Key Points
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Nigeria must monetize oil and gas reserves before demand declines.
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Energy transition threatens long-term value of fossil fuels.
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Maikanti Baru and Wumi Iledare press for faster reform.
People are telling Nigeria’s government to speed up the monetisation of its huge oil and gas reserves before the world moves to cleaner energy and demand for fossil fuels drops. Energy economists, former officials, and people who work in the industry say Nigeria could lose billions of dollars if it waits too long.
The stakes are high. Nigeria has about 37 billion barrels of crude oil and more than 200 trillion cubic feet of natural gas. But as countries rush to reach their net-zero goals, the time to make money may quickly run out.
Experts want oil to be monetised faster
Dr. Maikanti Baru, who used to be the Group Managing Director of the Nigerian National Petroleum Corporation, has been very clear about how important it is. He says that Nigeria needs to “get the most out of its hydrocarbons while global demand is still high.”
Baru said that if Nigeria doesn’t build new oil fields and gas infrastructure quickly enough, its reserves might not be as competitive as investors move to low-carbon sectors.
According to a report by the Punch news, Professor Wumi Iledare, an oil and gas economist and former president of the Nigerian Association for Energy Economics, also said that Nigeria should use its gas resources as a temporary fuel. He said, “Gas is the link between fossil fuels and renewable energy.” “We need to take advantage of this chance to boost exports and support local businesses.”
He warned that regulatory delays and logjams will leave assets stuck, especially as more money goes into green energy.
Demands for changes in the energy policy framework
The Petroleum Industry Act gives investors tools, but many in the industry say that it hasn’t been put into action yet. Delays in putting into action fiscal incentives and licensing changes have made it harder for capital to flow in.
Dr. Diran Fawibe, Chairman of International Energy Services Limited, told the government to “make its framework more efficient and offer competitive terms.” He said that Nigeria can’t “wait until global demand peaks before acting.”
He also said that making money off of oil and gas reserves could help the naira stay strong and give the government more room to breathe financially because of high debt servicing costs.
The energy transition makes things more urgent
The main idea behind Nigeria’s energy future is to monetise oil and gas reserves. The International Energy Agency says that global demand for oil may level off before 2030. This means that Nigeria has less time to make money from oil production.
Countries like Qatar and Saudi Arabia are building more liquefied natural gas facilities. Nigeria’s production is falling behind, though, because of a lack of infrastructure and not enough investment.
Funsho Kupolokun, who used to be the Executive Director of NNPC, said, “The energy transition isn’t going to wait for us.” Get money from your oil and gas reserves now, or you’ll be useless in ten years.
