President Muhammadu Buhari, who is also the Minister of Petroleum Resources and his subordinate, the Minister of State, Chief Timipre Sylva, used the opportunity of the 77th United Nations General Assembly (UNGA) in New York to sell the energy programme of the Federal Government. SUCCESS NWOGU writes
The revelation by President Muhammadu Buhari that crude oil and other petroleum products primarily accounted for Nigeria’s over $1.69 billion worth of goods exports to the United States in 2020 reinforced the strategic revenue-generating propensity of Nigeria’s oil and gas sub-sector.
President Buhari made the revelation at a meeting with the Business Council for International Understanding (BCIU) at the Nigeria International Economic Partnership Forum, held on the sidelines of the 77th United Nations General Assembly (UNGA) in New York.
The president also during his farewell speech to UNGA, according to his Special Adviser on Media and Publicity, Femi Adesina, lamented the negative impacts of the climate crisis and the related energy challenge. He said Nigeria was desirous that UNGA 77 and the upcoming COP 27 were fora to help galvanise the political will required to drive action towards the fulfilment of the various existing climate change initiatives.
Buhari said: “This is the concern that Africa and other developing nations, which produce only a small proportion of greenhouse gas emissions, compared to industrial economies, are the hardest hit by its consequences as seen in the sustained droughts in Somalia and floods of unprecedented severity in Pakistan.
”These and other climate-related occurrences are now sadly becoming widely commonplace in the developing world.
We are, in effect, literally paying the price for policies that others pursue. This needs to change. ”At the Cop 26 in Glasgow last year, I did say that Nigeria was not asking for permission to make the same mistakes that others have made in creating the climate emergency.
”Fortunately, we now know what we can do to mitigate the effects of the climate crisis and the related energy challenge. As a first step, we must all commit to releasing the financing and the technology to create a stable and affordable framework for the energy transition.
”Development Financial Institutions must prioritise de-risking energy projects to improve access of renewable projects to credit facilities. There should be no countries left behind in this equation. ”Rocketing energy costs worldwide are, in part, the product of conflict and supply disruptions to Europe and the Americas.”
President Buhari also called for outright debt cancellation for developing countries facing the most severe fiscal and liquidity challenges.
According to him, the multifaceted challenges facing most developing countries have placed a debilitating chokehold on their fiscal space, justifying the need to address the burden of unsustainable external debt by a global commitment to the expansion and extension of the debt service suspension Initiative as well as outright cancellation.
Commitment to renewable energy
Speaking at a climate change session at UNGA, President Buhari reassured that Nigeria was committed to a rapid transition to renewable energy.
According to him, the databacked energy transition highlights the use of renewable energy technologies to transform Nigeria into a clean energy-led economy. It would be noted that Nigeria’s energy transition plan is projected to create 340,000 jobs by 2030 and up to 840,000 jobs by 2060, driven by the transportation, clean cooking and power sectors. President Buhari said that emerging technologies, like hydrogen and bioenergy, would create pathways for low-carbon development in the country.
He said: “The clean energy goals of the plan include modernising the power sector with large-scale integration of renewable energy, enhancing energy efficiency and conservation and is expected to generate 250 gigawatts of installed energy capacity with over 90 per cent made up of renewables.”
The president also said the implementation of the energy transition plan would provide investment opportunities for Nigeria, especially in the area of natural gas for industrialisation and power supply. He also remarked on the possibilities that solar energy, e-mobility and hydrogen production could give Nigeria, going forward.
The president assured of Nigeria’s willingness to increase collaboration with BCIU, adding that his administration was committed to continue maintaining a friendly business environment for foreign investors. Buhari said: ”Nigeria’s capability is not just limited to the oil and gas industry, but a variety of other sectors that hold notable potential.
”We are the largest economy in Africa and have over 200 millionstrong consumer market that is home to a range of attractive opportunities in sectors such as agriculture, healthcare, light manufacturing, infrastructure development and technology. “The beauty of this forum is that the ministers responsible for all of these sectors are here today, as are some of Nigeria’s premier business leaders who are already excelling in these spaces.
”Going into partnerships with trusted local and foreign partners who have well-established networks and understand the dynamics of the country is one way to guarantee success in Nigeria.
