By Ndubuisi Micheal Obineme
The NOG Energy Week 2023 kicked off in Abuja, attracting industry stakeholders, players, government agencies, experts, and companies, to deliberate on strategies aimed at redefining Nigeria’s Energy landscape and ensuring its sustainability.
The event, which brings together participants from the global energy sector, was held in Abuja from July 9-13, featuring keynote presentations from industry stakeholders and players in the industry, including roundtable discussions, and technical sessions.
The NOG Energy Week seeks to establish and enhance collaborations that would help navigate Nigeria’s energy pathways for a robust, sustainable tomorrow. The NOG Energy Week began with a golf tourney in Abuja on Sunday 9th July 2023.
Nigerian Content Seminar
The NOG conference started on Monday 10th July 2023 with the NCDMB’s Nigerian Content Seminar. The Nigerian Content Seminar is an integral part of the NOG Strategic Conference.
The Seminar is organized in collaboration with the Nigerian Content Development and Monitoring Board (NCDMB), creating an avenue for industry players to have a deeper understanding of the Nigerian Oil and Gas Industry Content Development Act (NOGIC Act) and its accompanying opportunities.
The NOGIC Act is a vital instrument that empowers Nigerian Companies to contribute tremendously towards the development of the Nigerian economy by encouraging value addition, job opportunities, and the award of different oil contracts and undertakings.
In his opening address at the NOG Nigerian Content Seminar, Engr. Simbi Kesiye Wabote (FNSE, FIPS) Executive Secretary of NCDMB said: “The Seminar continues to serve as an excellent platform to provide clarity, expositions, tips, and guidance to industry practitioners on the provisions of the NOGICD Act (2010)”.
Engr. Simbi also added that in the last five (5) years of implementation of the Strategic Roadmap, the Board has more than doubled the level of Nigerian Content in the industry by moving the needle from 26% in 2017 to 54% in 2022.
Energy Security
As Nigeria progresses in its energy transition journey, regulatory heads also noted that achieving energy sufficiency hinges on some key factors such as funding, infrastructure, stability, and other incentives to drive the inflow of investors. This was pointed out by heads of regulatory agencies in the oil and gas sectors during a plenary session at the 2023 NOG energy week conference in Abuja.
Gbenga Komolafe, the chief executive of the Nigerian Upstream Regulatory Commission (NUPRC), said Nigeria will have to leverage its capacity in meeting up with the challenges of the competition, especially as a very mature country in terms of oil production and exploration however there is need to provide more incentives to investors.
He said regulators are also business enablers, leveraging regulations to create an enabling environment in Nigeria that will make it a more favorable destination for investment adding that one of the things that attracts investors is regulatory certainty and money will naturally gravitate to where there’s regulatory certainty.
“We are creating regulatory incentives that make issuances quicker in a manner that will shorten turnaround time and that will impact favorably on the unit cost of production because businesses are looked at based on profitability,” he said
Gas Development
The Group Chief Executive Officer (GCEO), of Nigerian National Petroleum Company Limited (NNPCL), Mallam Mele Kyari, said in delivering his keynote address on ‘Redefining Nigeria’s Energy Landscape for a Sustainable Energy Future’ at NOG Energy Week, that affordability, accessibility, and sustainability are the drivers of Nigeria’s energy future.
Key initiatives on the horizon include expanding gas infrastructure to deliver gas across West Africa and potentially, Europe, expansion of liquefaction capacity of NLNG, and enabling the availability of LPG as a cooking fuel and CNG as alternative fuel for automobiles.
Reaffirming Nigeria’s status as a gas nation with associated oil, Kyari reiterated the need to bridge the skilled manpower gap, ensure asset security, and invest in infrastructure to transform challenges into opportunities. For the GCEO, Strategic decisions like subsidy removal have already paved the way for positive change in the sector, while freeing up capital for powering the sustainable supply of energy.
Commenting on ‘Accelerating Gas Development for Nigeria’s Energy Transition Journey’ in a panel discussion, Executive Vice President for Gas, Power & New Energies, Mohammed A. Ahmed, talked about NNPC Limited’s dedication to facilitating gas development in Nigeria’s energy transition.
