Nigeria must be prepared to face changing energy environment —Nwosu
The President of Society of Petroleum Engineers (SPE), Nigeria Council, Chikezie Nwosu, in this interview by OLATUNDE DODONDAWA, urges stakeholders and government to tackle global energy challenges. Excerpts.
WHAT are the considerations behind the Annual Oloibiri Lecture Series and Energy Forum?
The SPE OLEF is an annual lecture series focused on contributing to oil and gas policy development of Nigeria in commemoration of the first oil well drilled in Nigeria by Shell Darcy at Oloibiri, in Ogbia, Bayelsa State in 1956. It has become a forum where SPE Nigeria Council brings together the key industry players from policy/legislature, regulatory/federal executive, investors, operators, service companies to discuss on topical issues in the oil and gas industry, with a view to influencing the right policy direction to enable the growth of the industry and the Nigerian economy, thereby impacting positively on the all Nigerians.
Looking back from the inception of this annual dialogue, what are the tangible benefits of this initiative you can relate with?
This is the 18th edition of the SPE OLEF series, and from the first edition the expansion into deep water, marginal fields policy, local content policy, the Gas Master Plan, fiscal policy, cost effectiveness challenges in the Nigerian business environment, gas flaring policy, regulations and transparency, energising the full gas value chain (from producers to end users), among other critical topical issues, have helped to shape current and emerging policy directions in Nigeria.
Of note is the Ministry of Petroleum Resources’ consolidation of a lot of these issues into the ‘7 Big Wins’ policy document that is being driven with such energy and passion by the Honorable Minister of State for Petroleum Resources, Dr Emmanuel Ibe Kachikwu, with the support of the GMD NNPC, Dr Kachalla Maikanti Baru and the heads of parastatals within the Ministry of Petroleum Resources.
The major challenge is the stability and sustainability of these policies beyond the term of office of the key drivers, and this is where SPE and similar professional organizations like NAPE, NGA,NMGS, NSE, NAE, PETAN, OGTAN can play a major role.
How has Society of Petroleum Engineers (SPE) as a global professional association impacted the Nigerian oil and gas sector generally?
The SPE is a non-profit and apolitical professional organisation, regulated by international best practices through the SPE International (established in 1957). We are therefore in a unique position to provide unbiased advice to the authorities for the better good of Nigeria, without the accusation of working in our own, or anyone else’s, personal interest. In addition, we provide an international perspective, through both our relationship with SPEI, but especially through a lot of our members who have many decades of experience working internationally. Of recent, as noted, many policy directions the Nigerian Government has taken are supported either indirectly by SPE or directly through our members who consult for both the National Assembly and the Federal Executive.
This international perspective is perfectly balanced with our local knowledge and provides a powerful tool to influence and support Government policy. Of note is our ability to attract foreign direct investments (FDIs) to Nigeria through our annual flagship event, the SPE Nigerian Annual International Conference and Exhibition, which has been a resounding success in bringing the World to Nigeria.
In line with this, the very successful Nigeria International Petroleum Submit (NIPS) championed by the Honourable Minister of State for Petroleum Resources, and held from 18 – 22 February in the ICC, Abuja, had SPE resource persons supporting this event.
Within the country, we continue to provide world class courses at heavily subsidised rates (sometimes entirely free) through our Distinguished Lecture series (about 10 a year), monthly technical sessions across the five sections in Nigeria (Abuja, Lagos, Port-Harcourt, Benin & Warri), short courses by our most experienced members, a Professional Development programme for our ‘members in transition’ and an annual Students Technical Symposium & Exhibition (STSE) to be hosted by the Nile University of Nigeria, Abuja from 15 -17 March 2018.
These courses cover technical and commercial areas in the oil and gas business, but also ethical and strategic leadership courses to prepare the next generation of practitioners in the industry for the challenges ahead.
We also have embedded in SPE, the Committee of Heads of Petroleum Engineering Departments (CHPED) which is rebuilding the curriculum for Petroleum Engineering in Nigerian institutions, in collaboration with the Nigerian Society of Engineers (NSE) and as directed by the Council of Registered Engineers (COREN), to ensure graduates of Petroleum Engineering are ‘industry-ready’.
We are also socially responsible through our various charity events across all our sections, outreach programmes in primary, secondary and tertiary institutions that teach about the responsible uses of energy.
Finally, SPE NC is collaborating with the NCDMB to create an indigenous R&D environment and culture, which will ensure technology adaptation (utilising our vast local resources) and innovation keep Nigeria at pace with, or ahead of, the fast-changing world of technology.
What makes the theme of OLEF 2018 relevant at this time?
In line with our well-established tradition, this year’s SPE OLEF is themed along a critical and topical issue ‘The Nigerian Oil Industry in a World of Changing Energy Supply: Are we prepared?’
