The Chairman of AA Holdings, Austin Avuru, has said that there would be a 61% decline in the global market demand for Nigerian crude oil by 2060.
According to The Punch, this statement was made during the pre-conference workshop of the Nigerian Association of Petroleum Explorationists 2023 conference, which was held in Lagos recently and had as its theme “Unlocking Nigeria’s Remaining Energy Potential to Fuel Economic Growth and Diversification: Opportunities and Challenges.”
According to the former co-founder of Seplat Petroleum, which is now Seplat Energy, by 2060, the nation’s oil consumption will have decreased from 103 million barrels per year to 40 million barrels.
He claimed that by 2060, the demand for Nigerian crude oil would drop from 103 million to 40 million yearly due to the global shift towards renewable energy sources.
He also said that in the energy shift, gas would come last, then fossil fuels, and finally coal.
According to Awuru, this is the reason the federal government announced that gas would be the nation’s transitional fuel, as it would be the last to be phased out.
Because of its low sulphur level, Nigerian crude grade Bonny Light is one of the most sought-after grades on the global market.
He suggested that FG expand its exploration efforts and fully utilize the abundance of natural resources in the nation to enhance its economy before 2060.
Regarding ways for the federal government to increase its output of crude oil, he stated that in order to reach 3 million barrels per day of production by 2027, a total of roughly $21 billion in investments would need to be made each year.
“The absence of investment from the foreign oil corporations is the real reason Nigeria has not been able to produce more than 1.3 million barrels of crude oil, not theft.
“IOCs are shifting capital expenditures towards renewable energy instead of continuing to fund oil and gas exploration. Thus, the Federal Government will require at least $21 billion annually to enable Nigeria to increase its oil production to 3 million barrels by 2027,” Avuru said.
The achievement of at least 2.1 million barrels per day by 2024/2025, he continued, would need an investment of $7.6 billion.
The former head of Seplat claimed that by December 2025, the amount of investment in the oil and gas industry will have significantly decreased as a result of the energy transition, leaving just TotalEnergies in a joint venture with the federal government.
“Banks are no longer lending money to the oil and gas industry. The independents have been denied access to the assets that the multinationals have already relinquished, and the multinationals have stopped spending,” he said.
According to data from the Organisation of the Petroleum Exporting Countries, crude oil production has been falling since COVID-19 in 2020. Production fell as low as 900,000 barrels per day in September of last year before increasing to almost 1.3 million barrels per day last month.
The Association’s President, Eliot Ebie, warned that until security issues, theft, and pipeline vandalism are addressed, Nigeria’s oil production will remain low during the pre-conference news briefing.
Ibie also attributed a portion of the low investment in crude oil exploration to the Petroleum Industry Act’s tardiness in being implemented.
