Mr Victor Okoronkwo, Group Managing Director, Aiteo Exploration and Production stated that Nigeria is heavily reliant on foreign funding for oil and gas exploration and production.
He disclosed this at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, the United States, in a panel themed “Energy Transition and the Future of Africa”, moderated by Vice Chairman of Platform Petroleum, Mr Austin Avuru.
He also stated that the Paris Agreement on climate change has left Nigeria with increasing difficulties in raising funding for exploration coupled with the fact that IOCs are divesting from Nigerian explorations.
What they are saying
Okoronkwo stated that Nigeria and most African countries lack the strategy to generate the energy needed in the face of reduced funding for fossil fuel-related projects by foreign financial institutions.
He said that over 90 per cent of the funds used for oil and gas exploration as well as production come from abroad. He added that the Paris Agreement on climate change had put Nigeria and the rest of the world in a dilemma in terms of where to raise funds from.
He warned that compared with the United States, where the Government subsidizes renewable energy projects, African governments do not have the resources to boost gas production and transition to solar and wind energy
The Moderator of the session, Mr Austin Avuru, said that Nigeria’s oil and gas sector was able to get funding in the past because Nigeria provided “energy security for the geographies that provided the funding.”
“Now that they have said they will no longer provide funding for fossil fuel projects, where do we turn to?,” Avuru added
He said that the industry is presently asking “where will the funding for gas production come from, let alone talking about funding for cleaner energy?”, citing that forecasts for the industry predict by 2040, Africa’s crude oil production “would not be capable of meeting its oil demand.”
He emphasised that solutions need to be implemented by Africa’s leaders.
In case you missed it
- Nairametrics reported last month that French energy giant, TotalEnergies attributed its plans to join the bandwagon of other oil majors and sell its stake in an onshore oil production joint venture in Nigeria to the disruption of local communities which has become a source of great concern.
- The French oil firm will put up for sale its 10% interest in a company operating 20 licenses onshore Nigeria.
- The licenses are being operated by another supermajor, Shell, which is also looking to divest its Nigerian assets as it has been reported that it was already considering bids from 4 indigenous oil firms for its 30% shareholding of the joint venture.