It has become clear that, with anticipated growth in energy demand, the world is rapidly moving towards an age of cleaner sources of energy. For fossil fuels, this will mean a greater reliance on gas and less reliance on oil and, especially, coal. In addition, hydroelectric and gas powered cars will replace diesel engines and, with time, gasoline engines.
Add to this the growing investments in renewable sources of energy such as solar and wind, and it becomes evident that Nigeria must rethink (or rejig) its energy policy to solidify the gains in the oil & gas industry (the 7 Big Wins), and leverage on these learnings to prepare for an energy mix that will become less reliant on the more polluting fossil fuels.
There are many opinions on how long reliance on fossil fuels will last; many of these opinions are predicated on the huge remaining resources of oil and gas. However, one must note the oft quoted statement that ‘the stone age did not end because mankind ran out of stones, and the oil age will end long before we run out of oil’. The pressure from the next generation of leaders will drive technological advances that will result in less reliance on environmental damaging energy, and we (Nigeria) must be ready now.
Fate has played a major role in ensuring that we can stay ahead – abundant energy from the sun, wind energy in many Northern parts of the country and an estimated 190Tcf of gas (and prospective resources that could be as high as 600Tcf),
Who are those coming to attend and the speakers?
We expect a distinguished audience passionate about energy and the Nigerian economy in attendance and registration has been outstanding so far.
For the speakers and panel discussants, we will have representatives from the federal executive, the National assembly, energy companies, energy intelligentsia, investors and gentlemen of the fourth realm present.
The Minister of State for Petroleum Resources, Dr Emmanuel Ibe Kachikwu will deliver the keynote address, the GMD NNPC, Dr Maikanti Kachalla Baru will deliver a ‘State of the Industry’ address, after which there will be a panel session moderated by a former Minister of Power, Professor Bart Nnaji, with discussants drawn from eminent personalities in the oil, gas and renewables industry, National Assembly chieftains and policy gurus.
In your view, what is the path to the future considering local unpreparedness to the changing energy supply?
That is the essence of what the enabling energy policy must do – ensure that all stakeholders are prepared for the changing energy supply. This must, as a critical and integral part, include all providers and users of energy.
Experts are of the opinion that Nigeria’s proven oil and gas reserves are been underestimated. How would you want Nigeria’s independent and marginal oilfield producers to respond to this, towards the growth of the economy of oil sector and the nation?
We cannot determine this until there is an agreement on under what standards our hydrocarbon resources can be categorized as reserves. DPR is leading an effort with the involvement of operators in the industry to establish these standards, and we are hopeful for an outcome that is not only acceptable to Nigeria, but is aligned with international best practices that ensure foreign investors will be happy to risk their money on.
However, specifically for gas resources, there is an opinion based strongly on the fact that these gas resources were discovered when prospecting/ appraising for oil, that we may have underestimated the gas resource volumes (not reserves).
What areas present the best growth potential to those seeking opportunities and to attract investment to Nigeria oil and gas sector?
The opportunities are endless, as we are still scratching the surface – whether in the upstream, midstream or downstream sectors, there are abundant opportunities for investments in infrastructure. The enabling environment through ensuring security and stability of investments will attract the needed investments to unlock these opportunities.
What incentives to invest in petroleum industry when supply is unsure and fiscal incentives is uncertain?
Again, these problems are known and are being addressed. If the passion we have seen in putting together the enabling policies (of which the critical elements of the PIB – The Governance, Host Communities, Fiscal Reforms and Downstream bills) is sustained in passing the bills and implementing all the provisions, then we will succeed in attracting the needed investments. You may say we have heard all this before, but what is different now is that we are at a stage where it would be disastrous not to deliver – the ‘7 Big Wins’ are essentially ‘7 Must Wins’!!
What is your take on the level of human resources that are required to ensure further progress of the oil and gas industry in Nigeria? What would you like to see happen?
Nigeria does not have a problem of human resources in the oil and gas industry. It appears that we may have a surplus of such resources, but this surplus is required for when the necessary investments will flood in. The reality is that with the growth in the energy industry, that can occur with the right investment climate, this surplus will very easily be absorbed.
What do you see in the future for SPE and the Oil sector in Nigeria in the few years you have lead the society?
The SPE will continue to play a strong role in policy direction and execution through ensuring that the outcome of its engagements are well documented and presented to the authorities, encouraging its members to provide the expertise in their field/s to Government either through consultancy or service, provide forums for bringing the world to Nigeria and Nigeria to the world, collaborating with Government agencies in such areas as indigenizing R&D capacity and capability, supporting the provision of pedagogical aids to Universities and Training Institutes, ensuring the curriculum for PE & Geosciences and related disciplines in the University delivers industry-ready graduates and supporting the strategic and ethical leadership of the next generation of entrepreneurs, employers and workers in the energy industry. All aligned with the ‘7 Big Wins’.
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