The Organisation of the Petroleum Exporting Countries (OPEC) has tasked the Federal Government to develop new technologies, strengthen human capacity and innovation to meet the world’s growing need for energy.
OPEC said regular investment was needed in view of global oil sector requirement of cumulative investments of 11.8 trillion U.S. dollars in the upstream, midstream and downstream through to 2045 to meet energy expectations.
Dr Mohammad Barkindo, OPEC Secretary-General, made this known in his keynote address at the official opening of the ongoing 21st NOG Conference and Exhibition on Tuesday in Abuja.
The conference has its theme as: “Funding the Nigerian Energy Mix for Sustainable Economic Growth.”
Barkindo said that new technologies and regular investments would shrink Nigeria’s overall environmental footprint and expand access to underserved communities.
“I am confident that the implementation of the Petroleum Industry Act will help unlock the full potential of our petroleum industry, strengthen its ability to attract long-term investment, as well as support a dynamic and diverse economy.
“If our National Oil Companies (NOCs) are to continue to innovate and flourish, it is of utmost importance that they have predictable and unfettered access to investment capital.
“Regular Investment at adequate levels is the lifeblood of our industry. It is essential if we are to develop new technologies, strengthen our human capacity and remain leaders in innovation,” he said.
The OPEC secretary-general said the industry was facing huge challenges along multiple fronts and these are currently threatening investment potential and in the longer term.
“To put it bluntly, the oil and gas industry is under siege!
“For starters, the evolving geopolitical developments in Eastern Europe, the ongoing war in Ukraine, the ongoing COVID-19 pandemic and inflationary pressures globally have come together, causing significant volatility and uncertainty in the commodity and energy markets.
“Against this backdrop, a number of industrialised countries and multilateral institutions continue to pursue stringent policies aimed at accelerating the energy transition and fundamentally altering the energy mix,” Barkindo said.
He said in a very short timespan, the industry had been hit by two major cycles – the severe market downturn in 2015 and 2016, and the even more far-reaching impact of the COVID-19 pandemic.
He described 2020, the first year of the pandemic as one of the darkest periods in the history of oil, upstream oil capital expenditure which fell by around 30 per cent.
This, he said exceeded the colossal 26 per cent annual declines experienced during the severe industry downturn in 2015 and 2016.
He said the OPEC also projected that total primary energy demand would expand by a robust 28 per cent in the period to 2045.
According to him, oil is expected to retain the largest share of the energy mix, accounting for just over a 28 per cent share in 2045, followed by gas at around 24 per cent.
In other words, he said oil and gas together would continue to supply more than half of the world’s energy needs for many decades.
“These hydrocarbons are especially vital to the energy mix in regions like Africa, which will see massive population shifts and economic growth in the coming years.
“These developments increase the urgency of eradicating energy poverty.
The impacts of the two major market cycles are manifesting themselves in real time,” he said.