The Chairman of AA Holdings, Austin Avuru, has projected that demand for Nigeria’s crude oil would drop by 61 per cent in the international market by 2060.
He said this at the pre-conference workshop of the 2023 conference of the Nigerian Association of Petroleum Explorationists with the themed ‘Unlocking Nigeria’s Remaining Energy Potential to Fuel Economic Growth and Diversification: Opportunities and Challenges’, in Lagos recently.
The former co-founder of Seplat Petroleum (now Seplat Energy) said demand for the country’s oil would drop from the current 103 million barrels to 40 million barrels annually by 2060.
“The world is transitioning into renewable energies, and for this reason, demand for Nigeria’s crude oil would decrease from the current 103 million to 40 million annually by 2060,” he asserted.
He added that coal would be the first to be phased out in the energy transition journey, followed by fossil fuel, and then gas.
“That is why you see that the Federal Government said it was adopting gas as the country’s transitional fuel because it would be the last to be phased out,” Awuru noted.
Nigeria’s crude grade, Bonny Light is one of the most-demanded grades in the international market due to its light sulfuric content.
He advised FG to increase exploration, and take full advantage of the country’s vast natural resources to boost its economy before 2060.
On how the Federal Government can boost its crude oil production, he said a total of about $21bn investments would be required annually to attain 3 million barrels per day crude oil production by 2027.
“Theft is not the reason Nigeria has not been able to produce more than 1.3 million barrels of crude oil, but lack of investment from the international oil companies.
“IOCs are walking away from funding oil and gas exploration, and are redirecting capex into renewables. So, if Nigeria wants to grow its oil production to 3 million by 2027, the Federal Government would be needing nothing less than $21bn yearly to achieve this,” Avuru remarked.
He added that a $7.6bn investment would be needed to attain at least 2.1 million barrels per day by 2024/2025.
According to the former Seplat boss, due to energy transition, the level of investment in the oil and gas sector would have dropped drastically, leaving only TotalEnergies in Joint Venture partnership with the Federal Government by December 2025.
“Banks have stopped giving loans to the oil and gas sector. Multinationals have stopped spending, and the independents have been refused access to those assets already divested by the IOCs,” he claimed.
Crude oil production has been declining since COVID-19 in 2020, as output crashed to a low of 900, 000 barrels per day last year in September, before rising to about 1.3mb/d last month, according to statistics from the Organisation of the Petroleum Exporting Countries.
The President of the Association, Eliot Ebie, during the pre-conference press briefing, said that Nigeria would continue to experience low oil production unless it addresses security challenges, pipeline vandalism, and theft.
Ibie also blamed slowness in the implementation of the Petroleum Industry Act as one of the reasons for low investment in crude oil exploration.