President Bola Tinubu has revealed that his removal of the Premium Motor Spirit (PMS) has encouraged private sector participation in the energy industry.
Declaring the 7th Nigerian International Energy Summit (NIES) open in Abuja, the president added that the stoppage has the potential to attract more local and international investors.
The theme of the summit is “Navigating the New Energy World Order: Security, Transition and Finance.”
Tinubu was represented by the Minister of Information and National Orientation, Alhaji Mohammed Idris Malagi.
According to him, through the phasing out of subsidy, the federal government has created a more transparent and accountable sector.
He noted that the funds that were formerly spent on subsidy is now channeled into the development and upgrading of the nation’s energy and other social infrastructure.
Tinubu said: “By removing the subsidy, we are creating a more transparent and accountable energy sector.
“The funds that were previously allocated to subsidizing petroleum products are now redirected towards developing and upgrading our energy and other social infrastructure.
“Furthermore, the removal of the subsidy has encouraged further private sector participation in the energy industry, with the potential to attract more local and international investors, and foster innovation and competition that will drive down costs and improve the overall efficiency of our energy sector.”
The president, who admitted that the removal of subsidy will negatively impact low-income earners, stressed that, in parallel with the subsidy removal, his administration is committed to implementing social intervention programs to mitigate the short-term effects on vulnerable populations.
These programs, according to him, will ensure that the burden of the subsidy removal is shared equitably and that the most vulnerable are protected.
He added, “The decision to remove the petroleum subsidy is not an easy one, but it is a necessary one for the long-term energy security and economic prosperity of our beloved nation. I call upon all stakeholders, including industry experts, policymakers, and the general public, to engage in constructive dialogue and collaboration as we navigate these challenging but transformative times. Together, we can build a resilient and sustainable energy future for Nigeria.”
He charged the stakeholders in the summit to leverage innovation and collaboration to ensure a smooth and just transition that will leave no one behind.
He said finance plays a pivotal role in driving the energy agenda. Adequate funding, said Tinubu, is crucial to support the development and deployment of cutting-edge technologies, infrastructure, and projects that will shape our energy future.
He insisted that “as a nation, we must explore innovative financing models, engage with the private sector, and attract investments that will propel us towards a more resilient and diversified energy sector.”
The Nigerian National Petroleum Company Limited (NNPCL), Group Chief Executive Officer, Malam Mele Kyari revealed that the firm has begun the tunnelling of the River Niger for OB3.
He said NNPCL is committed to developing the deepwaters going forward.
He said the company has substantial access to capital today. Kyrie also noted that there was a shortage of investment support, and that is the reason NNPCL supports the African Energy Bank with capital.
He said there is the current challenge of the security of assets, but Tinubu is working hard to tackle that to earn investors confidence to deliver production to the market.
Meanwhile, the Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri said Nigeria has so many idle wells, that it needs to ramp up production.
The minister called for an increase of upstream production to get the right quantity that will service local and international obligations.
He said, “Dangote Refinery needs about 650,000 barrels a day. We are rehabilitating our government refineries, which need about 440,000 barrels per day.
“We have a couple of modular refineries that need oil. So on the whole we need to ramp up production so that we will be able to ramp up our domestic needs, guarantee energy security locally.”
The minister said the Port Harcourt Refinery has started operation.
According to him, Nigeria has no business importing fuel.
Lokpobiri said now that the domestic refineries are being rehabilitated that will come into full operation by the end of this year.
He said: “Some of them have started, Port Harcourt Refinery has start. Warri is about to be completed between now and the next two months. Kaduna will come up. At the end of this summit we should be able to come up with finance because finance comes with investment.”
He insisted that Nigeria is not stopping the exploration of fossil fuel, noting that the country will develop it in a sustainable manner.
He said the international oil companies are not leaving the country but they were only leaving for the offshore deepwater.
He noted that the western world clamouring for energy transition was still developing hydrocarbon.
“The West is not slowing down oil exploration. But we are being asked to slow down or stop investments in fossil fuel,” he said.
According to him, Africans are only the victim of oil exploration and not the problem.
He said: “You the West is responsible for the emission.”
Speaking, the Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, dropped the hint that the Obiafu/Obrikom/Oben (OB3) will be completed by March 2024.
He said the project is a vital piece of gas infrastructure for the supply of feedstock to the AKK pipeline.
This pipeline, said the minister, is among Nigeria and Africa’s biggest gas transmission systems.
Ekpo said: “Per the Contractor’s estimates, I am pleased to announce that the OB3 pipeline will be completed by March 2024, and the 42” 127 km pipeline will supply 2BCF daily. “Upon completion, this pipeline will provide the AKK pipeline with gas from the three fields of Obiafu, Obrikom, and Oben.”
Ekpo recalled that on September 12, 2023, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced the successful bidders for the Nigerian Gas Flare Commercialization Program.
Out of 300 interested entities, 42 were chosen, receiving 40 flare sites for independent development, while 4 entities got 9 sites each for cluster development.
He noted that the allocated entities are expected to commence full operations on their sites this year.
The minister said: “Another milestone in our journey towards a gas-focused economy is the Ajaokuta-Kaduna-Kano (AKK) pipeline.
“I am pleased to report that significant progress has been made in constructing this critical infrastructure project, and we are on track to ensure its completion and commissioning as scheduled.”
The minister noted that the government will continue the development of the necessary infrastructure to ensure widespread access to clean and affordable natural gas for domestic consumers and encourage the adoption of compressed natural gas (CNG) and liquefied petroleum gas (LPG) for transportation and household use, respectively.