OPEC Kicks Over Lack Of Investment In Oil & Gas Sector

The Organization of Petroleum Exporting Countries (OPEC) has said that the drive against new investments in the oil and gas sector is harming economic recovery in Nigeria and other areas of the world. 

Some foreign oil corporations, including Shell and ExxonMobil, have exited Nigeria's onshore resources, citing the global push for energy transition and a net carbon zero aim.

OPEC Secretary-General Sanusi Barkindo lamented the apparent standstill in new investments in the oil sector during his keynote talk at the Nigeria Energy Forum during CERA Week 2022 in Houston, Texas.

"The campaign against new oil and gas investments has a limited and extremely short-term outlook.

"Indeed, its detrimental repercussions on global economic recovery, energy security for both consumers and producers, and family welfare throughout the world have begun to emerge."

He emphasized that the ambiguity and, at times, contradicting signals in policy-making in some areas of the world might have negative consequences, particularly if it stifles critical investments and causes demand to surpass supply.

"What is apparent is that oil and gas will play a key part in the energy transition," said Barkindo. 

Mele Kyari, Group Managing Director of Nigerian National Petroleum Company Limited, emphasized at the recently ended energy conference in Abuja that NNPC will continue to develop Nigeria's gas resources despite the exodus of IOCs from the nation owing to the net carbon zero goal.

On Thursday, Barkindo stated that OPEC supports the need to cut emissions, improve efficiency, and embrace innovation, but that "we must also be conscious of the danger we take of not investing enough in the future of this business."

"We are already coping with the terrible effects of the COVID-19 epidemic on investment, which has decreased by 30% in 2020," he continued.

Last year, investments rebounded considerably, but not to sustainable levels. Allow me to put a couple of numbers here for context.

According to OPEC's most recent World Oil Outlook, energy consumption will grow by 28% between now and 2045, hitting 108.2 million barrels per day.

Cumulative oil-related investment requirements of $11.8 trillion between 2021 and 2045.

When assessing the size of the energy shift, the OPEC scribe stated that operators in the field must harness all available energies internationally.

He added that the oil and gas sectors have a lot to contribute in terms of working delivering stable and secure supply, as well as lowering emissions.