The Organisation of Petroleum Exporting Countries (OPEC) says the global energy sector requires about 12.6 trillion dollars investment cumulatively for development by 2045.
The Secretary General of OPEC, Dr Mohammad Barkindo made the disclosure while presenting a keynote address at the 14th Annual Conference of the Nigerian Association of Energy Economics (NAEE) in Abuja on Wednesday
The theme of the Conference was: “Strategic Reponses of the Energy Sector to COVID-19: Impact on African Economies”.
He said that oil would continue to remain relevant to the global economic growth and development.
“It is vital for us to remember that oil will remain the largest contributor to the energy mix to 2045 with more than 27 per cent, according to the latest OPEC World Oil Outlook.
“Renewables are developing most rapidly, but at the same time, the world’s economy is set to double and all resources will be required to meet this growing need.
“ Cumulative investment of 12.6 trillion dollars in the upstream, midstream and downstream is crucial through to 2045 in order to meet this need,’’ he said.
According to him, investment in 2020 dropped by more than a whopping 30 per cent in the face of COVID-19, even worse than the dramatic declines seen in the severe 2015-2016 industry downturn.
He said that the energy security risk that would result from too little investment would heavily impact both producers and consumers.
He noted that oil-producing developing countries, like Nigeria, would be particularly hard hit.
“History has shown that energy insecurity brings with it economic insecurity and geopolitical instability.
“All OPEC Members, including Nigeria, will have to re-strategise to maintain their positions in the new global energy mix, including focusing on economic diversification.
“ Oil-producing countries, and in particular African countries that rely on oil and gas production for revenues, must create an investment friendly climate — to this end,’’ he said
He noted that the Petroleum Industry Bill (PIB) promised to be a huge success in reviving the fortunes of the oil and gas industries in Nigeria.
He said that reduced foreign direct investment into Africa’s industry could be catastrophic for many countries and peoples.
He said that OPEC was concerned about increasing pressure on the oil industry coming from many sides, including decision-makers, along with investors.
“Even within the boardrooms of oil majors, the push is strong to strive for policies and initiatives that could have a drastic negative effect on oil-producing countries.
“ Oil is the lifeblood of our country, thus the importance of this issue cannot be underestimated,’’ he said.
On Energy Transition, Barkindo said oil had a powerful role to play in the energy transition, and it should not be swept under the rug based on old credentials.
He noted that with the help of technology, the industry can become low carbon or even zero-carbon.
“This includes technologies already being implemented such as carbon capture, utilization and storage.
“Additionally, great strides have been made in efficiency gains in the industry, along the entire production chain.
“It is essential that one compare the lifetime credentials of each source of energy in terms of emissions.
“For example, electric cars may appear cleaner, but emissions are buried in many of the industrial process required to produce them.
“We applaud Nigeria’s goals to reduce carbon emissions while pursing the UN SDGs, which seek to achieve access to affordable, reliable, sustainable and modern energy for all.
“ Transitioning to a low-carbon energy future may seem to run counter to the socio-economic benefits of energy, in particular to energy-poor countries.
“Nigeria is attempting to tackle this challenge head-on with the strong promotion of solar and wind energy, and expansion in the use of natural gas,’’ he said
On the impact of COVID-19, the OPEC scribe said that the global oil sector was worse hit but on the road to recovery.
“ We have all suffered the impact of the COVID-19 pandemic over 2020 and 2021. It constitutes an unprecedented event for the global oil industry and the world economy.
“No country or citizen of this planet has remained unscathed and the pandemic continues to overshadow 2021 as it did 2020.
“However, oil-producing developing countries have been particularly hard hit.
“They are facing a triple whammy; COVID-19 has crippled the economies of poorer countries more than wealthier ones,’’ he said
He urged the NAEE to use the conference and proffer solution to some major challenges facing the sector nationally and globally.