Africa at the Heart of the Global Energy Mix:

What’s Ahead in Nigeria?

Thoughts on Global Energy mix and the future of the Oil and Gas Industry in the light of the current regulatory regime.

2023 NIES

Current trends

• Nigeria is one of the largest producers/exporters of Crude Oil in Africa
• According to Business Day Newspaper (in Jan 2023), Nigeria sustained its position as the largest oil producer in Africa for two straight months, as it pumped 1.235 million barrels per day (bpd) in December 2022

• Largest importer of refined petroleum in Africa
• According to Statista, Nigeria was the highest importer of petroleum products in Africa in 2020 with a volume of 466,000 barrels per day
• According to the Tribune, Nigeria is the only OPEC member that imports 95% of refined petroleum for domestic use

• What we’ve done with our natural

resources so far (Benefits)

• The oil industry contributes 95% of the country’s foreign revenue and about 80% of government revenue - ILO
• The industry creates over 65,000 direct jobs and more than 250,000 non-direct employment - ILO.

• The downsides of being one of the largest energy centers in Africa (challenges)
• According to the Tribune Nigeria has lost over

$46.16B to crude oil theft in 11 years. Between January and August 2022, we lost over $2B.

• We spend over $800m on subsidy monthly according to Premium Times
• According to Punch, it is alleged that about 30 million litres of Petrol are smuggled out of the Country daily

• Economic reasons for deregulation – Implementation of the PIA
• Reduction in Smuggling
• Increased investment – leading to the creation of more jobs
• Improved efficiency – less bureaucracy
• Enhanced competition
• Economic and FX stability

Roadmap to a better energy future - Excerpts from NPDI/ARDA Workshop

• Increase investment in cleaner energy sources – Energy transition
• Adoption of Industry best practices
• Communication and Education
• Consumer Protection

Prepare & Design

Execute

Evaluate

/Sustain

• Risks Identification and Mitigation
• Regulatory Enforcement and

monitoring

• Robust Logistics & Storage

infrastructural Investments

• Regulations & Industry Engagements
• Promote standardized HSEQ systems and best practices.
• Transparent Financing

What MOMAN is doing

• Increased Collaboration with stakeholders to ensure a smooth implementation of the PIA and to provide advisory services to members in areas including, Corporate governance structure, HSEQ, Compliance etc.
• Investment in Infrastructure and Technology: Ardova Plc is building the largest gas plant (20,000 MT) in Sub-Saharan Africa. Members are increasing their fleet capacity and adopting best practices in logistics monitoring and process automation.

• Risk Management and Self-regulation.

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Prepare & Design - What we must do now

• Robust Logistics & Storage infrastructural Investments
• Repair/Construction of Bad Roads, pipelines, storage facilities etc.

• Fleet Optimization and Transport Safety Management across the industry.
• Open access to critical national infrastructure
• Adoption of digital solutions and automation

• Regulations & Industry

Engagements

• Adoption of and Compliance to AFRI Fuels roadmap - ECOWAS: AFRI-5 by 2025, African Union: AFRI-6 by 2030
• Publishment of operational guidelines by regulators – importation license etc.
• Market / trade environment surveillance systems

• Promote standardized HSEQ

systems and best practices.

• Periodic risk assessments
• Promoting safety culture
• Asset integrity tests
• Employee training
• Emergency response guidelines

• Transparent Financing

• Improve transparency and accessibility of foreign exchange

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Execute – The day after

• Risks Identification

• Price volatility
• Increase in customer expectations.
• Hoarding
• Adulterated products
• Inflation of commodities

• Risks Mitigation

• Palliatives – public transportation & Agro transportation etc.
• Plan for net zero
• Increase supply
• Transparency and effective communication
• Increase economic opportunities
• Better infrastructure

• Regulatory Enforcement and monitoring

• Market monitoring
• Antitrust enforcement

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Evaluate/Sustain – The future

• Increase investment in cleaner energy sources – Energy transition

• Less diesel, more jet fuel
• More petrochemicals: ideally at 75% olefins, 25% aromatics
• Natural gas, LPG (206 trillion cubic feet of gas reserve in Nigeria)
• Renewable energy – Solar: According to the Nigerian Meteorological Agency (NIMET), Nigeria receives an average of 5.5 to 7.0 kilowatt-hours (kWh) per square meter of solar radiation per day, which is equivalent to approximately 1,900 to 2,400 kWh per square meter per year

• Adoption of Industry best practices

• HSEQ
• Technology
• Processes

• Consumer Protection

• Consumer and Environmental protection laws
• Price controls and

regulations review

• Quality and safety standards review

• Communication and Education

• Transparency in operation
• Effective communication
• Public education

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Prayers

No further delays

Learning from past mistakes – Naira redesign policy

Gradual removal of subsidy

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Thank You