How ongoing refineries rehabilitation will expand Nigeria’s crude oil market — NPDC MD
Nigeria Petroleum Development Company (NPDC) Ltd. Managing Director Ali-Muhammad Zarah has explained how the ongoing rehabilitation of NNPC refineries (which has served as a conduit in the past) and completion of private refineries like Dangote refinery would shore up Nigeria’s position as a refining and petrochemicals hub.
The NPDC Managing Director said this at the ongoing 5th Nigeria International Energy Summit (NIES 2022) with the theme, ‘Revitalising the Industry: Future Fuels and Energy Transition”, in Abuja on Thursday, February 3.
The NPDC MD, who spoke at a session, tagged “Upstream Forum” was represented by Mr Adeyinka Adeyemo, Executive Director, Planning and Commercial, NPDC.
“As Energy transition reshapes the crude oil market, a plethora of opportunities opens in refining, petrochemicals and gas based industries.
“The domestic crude oil market will expand,” the NPDC MD said.
He said the focus of the upstream forum on “Opportunities and Challenges for Crude Oil Markets in a Time of Transition” was apt in view of global current demand for duality of increased availability of affordable energy and reduction in carbon footprint.
Zarah said the top crude-oil producing countries, of which Nigeria was one, were having to quickly learn how to balance short term economic objectives with the long-term business sustainability of the industry.
The MD noted that it could be argued that the burden for decarbonisation has been disproportionately laid at the foot of the oil and gas industry, adding that the sentiments may not go away despite the world’s increasing appetite for energy.
According to Zarah, this is reinforced by the OPEC forecast that global oil demand is expected to grow from 96.6 mm b/d barrels per day to 104 mm b/d in 2040.
According to OPEC, natural gas will take a more central position in the world’s energy mix, about 25 per cent in the most optimistic energy transition scenario.
“The majority of this new demand will come from developing countries, increasing by almost 24 mb/d, to reach 67 mb/d by 2040.
“But much of the demand will still be from the developed world. This implies that there is no expectation for a peak in oil demand over the forecast period to 2040.
“Global oil consumption will exceed 100mb/d, even much earlier than projected years ago,” he said.
The NPDC boss further noted that other sources of fuel will continue to gain share in the energy mix but the oil industry must not shy away from the challenge of building a less carbon intensive world and play a pivotal role towards these goals.
He said Nigeria possesses the resources and expertise that could be used in developing more efficient technologies in exploration, production and processing.
According to him, it could be achieved through ensuring the widespread adoption of carbon capture and sequestration technologies, blue hydrogen and other frontier technologies with huge potentials.
Zarah stated that in Nigeria, the biggest contribution to the energy transition would be in gas development which was more than just a ‘transition fuel’.
He added that this was identified by Nigerian government through bold steps taken with the ‘Decade of Gas’, Autogas and Gas Flaring Commercialisation Programme and the sanctioning of NLNG Train 7.
These initiatives, he said, were expected to contribute massively to achievement of sustainable economic development while helping Nigeria meet her Nationally Determined Contributions to carbon reduction targets.
“Already Nigeria has witnessed a geometric increase in urea and ammonia production capacity in the last decade, with even more Final Investment Decisions to be taken in the nearest future.
“Refinery capacity might be shrinking in some countries but in the Global South, it will be expanding, altering the flow of crude oil as we have always known it.
“To meet the future challenges around energy transition, we need dialogues and feedback in a diverse and inclusive fashion while the NPDC will continue to pursue targets set by NNPC Limited on transparency, cost efficiency and corporate social responsibility,” he noted.
Dr. James Edet, President of theNigerian Association of Petroleum Explorationists (NAPE), while speaking, called for more modular refineries for more foreign exchange, especially at huge market in Sub-Saharan Africa.
Dr. Edet also appealed for the establishment of Energy Bank to fund projects towards energy transition.