OILSERV Chief calls for Balance to Energy Transition Narrative
“…if you’ve to buy electric car (in Africa), you probably will end up charging it with a generator.” — Okwuosa, OILSERV
The Chairman and Group Chief Executive Officer, Oilserv Group, Engr Emeka Okwuosa, has noted the need for energy transition narrative that is fair, just and balance.
Okwuosa who stressed the need for energy security, called on Africa to strike a balance between their commitment to energy transition and addressing energy poverty to achieve development on the continent.
He stated this at the recently concluded Offshore Technology Conference (OTC), which took place in Houston, Texas, United States between Monday, May 2 and Thursday, May 5, 2022.
Speaking on a panel session at the Petroleum Technology Association of Nigeria (PETAN) organised session themed, “Energy Transition and the Future of Africa”, which was sponsored by Oilserv, he said that 9 billion people will be the statistics of global population by 2040 and they will need cleaner energy, adding that the question on energy transition is on the quality of the energy needed.
According to the Organisation of Petroleum Exporting Countries (OPEC) in its World Oil Outlook 2040 report, global population is estimated to increase from 7.3 billion in 2015 to 9.2 billion in 2040. The additional 1.8 billion people will mainly come from developing countries in Africa and Asia.
Development
Although Africa has about 125 billion barrels of oil reserves and about 600 trillion cubic feet (tcf) of proven gas reserves, these huge hydrocarbon resources have not been fully harnessed to drive the continent’s growth and development.
Over 600 million people on African continent do not have access to modern energy and by 2035, energy demand in Africa is projected to increase by 40 percent of what it is currently. This growth will be driven by industrialisation, increase in population, and expansion in economic activities.
Okwuosa maintained that Africa cannot keep running away from the fact that it needs to develop. According to him, Africa must strike a balance between development, which is driven by energy, and transitioning to net-zero; adding that without development, the continent will continue to lag behind in the scheme of things on the global stage.
He stated that the development in the world today was driven by energy, particularly fossil fuel, noting that most of the breakthroughs in the area of technology came on the back of availability of energy.
“When we talk about energy, let’s bear in mind critically that it’s been proven that there’s a direct correlation between availability and use of energy on one hand, and GDP level, which translates into quality of life,” Okwuosa said.
“There’s no question at all that we’re on the path for development in Africa. We need to develop. We’re starting from a low point compared to the developed world when you talk about energy transition. Now, when you quantify through any model you wish, and you look at where you want to be in terms of development at the time we’re talking about goal-zero which is 2050; put the energy requirement together, and you will agree that as far as Africa is concerned oil and gas remains the primary source.
“Of course, we’ve renewables, we’ve other sources that will be trickling in. And I called it trickling in, because the quantum is quite small and will continue to be small relatively. Because as you’re possibly increasing investment in trying to drive energy that is termed green, your need for energy overall is also increasing.”
Infrastructure
Aside issues around climate change and energy transition, poor infrastructure or lack of it, is a major challenge hampering the development of the oil and gas industry in Africa, particularly pipeline infrastructure.
However, efforts are being made to address it. In February, Nigeria, Niger, and Algeria signed an agreement to begin the development of Trans-Saharan Gas Pipeline project, at the third edition of the Economic Communities of West African States (ECOWAS) Mining and Petroleum Forum (ECOMOF) in Niamey, Niger. There are also plans to resume the West African Gas Pipeline by some of the countries in the West African sub-region.
Okwuosa posited that to deepen domestic utilisation of gas on the continent, the right infrastructure needs to be built. He stressed that these needed facilities should meet qualities and standards of engineering principles, to prevent pollution.
Speaking on the importance of the ongoing construction of the Ajaokuta-Kaduna–Kano (AKK) gas pipeline project, which his company, Oilserv, is handling, he said that the project will stimulate the development of gas infrastructure and industrialization in Nigeria.
“The AKK gas project, when completed, will boost the agricultural and manufacturing sectors, carbon footprint as part of measures to reduce global warming and provide gas for power generation and gas-based industries,” Okwuosa noted.
“The project is important for Nigeria because the gas is what will help Nigeria to develop. Development cannot happen without energy and our largest form of energy in terms of availability is gas.”
Environmental Impact
Reducing global carbon dioxide (CO2) emissions to net zero by 2050 is consistent with efforts to limit the long-term increase in average global temperatures to 1.5˚C. With this target in view, access to credit facilities has been challenging. Without access to credit facilities, which mostly come from the West who are at the vanguard of net-zero, Africa may not be able to harness its huge hydrocarbon resources.
However, according to Okwuosa, Africa does not contribute more than 4 percent to the global carbon emissions, adding that there is a direct correlation between availability and use of energy and Gross Domestic Product (GDP) levels.
“It’s also been proven already that Africa does not contribute more than 4 percent to the impact of fossil fuel usage in the world. So, we bear that in mind. But let’s ask ourselves a question: If you look at the world together, part of the areas we’ve had significant drop in fossil fuel use is in the issue (area) of transportation. Take basic vehicle usage. In the past 10 years, we’ve gradually, in the West, been increasing the quantum of vehicles that we term electric vehicles,” he said.
“Now, put a scenario — you’ve these electric vehicles, you can stay in the United States here or Europe, buy electric car, have access to plug and charge it for use. And take another scenario – like in Africa – if you’ve to buy electric car, you probably will end up charging it with a generator.”
Okwuosa also noted that some of the things that need to be done to achieve net-zero target are beyond the control of Africa. There is a projection that Africa needs about $28 trillion to achieve net-zero target by 2050. He emphasized the need for the deployment of the right technology to reduce the impact of carbon emissions from the oil and gas exploration and production on the continent, and harness these resources for the development of Africa.
According to him, with the possibility of using carbon capture technologies, Africa can reduce emissions caused by fossil fuel, saying “if more of this is incorporated in our services, it will help a lot.”
Policies and Finance
Only $70 billion investments were made in Africa’s oil and gas industry between 2015 and 2019, according to KPMG.
Okwuosa stated that Africa needs to have its own funding model to harness its hydrocarbon resources, especially with the growing agitation by climate advocates in the West who are pushing for discontinuation of funding for fossil fuel related projects.
He enjoined African countries to formulate policies that will help drive the availability of energy on the continent.
For Africa to attain energy security and in-continent value addition, experts say that it must address limitations such as paucity of funds to finance its oil and gas projects, technology limitations, high skill gaps limitations, inadequate infrastructure to sustain oil and gas operations, underdeveloped internal market for hydrocarbon deliveries, over dependence on the sale of crude oil for foreign exchange earning, and budget financing. All these have been identified as serious threats to the continent’s oil sector.
OTC is a platform where energy professionals across the globe meet to exchange ideas and opinions, to advance scientific and technical knowledge for offshore resources.
The conference gives attendees access to leading-edge technical information, the industry’s largest equipment exhibition, and valuable new professional contacts from around the world.
PETAN, an association of indigenous Technical Oilfield Service Companies, has been responsible for leading and hosting the Nigerian delegation to the event annually.
