Fossil Fuel To Play Major Role In Global Energy Transition- SPE

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Yemisi Izuora

The Society of Petroleum Engineers (SPE), Nigeria Council, has identified fossil fuel as critical in the ongoing global race towards renewable energy development.

The Engineers, said oil exploration and in particular gas which is considered a cleaner fuel will remain relevant providing new opportunities for the profitable development of the country’s oil sector.

Chairman of the SPE, Tunji Akinwunmi, who spoke ahead of its upcoming Oloibiri Annual Lecture, with theme, ‘Operational Excellence and Portfolio Optimisation, Way Forward for the Oil and Gas Industry Post Covid 19’, said there are lots of capacities for adaptation and still huge headroom for the nation’s hydrocarbon resources as fossil fuel remains the energy choice for transportation, aviation and feedstock for petrochemicals.

“The oil and gas industry is still vibrant and there is indeed a transformation that is underway where there is a movement from fossils to renewables. The huge contributor to energy as per current demand is from fossil fuels. As long as we have good policies in place that will add value to the upstream oil and gas sector, there is a scope for continued oil and gas development,” the SPE said.

Akinwunmi projected that the industry would experience more divestment as most of the assets in the industry are aging. He said new players are coming on board to drive portfolio optimisation in the sector.

He said: “We are in a process of transition and gas is much cleaner than oil. Nigeria has abundant gas resources. If we move towards the development of our gas resources, it is still within what we do. We have an overall oil demand and even if renewable thrives, there is still more space than would be filled in the short, medium and long term by oil which is the energy of choice for transportation, aviation and also for feedstock for petrochemicals.

“We have not seen a divestment for quite a several years in the industry and a big one happening at the beginning of the year even at a time where the industry is struggling.

“There could be more divestment on the cards because lots of these assets are aging and some of these assets are better managed by structures that have smaller overheads. There are lots of new players coming on board and we expect that there will be some activities in portfolio optimisation.”

He described the PIB as a welcome development as it will help to reform, given the number of years that have been spent to review the bill. He expressed hope that the bill would enhance and stimulate more activities in the oil and gas industry.

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