He spotlighted NNPC’s ongoing infrastructure projects, including the Obiafu-Obrikom-Oben (OB3) and Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Projects, and their overarching goals of tackling energy poverty and improving nationwide gas access.
On Pipeline security, Ahmed lauded the ongoing efforts to counter vandalism, enhance project security and investor trust. He noted that gas is not only vital for Nigeria’s energy transition but also key to fostering industrial advancement and employment.
Speaking further in a panel discussion at NOG Energy Week, Simbi Wabote, Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB) said Nigeria’s resource endowment in terms of gas reserves positions it among the top ten economies globally but this does not translate to wealth or prosperity because there is a huge gap between resource endowment and its off-take as a country.
He highlighted the technology gap as a huge challenge because it affects competitiveness, adding that priority should be given to concerns as to how the country’s technology environment can be developed and also see how gas processing plants, gas processing units, and refining units can be fabricated and constructed locally.
“If you want to achieve energy security and attract investors, research and development centers must ensure that they have those capabilities to carry out research in most of these units,” he said.
Wabote who was represented by Abdulmalik Halilu. General Manager, Research Statistics & Development NCDMB added that the ability of investors to easily access funding is important hence there has to be a simplified process to access the funds.
“Most of the investments needed are very pricey, so you have to ensure that there is access to cheap capital and this is important especially where investors have to rely on financial institutions that charge double digits,” he said.
Capacity Building
In terms of Capacity Building, NCDMB boss stated that Nigerian companies haven’t been able to adequately develop human capital to sustain production, even at a time that international oil companies are divesting and leaving the country.
“What worries me a lot is that the international oil companies have invested a lot in training their staff, including me. Now all of them are divesting their assets and moving offshore alongside some of their staff, but those staff are not growing younger; they are aging, and then local companies are not investing in capacity development.
“Nigerian companies must invest in building the human capacity of the young ones who can take over production. If not, production will continue to nosedive every year,” he added.
In a Technical Seminar at the NOG Energy Week, NNPC Senior Advisor, Corporate Strategy and Sustainability, Adepeju Adekunle, shared insights on how a structured approach to nurturing digital talent, promoting diversity, and creating strong partnerships can drive energy transformation.
“With about half of Nigeria’s population needing digital skills, it’s time to revolutionize our education system, curb talent migration, foster a diverse tech landscape, and promote collaboration between industry, academia, and government”.
According to Adepeju, “The future of Nigeria’s sustainable energy lies in leveraging digital transformation, agile project management, smart infrastructure, and homegrown technical expertise. With the potential for about 46% of work activities, automated, nurturing a digital talent pipeline is key to managing change and securing Nigeria’s energy future”.
Funding
Nigeria’s oil and gas industry experienced historic crises throughout 2022 as the sector struggled with severe crude thefts and pipeline vandalism constraining output. However, the resumption of operations at onshore export drilling activity has turned the outlook positive for 2023, according to a new report published by investment research firm Hawilti.
Based on our findings, there have been a recovery in Nigeria’s upstream sector and a positive outlook coming from deepwater projects with the hope of seeing FIDs signed this year on some of those projects such as the Bonga North by Shell on OML 118 (150,000 boepd peak), among others.
At the NOG Energy Week, Executive Vice President, Upstream, Engr. Adokiye Tombomieye, represented by Olanrewaju Igandan, Upstream Business Advisor, laid out an insightful roadmap for the future of Nigeria’s Upstream Sector, addressing the complex balance of hydrocarbon monetization, sustainable growth, and socioeconomic development.
Tombomieye revealed Nigeria’s extensive reserves, with proven crude oil and condensate reserves of 36.966 billion barrels and 208.83 Trillion cubic feet of natural gas. In support of exploration efforts to attain the national aspiration of 40 billion barrels of crude oil reserves by 2030, NNPC Limited has been active within the inland basin and has partnered with TotalEnergies for the discovery of the Ntokon field in OML102.
Recognizing the need for a conducive investment climate, the EVP highlighted the pivotal role of the Petroleum Industry Act (PIA) in creating a transparent, accountable, and efficient sector. He emphasized that the separation of regulatory and commercial functions under NNPC Limited would create a level playing field for investors, thereby fostering a more attractive local and foreign investment environment.
