Group managing director of Aiteo Exploration and Production, Mr. Victor Okoronkwo, has lamented Nigeria’s heavy reliance on foreign funding for oil and gas exploration and production in the country.
Mr. Okoronkwo said this while speaking in a panel themed “Energy Transition and the Future of Africa”, moderated by the Vice chairman of Platform Petroleum, Mr. Austin Avuru, at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, the United States.
The GMD further said that the Paris Agreement on climate change, coupled with the fact that IOCs are divesting from Nigerian explorations has left the country with increasing difficulties in raising funds for oil and gas exploration.
According to Okoronkwo, Nigeria and most African countries lack the strategy to generate the energy needed in the face of reduced funding for fossil fuel-related projects by foreign financial institutions.
The Aiteo boss said that over 90% of the funds used for oil and gas exploration as well as production in Nigeria come from abroad; adding that the Paris Agreement on climate change had put Nigeria and the rest of the world in a dilemma in terms of where to source funds from.
The oil and gas expert pointed out that compared with the United States where the government subsidizes renewable energy projects, African governments do not have the resources to boost gas production and transition to solar and wind energy.
Also speaking, the discussion panel moderator, Mr. Avuru, said that Nigeria’s oil and gas sector was able to get funding in the past because it provided “energy security for the geographies that provided the funding.”
But he questioned where the most populous African country would source fundings for its oil and gas exploration and production when it has decided not to provide funding for fossil fuel products.
“Now that they have said they will no longer provide funding for fossil fuel projects, where do we turn to?”
According to him, the industry is presently asking “where will the funding for gas production come from, let alone talking about funding for cleaner energy?”
He said that forecasts for the industry predict that by 2040, Africa’s crude oil production “would not be capable of meeting its oil demand,” hence, African leaders need to implement solutions to avoid total breakdown.
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