”Today’s event provides a platform for businesses under the BCIU umbrella to make connections with credible Nigerian partners. I trust that this event will help build partnerships that will translate into increased trade and investment flows between Nigeria and the United States.”
Speaking on “Scaling Up International Economic Partnerships for Nigeria in a Post-Covid World,” at UNGA, Sylva assured that the Petroleum Industry Act (PIA) would provide for a 10-year tax vacation for some oil and gas investors in the industry, when fully takes off.
He stated that in the past decades, Nigeria’s oil and gas industry had serious policy, fiscal and operational challenges. According to him, the constraints led to deferment of core investments, poor infrastructure, divestments, inadequate funding, limited access to financing and operational ambiguities.
He also decried the absence of the right framework inhibited funding for project decommissioning and abandonment, including poor environmental stewardship as well as insignificant direct benefits to resource host communities. He noted that the above challenges made a reformation of the sector a priority of successive administrations.
The minister said the strong determination was imperative to reform the industry so as to build a robust, thriving and resilient economic backbone for domestic growth in the era of the global energy transition. He stated that PIA had provided a smooth fiscal framework for operators in the sector.
According to him, Nigeria is already reaping positive results from the enactment of the PIA 2021. He said that one of the benefits was that existing and potential investors now have certainty about the regulatory regime, which, he claimed, was not available in the past.
Sylva said: “The PIA 2021 has established a legal, governance, regulatory and fiscal framework for the petroleum industry, host community development and associated matters. “It provides fiscal certainty, improves regulations and incentives for investment, including up to 10- year tax vacations, while guaranteeing better take for both government and private investors, thereby balancing rewards with risk.”
He added: “This has helped to clear one of the major challenges that held back the sanctioning of new projects. “The Federal Government has taken the necessary steps to sustainably implement and operationalise the PIA 2021 within the timelines stipulated in the Act.
“To this end, government has inaugurated the steering committee, which I chair and is responsible for PIA implementation immediately after the PIA was signed into law. “The law will also aid our energy transition plan through efforts to focus on natural gas, a much less CO2 emitting energy source, to power the country’s energy sufficiency. “Natural gas remains our transition fuel, a viable and sustainable pathway to a clean energy transition, as it provides the energy needed for our growing population in terms of power generation, transport, feedstock for industries and clean cooking solutions.
“Our reforms focus encompass energy security, economic competitiveness and a reduction of greenhouse gas emissions.
Our abundant natural gas can conveniently meet all three priorities simultaneously. “With over 200 Trillion Cubic Feet (TCF) of the proven gas reserve and a potential upside of up to 600TCF, the most extensive in Africa, and among the top 10 globally, natural gas will be a major component of our energy mix for the foreseeable future.”
Domestic utilisation of gas The Minister said the Federal Government was committed to ensuring that escalation of domestic utilisation of gas in the country. According to him, to achieve this, the Ministry of Petroleum Resources has launched the National Gas Expansion Programme (NGEP) to expand Nigeria’s domestic utilisation as part of the national gas policy.
He added that it included the National Gas Flare Commercialisation Programme, as well as the elevation of LPG as the fuel of choice compared to other competing fuels. Sylva said: “With this programme, we have established a 20 million Cylinder Injection Scheme; fuve to 10 million of these are to be introduced in pilot states this year.
We have also established an LPG Energy Fund in the order of $50 million, in its first phase, in partnership with AFREXIMBANK. We have rolled out the autogas scheme with the aim of displacing PMS with CNG and LPG. “Nigeria has already embarked on an aggressive implementation of the nationwide gas infrastructure blueprint, constructing critical integrated gas pipeline system, including the AKK, across the nation.
“We are currently in partnership with the governments of Morocco and other West African countries, to construct a 7,000km gas pipeline to transport gas along the Atlantic coast from Nigeria to Morocco, meeting the regional gas demand with plans to extend the pipeline to Europe.
“The plan for a Trans-Sahara pipeline to Algeria through the Niger Republic and eventually to Europe, is also on the horizon. “Let me conclude by saying that the current state of global energy security affords key opportunities to develop Nigeria’s energy landscape and execute critical infrastructure projects that will position the country as a key global energy supplier.”