As world attention drifts towards cleaner energy sources, former managing director of Shell Petroleum Development Company (SPDC), now chairman, Shell Companies in Nigeria, Osagie Okunbor, has urged Nigeria and other crude oil producing countries not to be in a hurry to discard crude oil.
Okunbor told top industry players and regulators who converged in Abuja that fossil fuel is still a needed product: “We do need crude oil,” he stated.
Okunbor spoke as an expert and resource panellist Tuesday, April 18, 2023, at the Nigeria International Energy Summit (NIES) ongoing at the International Conference Centre (ICC) in Abuja.
He spoke at the CEO Roundtable of NIES focussing on: ‘Building Energy for Tomorrow’.
The former MD said the energy sector is often affected by unforeseen emergencies and urged policy makers to consider all energy sources and not discard any.
He pointed at the war in Ukraine which he said has forced western countries back to crude oil and even coal.
He advised that attention should be devoted to all energy sources saying Nigeria was abundantly blessed with all- crude oil, gas, solar, wind, or hydro.
He reminded about Nigeria’s gas reserve of over 600 bcfg, urging that this resource be deployed in funding the energy transition.
Okunbor began by pointing at Nigeria’s burgeoning youth population rated at 65 per cent, describing it as both, a big opportunity or a big threat.
He advised that job creation should be the focus of the new energy policy, stressing that Nigeria must consider job creation in every singular policy to be placed on the table.
He said: “Let’s use all because Nigeria is rich in each of them. Gas is a transition fuel.”
On present challenges in the sector, the chairman of SCiN said the shutdown of the trans-national pipelines (TNP) for one full year has grossly impacted the economy especially, the energy sector.
In trying to reactivate and reopen the TNP, he said, over 460 illegal connection points were scraped.
He confirmed that Shell Nigeria has just lifted the force majeure that was imposed in the heat of the pipeline vandalism. “This affected supply of gas to the NLNG.”
On this score, the industry expert advised the new administration to regard fight against oil theft as number one on the agenda so export of crude can be guaranteed.
The next challenge Okunbor stressed is attracting investment capital back to the sector. “If our projects are not attractive, it means they are not free from impediments.”
Also, heavy debts to the IOCs was identified as a challenge as he disclosed that Shell is owed $200m with another IOC next on the line.
“We are still chasing these debts. The Petroleum Industry Act has since been enacted, I congratulate Nigeria. Attracting investment capital is the next challenge. This is what stares the incoming administration in the face at the moment.”
Responding to questions, Okunbor said all industry players should know they all are in same boat. He mentioned the problems as insecurity, availability of capital, environmental sustainability, etc.
He stated: “Shell is big in deep water, also plays deep in the new energy space through All On,” which he said has $200m ceded to it.
“All On is punching above it’s weight”.
He also said Shell has acquired an international energy company (Dayster Energy) which is being scaled up.
According to Okunbor, while Shell is playing in all traditional areas, the oil giant is also playing big in gas, and discussing with other groups such as the NLNG, NCDMB, NNPC, etc. on how to get it right.
The chairman of SCiN said the IOC’sworst fear is how to deliver seven big ticket projects ongoing in Nigeria despite the numerous challenges.
The summit ended Friday, April 20,2023.
