COVID-19 Recovery, Russia-Ukraine War Caused Demand In Investment In Energy Industry – Okadigbo

The Nigerian National Petroleum Company Limited (NNPC Ltd) says COVID-19 recovery and volatility brought on by the Russia-Ukraine war caused a sharp increase in oil and gas demand due to concerns about fuel scarcity.

This, according to NNPC Ltd, has called for more oil and gas investment.

Sen. Margery Okadigbo, the Chairman of the NNPC Ltd. Board, made this statement on Wednesday in Abuja at the beginning of the NUIS session for NNPC Upstream Investment Services titled "Oil and Gas: The Investment Gap Dilemma."

The meeting took place concurrently with the Nigeria International Energy Summit 2023 (NIES), which took place from April 16 to April 20 and had as its topic "Global Perspectives for a Sustainable Energy Future."

In a comment, Okadigbo stated that the oil and gas business was symptomatic of the need for investment as the continent continued to expand.

“While we are seeing rising demands and increased competition amongst buyers, it is still expected that our concerns for climate change push towards lowering our carbon footprint.

The dilemma for investment in fossil fuel is still great but energy transition must contain investment for correlating prices and significantly supporting investment.

“Should we continue with the investment needed to meet the demand or should we succumb to the fear of having an investment on worthless future and push insufficient funds into fossil fuel industries?” she queried.

She said that despite the industry's risks, it continued to be a key engine of global economic expansion.

“And as long as we hold continuously in line with fossil fuel policies, the demand will remain strong, making the industry a stable and reliable source of long-term investment,” she added.

Bala Wunti, Chief Upstream Investment Officer, NNPC Upstream Investment Services (NUIS), claimed in a presentation that all countries were willing to invest in order to achieve energy security.

Wunti said that the economic growth of the post-COVID-19 era and the Russia-Ukraine war prompted a change in the pattern. He was represented by Chisoma Elewa, Head of Finance at NUIS.

He said that when the Petroleum Industry Act (PIA) came into effect, investors had access to a beneficial investment environment that clearly distinguished between commercialization and government rules.

He stated that compared to 2021, the sector had a large capital expenditure rise of 39% in 2022, but thankfully the PIA was signed, bringing about reforms.

According to him, this created a favourable environment for international investment and created the profit-driven NNPC Limited, while foreign direct investment progressively increased from US$3.8 million to US$4 million.

He said that the creation of the Hydrocarborn Industrilisation Security Architecture, which improved output, was one of its noteworthy accomplishments.

In a panel discussion, Funmi Ogue, Managing Director of Zigma Energy, called for an industrialised Nigeria and said that the growth of the oil and gas sector was necessary for the country's economy.

Ogue suggested that Nigeria should be portrayed favourably while an inviting environment for investment should be established.

Dr Bolaji Ogundare, Group Executive Director of Pan Ocean Oil Corporation Nigeria Ltd., urged for the development of an energy transition bank as well as a suitable regulatory framework and government structure to close the sector's gaps.