The hard push for energy transition may be setting up the conditions that will drive oil prices above $100 a barrel, Simbi Wabote, the executive secretary of the Nigeria Content Development Monitoring Board has said.
Wabote said that as development project has been stifled of funds or companies become shy or guilty of financing new projects, “We are preparing the ground for the sudden disconnect between demand and supply.”
“Why global demand can become bullish within a few months, it takes years to complete oil and gas development projects,” Wabote said.
The global push for energy transition is happening at a pace, especially in Africa are concerned that the continent could get the short end of the stick.
The IEA recently published Net-Zero goals for 2030. Already investment funds are exiting the oil and gas sector and European countries are announcing bans on fossil fuels raising concerns for countries like Nigeria that depends on oil.
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“The future of Nigerian hydrocarbon industry is in gas,” said Wabote.
With enviable proven oil reserves of 37 billion barrels, and proven gas reserves of or 206.5 trillion cubic feet (TCF). Nigeria is a major player in the global hydrocarbon landscape.
Nigeria’s proven and unproven gas reserves are estimated at 600 TCF force, leading to Nigeria being referred to as a gas province with pockets of oil.
Yet despite the huge reserves, the utilisation is still relatively very low. For instance, the Nigerian Gas Association estimates that gas constitutes just 5% of the energy mix in Africa.
“This shows that Africa has a lot of catching up to do in energy transition when compared to other continents such as Europe, and North America.
“Consequently, Nigerian daily gas production is estimated as 7.5 billion BCF per day, even if we double this production, this will only utilise 5.5 TCF of presumed proven reserves every year.
“Therefore, are we in a hurry to set aside this abundant natural resource that God has given us to look somewhere else. The answer to be is no. This means our current proven gas reserves can sustain us for about 40 years. If the 600 TCF estimate is considered it means we need more than 100 years to finish the gas reserves.
Wabote said that there is hope for Nigeria with regard to gas.
“Doubling current utilisation means constructing six additional trains for LNG to process more than double the gas used for power plants, LPG, although gas fertilisers and just to mention that a few,” Wabote said.