Additionally, he addressed the need for enhanced security, asset integrity, digital oilfield technology, and the adoption of Carbon Capture, Utilization, and Storage (CCUS) technologies, in line with global demands for cleaner energy sources.
Looking to the future, Tombomieye underscored the necessity for a dual strategy that balances Nigeria’s urgent socioeconomic needs with global sustainability goals. He championed the maximization of hydrocarbon reserves monetization, utilizing the revenue generated to invest in key sectors such as education, healthcare, and infrastructure development, whilst proactively pursuing the development of renewable energy sources.
With strengthened collaborations, robust regulatory frameworks, and a focus on innovation and technology, Tombomieye expressed confidence in a future where the upstream sector becomes a beacon of progress, driving economic growth, and improving the lives of all Nigerians.
On his part, the Chief Executive Officer, of Seplat Energy Plc, Mr. Roger Brown stated that Attracting the necessary funding will be dependent on regulatory reforms, fiscal terms restructuring, and several other relevant policies.
Adding to this, Brown explained that there is a severe need for funding in the upstream and midstream segment of the energy sector in Nigeria, and relevant success stories from the country will facilitate these investments.
The Seplat Energy CEO disclosed this at the 2023 NOG Energy Week, where he featured on a panel session themed, ‘The Investors Perspective: Assessing the Attractiveness of Nigeria’s Energy Sector.
Brown explained: “Nigeria needs more success stories to attract more investments to the upstream sector. We need to solve the insecurity dilemma around the country’s pipeline infrastructure, enforce clarity and separation of powers among regulatory authorities, work closer with field operators to resolve host community issues, and amend fiscal terms of PSCs/PSAs to include more incentives for asset partners.
“We also need to improve fiscal terms on gas contracts to support uptake at market reflective prices and improve efficiency and capacity of the Nigerian electricity value chain to aid higher uptake of domestic gas supply.”
Whilst also speaking on the things investors look out for in Nigerian companies in the quest for gas development in the country, Brown said financially strong companies with a robust balance sheet, low debt, and credible access to international capital markets have an edge.
“Other factors are stock market listing and the associated need for governance, with a preference for dual-listed companies such as Seplat, where equity can be traded in liquid markets; international accountability and transparency in reporting, particularly as it relates to ESG reporting, with good commitment to sustainability and good relationships in-country with government, regulators, and local communities.”
According to him, Seplat Energy remains commitment creating and sustaining value in the Nigerian upstream sector and has continued to do via a strong investment work plan, host community development, partnerships with government, and aggressive human capital development.
Contributing in an IOCs panel Discussion titled, “Defining the Roadmap for the Future of Nigeria’s Upstream Sector”, the Managing Director of TotalEnergies EP Nigeria Limited, Mr. Mike Sangster, called for the creation of attractive fiscal terms and an enabling environment to enable the operators to undertake big projects and deliver value to the country.
Represented by the Country Adviser, Multi Energies, TotalEnergies, Mr. Adewale Fayemi said creating the right investment environment was crucial in developing new projects.
“There has to be the right incentives in place. But I think the discussion is on. But without having the incentives in place, it’s going to be difficult for investors to say yes, we’re bringing these projects online,” he said.
Managing Director, Shell Nigeria Petroleum Company (SNEPC), Mrs Elohor Aiboni, stressed the need to review the fiscal terms in the industry in order to boost investors confidence.
Noting that capital was sensitive, she noted that it goes where investment climate supports it.
“There are factors that will drive those projects and first is around the fiscals which is very critical. So, there must be right and clear fiscal terms to support the execution of the projects,” she stated.
Also at the conference, chief executives of the International oil companies (IOCs) from TotalEnergies EP Nigeria Limited, Shell, ExxonMobil and Chevron raised concerns on the high investment risks in the industry and called for fiscal incentives and an enabling environment for their operations.
The 2023 edition of NOG Energy Week served as a vital platform for global businesses to access the Nigerian oil & gas industry, to showcase industry excellence, gain insights into the latest regulatory and policy frameworks, and forge new partnerships and cooperation in the heart of Africa’s largest oil & gas producer.
As the industry looks to navigate the realities and achieve economic recovery, stimulate market demand, and drive new investment opportunities into Nigerian energy industry, NOG Energy Week stands as a pivotal part of the solution.