local capacity building.

“It’s essential to build a base that allows us to explore our oil and deploy capital to increase the size of these projects in a manageable way,” he said.

Also, the Director, Deepwater and Production Sharing Contract (PSCs) at Chevron Nigeria and Mid-Africa Business, Michelle Pflueger, has called for genuine stakeholder collaboration in the Nigerian oil and gas industry to enable the growth of the sector.

Pflueger, who spoke at another panel at the NOG Energy Week, said partnership was required to harness Nigeria’s abundant oil and gas reserves, the country’s human capital and the investments for the benefit of the country, the operators and every stakeholder in the industry.

“There are the reserves, there are the people, I believe there are the investments, that’s why we are here. We have people willing to invest money in technology, into solving these challenges.

“I believe it’s a partnership. I don’t think anyone’s company, I don’t think the federal government alone can build the energy security that this country needs.

“I think it requires a culture of true collaboration where we are all in it for the growth because there are too many barriers to growth and each of us is going to bring a different piece,” she stated.

She said the Nigerian oil and gas industry was in dire need of stability and security, competent workforce from the communities, business partners that  bring in the technology as well as the goods and services.

She added that, “We need both the independent producers and the IOCs to come together to talk of some of the challenges that come across the whole portfolio, from deepwater to near-shore to the energy transition.”

Pflueger maintained, “And I think we all want to make money, we all need to come together to truly collaborate, and if that happens, I believe we can make the pie bigger. I think a lot of us have started looking for their piece of the pie.

“We are all going to make money. Like I said, we all like to do well in our returns on our investments. But I think there is another view of that where we can actually make the pie bigger, so that there is more for everybody, more for all of the companies. And I think that has to come from a true spirit of collaboration.”

Group Managing Director (GMD), Techno Oil Limited, Mrs Nkechi Obi, has urged  the Federal Government of Nigeria to reverse its policies on the importation of Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) cylinders.

Obi made her appeal known during a panel session at the 2024 Nigeria Oil and Gas (NOG) conference in Abuja.

Techno Oil, her company is one of the leading operators in the LPG market in Africa boasting of 5 Million Annual Capacity LPG Cylinder Manufacturing Plant, 8400MT LPG storage Terminal and a 1000MT LPG Bottling Plant.

Speaking at the just concluded NOG, Obi pleaded with the government to reverse the zero import duties placed on the importation of LPG cylinders and restore the initial 40 per cent import duties, to discourage importation.

“We need policy reversal on that to encourage local producers. The unofficial explanation we are getting from some customs officers is that the Compressed Natural Gas (CNG) which the government wants to encourage its usage in Nigeria, has the same Harmonised System (HS) code with LPG.

“So, the import benefits placed on CNG equipment eventually affected LPG equipment; that is why they were tied together on the zero import duties.

“Harmonised System codes are commonly used throughout the import and export process for the classification of goods.

“For me, we don’t produce CNG cylinders in Nigeria because it involves advanced technology but we produce LPG cylinders here.

“For us to produce CNG cylinders, we have to change one or two machines, and we expect the government to encourage us to upscale our technology to 32, which we are planning to do,” she lamented.

Obi also called on the Federal Government to separate LPG HS code from that of CNG, to ensure that importers of LPG pay higher import duties, and to also enable the government to continue with its efforts to make CNG affordable in the country with zero import duties.

“The previous government protected those producing cylinders, so that import will not overshadow local production; they did that to encourage local manufacturing but when this government came into existence, policy changed.

“We only enjoyed that policy for six months before it was scrapped and replaced with the new ‘zero import duties’ policy.

“Definitely, we have to produce CNG cylinders and the government needs to consider those that will go into that production. But if government policy is killing LPG cylinder production that we are doing, it will be very difficult to enter into CNG cylinder production.

“So, if there is anybody who can venture into CNG cylinder production, we the producers of LPG cylinders are here to do that and it is in our plan.

“But we are not encouraged to do it because of what happened to us in the LPG cylinder production because of the frustrating policy that is encouraging its importation,” Obi added.

The Independent Petroleum Producers Group (IPPG) has applauded the Federal Government of Nigeria for wining the bid to host the Headquarters of the African Energy Bank (AEB).

In a statement signed by its Chairman, Abdulrazaq Isa, the IPPG noted that this highlights Nigeria’s leadership and strong commitment to advancing Africa’s energy goals.

It said further that, “this landmark achievement also underscores Nigeria’s leading role over the years in fostering regional integration and progress. Not only is this decision to host the Headquarters of the AEB in the country a further acknowledgement of Nigeria’s position as the continent’s leading hydrocarbon resource holder and human capital base in the energy sector, but also demonstrates the robustness and highly advanced nature of the country’s financial services sector.”

“The AEB will provide a solid foundation for financing and advancing energy projects across the continent, enabling the development of critical infrastructure and innovative technologies in the energy sector. This initiative will not only promote sustainability but also drive economic growth and industrialisation, creating massive job opportunities and ultimately contributing to a prosperous and sustainable future for the entire continent.”

“IPPG’ strong advocacy for the siting of the Headquarters of the Bank in Nigeria was premised on the immeasurable benefits it would bring to the development of the oil and gas industry and ultimately the Nigerian economy particularly at a time when the nation is grappling with an energy crisis. We therefore commend President Bola Ahmed Tinubu, GCFR, for his visionary leadership and dedication to the development of Nigeria’s energy sector. His administration’s proactive and strategic efforts have played a crucial role in securing this notable achievement.”

“Special recognition also goes to Senator Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil); who passionately and vigorously championed the realisation of this significant milestone. His relentless commitment in ensuring Nigeria hosted the AEB’s Headquarter has simply been extraordinary.”

“We equally acknowledge the efforts of the entire Government, its agencies in the energy sector and all stakeholders whose collective hard work and dedication have made this remarkable victory possible.”

The Group further noted that the achievement is not just a victory for Nigerians but for the entire African continent.

“It symbolises our collective efforts to build a prosperous and sustainable energy future for Africa. This will enable the continent look inward and deepen collaboration in charting a course for meeting its energy needs.”

“IPPG is extremely delighted by this news and looks forward to partnering with the AEB in ensuring affordable energy, enhancing energy security and lowering the continent’s carbon footprint.” Isa said.