The Managing Director of TotalEnergies EP, Nigeria Limited, Mike Sangster, has stated that the Petroleum Industry Act, PIA, is invariably the most significant legislation to impact the Oil and Gas landscape due to its ramifications on the industry and country at large.
He made this known while giving his sponsor remarks at the Annual International Conference and Exhibition of the 39th Nigerian Association of Petroleum Explorationists, NAPE, Management Session held in Lagos.
The Act according to him is expected to eliminate regulatory/legal hurdles, attract critical investments, unlock financial resources, accelerate local content development, and enhance employment, among other opportunities.
Sangter pointed out that the case for investments envisaged by the PIA still has to be made in view of climate concerns and the attention on energy transition. We must appreciate that although fossil fuels will remain the main source of energy for the world for some time to come, the march to renewable energies is irreversible.
“Nigeria may not have much choice over the speed and velocity of the energy transition. It is therefore very urgent that the country takes maximum advantage of the deregulation of the industry and other welcome provisions of the PIA to exploit her petroleum resources, build critical infrastructure and position competitively in the energy transition.”
He said President Buhari has outlined Nigeria’s path to net zero in consonance with the goals of the Paris Agreement.
Energy Transition at TotalEnergies: More Energy, Less Emissions
According to him TotalEnergies is an energy company with footprints in over 130 countries around the world. “We have been in Nigeria for over 60 years. We are the only IOC with presence across the entire value chain of the Oil & gas Industry at the moment. We started our downstream activities in Lagos in June 1956. And in May 1962, we began our upstream operations in Obagi, Rivers State. Today, our network boasts of 577 service stations spread across Nigeria.”
The TotalEnergies boss stated that currently the company is the second largest producer of crude oil in Nigeria and also the busiest IOC in the country in the last 10 years, having delivered Egina project in December 2018 and currently working towards bringing Ikike project onstream in 2022.
Sangster said in response to the global climate challenge and the growing demand for more affordable, more accessible, and cleaner energy, the company has adopted the name TotalEnergies to affirm its identity as a broad energy company and confirm its ambition to be a major player in the energy transition, on the road to net zero by 2050.
With the new identity, the company underscored its resolve to produce more energy with less emissions in order to contribute to the planet’s sustainable development and effectively address the issue of climate change. The company is doing this by re-inventing itself and moving towards new energies, without renouncing its origins in oil and gas, but by decarbonising them as much as possible and growing in renewable electricity, hydrogen, biomass, wind, and solar power.
“Our Company’s energy mix will change significantly in the coming years. Currently, our production is about 55% oil, 40% gas, and 5% electricity. But by 2030, it will be 50% gas; 35% oil; and 15% electricity. By 2050, the mix is targeted to be 40% renewable power, 40% gas (primarily carbon-free) and 20% liquid products. Out target is to get to Net Zero in all our operations worldwide by 2050. We are committed to this target and working with all our stakeholders, we believe we can deliver cleaner, more affordable, and more available energy to as many people as possible.”
He suggested that PIA implementation must be accelerated. The window for investments into fossil fuels is narrowing. Very few years would remain for access to urgent funds to develop the Nigerian petroleum industry to launch it into that era of energy transition and prosperity that the world envisions.
Issues to be addressed in Nigeria’s Oil Industry
However, to unlock and maximize the potential of the PIA, the following points need to be addressed:
- Political will for a consistent implementation of the provisions of the Law.
- Continuous engagement and consultations with all stakeholders for the unflinching support necessary for the success of the Law.
- Too frequent amendments will foster policy instability and instigate apprehension among investors.
- Too many litigations against oil companies threaten operational stability and induce long term uncertainties.
- Insecurity is a huge challenge.
- Proper/transparent management of the transition from the now defunct agencies to the new ones.
Notwithstanding, Sangster believed if these issues are thoroughly addressed, the country’s oil industry will be in the right path.