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Nigeria And The Road To ‘Oiloibiri’: As Investments In Fossil Fuels Wind Down By 2022, Let Energy Go Renewable

The Oasis Reporters

November 8, 2021

LNG Train 1-3

The title of this piece is inspired by the damning decision taken in Glasgow (Scotland) at the ongoing Climate conference by 25 nations and five development institutions including the European Investment Bank and the East African Development Bank to stop funding new oil, gas and coal projects from 2022.


In dollar terms this means $18billon redirected to renewables which is a massive loss to nations like Nigeria banking on developing gas and becoming a gas hub in the region like Trinidad and Tobago’s strategic place in the Caribbean.

The ‘Killer decision’ to halt funding oil and gas projects especially for old and new oil producing countries in Africa is alarming to say the least coming at a historic time in national history when these nations have their projections on economic recovery from the devastating impacts of COVID-19 anchored on exports from oil and gas. But what has Oilobiri’ got to do with it?

You see, Oloibiri is a small community in Ogbia LGA located in Bayelsa State, in the eastern Niger Delta region of Nigeria. The inhabitants of Oloibiri community are mainly fishermen and farmers. This is the place Oil was first discovered in Nigeria by Shell D’Arcy on January 15, 1956.

Though Oloibiri town was the ‘birthplace’ of oil in Nigeria, it is a sight for sore eyes. The place is under-developed, the people are poor peasants, the epidemic rate is off the charts, the unemployment rate is alarming, and their land has suffered deadly blows from oil spills. The oil in Oloibiri has since dried up but there is nothing to show that it was the place where Nigeria’s oil breakthrough started. In plain terms, it could be said that the town of Oloibiri was used and ‘dumped’ after the oil explorers found no more use for it. The Federal Government of Nigeria once promised to build a museum in Oloibiri, but as at 2 July 2021 that promise has not been fulfilled.

Nigeria is on the verge of becoming the global ‘Oilobiri’ where nations will walk past and shake their heads in pity. We argue here that if the Nigerian nation does no take seriously the announcement by the 25 nations in Scotland, Nigeria’s oil industry with all of todays’ infrastructure in the sector will only serve as a Museum, a relic of a distant era, obsolete technology and economic assumptions and logic.

Nigeria’s President in presenting the nation’s plan to net zero emissions by 2060 like Saudi Arabia is driven by the assumption that gas would drive the new path as a transitory fuel before switching to renewable energy with increased investment in this area sometime before 2060.

The announcement by the 25-nation coalition announcing their plans to halt the funding of new oil and gas projects was like pulling the economic rug from under the feet of our nation and several developing nations reliant on revenues from oil and gas exports.

We note that Nigeria holds over 200 trillion cubic feet of recoverable gas reserves – the largest on the continent of Africa( 1.2 billion cubic feet per day), according to Nigeria’s Department of Petroleum Resources.

Exporting Gas

Nearly half of its production is exported, and Nigeria ranks as the fifth largest liquefied natural gas (LNG) exporter globally. Moreover, Nigeria’s gas exports have remained relatively stable during COVID-19, with approximately 11 billion cubic meters exported in the first five months of 2020.

The Nigerian Gas Master Plan was approved on February 13, 2008 and gone through several reforms currently comprising three key policy Instruments(a) the Domestic Gas Supply Obligation, (b)the Gas Pricing Framework and (c) the Gas Infrastructure Blueprint.

We note that the reasons for the creation of the Nigerian Gas Master Plan is aimed at making Nigeria become a major international player in the international gas market with the intent that the domestic access to energy will be expanded and revenues to finance the budget and support wealth creation will be realized.

While these steps are commendable however as a transitory fuel, Gas falls short in its ability to create access to energy for Nigeria’s population that is projected to be 401.3 million people(, the implication is that it will be unable to address poverty(currently 40% of 200Million people)
(  ) and also unable to promote shared prosperity.

Comparative reflections drawing from the Communiqué of the 2020 Africa Energy Leaders’ Summit and a ‘framework for a globally equitable phase out of fossil fuels'( Muttitt and Kartha (2020) as well as the Sky’s limit publication with the title ‘The case for a just energy transition from fossil fuel production in Africa’, We note the following:

That Gas and indeed fossil fuels fail to deliver on promised development dividends of jobs and energy access. Per dollar invested, renewable energy creates 2 to 5 times more jobs than fossil fuels, and other green economy investments like conservation agriculture, climate adaptation, public transit and energy-efficient building retrofits provide 5 to 25 times more jobs.

Ambitious gas plan…but cooking gas has been priced out of reach.

The Extractive industry in Nigeria employs 0.01% of the Work force ( › Sweet Crude). Both current and planned pipeline and port infrastructure have been designed to supply overseas markets rather than addressing energy poverty in the nation. In-order to achieve the goal of addressing energy access there is the need for huge investment in Gas infrastructures, it would have been more beneficial to redirect this investment to renewables as the numbers have shown us.

Endangering the health, jobs, and environments of frontline communities: Communities near extraction have faced displacement, job losses as farmland, fisheries, or tourism prospects are damaged, serious health conditions, environmental degradation, human rights abuses, and increased violent conflict and militarization. We note the challenges faced in Nigeria’s Niger Delta Region.

Compounding Nigeria’s heightened climate vulnerability.
Locking in risky raw material exports while locking out renewable energy and other green sectors. Continuing fossil fuel development as the industry faces unprecedented global headwinds is undermining Nigeria’s prospects for unlocking these unparalleled solar and wind energy resources.

What should Nigeria as a nation be doing given this ‘Killer announcement’ by coalition of 25 nations and five development banks to halt funding of new oil and gas projects?

Nigeria in seemingly taking the path of Saudi Arabia to use gas as a transitory fuel should go the whole hog in adopting the twin approaches of (a) a gas path and(b) massive funding of renewable energy sector. Saudi Arabia launched a Middle East Green Initiative to secure 39 billion riyals ($10.4 billion) for an investment fund and clean energy project as part of efforts to reduce regional carbon emissions.

Saudi Arabia would contribute 15% of the funds and would work with other states and development funds on the funding and execution of the initiatives. Additionally it has its own Saudi Green Initiative programme that would involve investments of over 700 billion riyals ($190 billion) via its vision 2030 programme offering clean energy solutions.

What this tells us is that in pushing a gas transitory agenda among OPEC countries it is reading the global signs and investing massively in transitioning to a renewable energy path. However Nigeria does not seem to be following the two pronged strategy in a manner that gives confidence. Why have we come to this conclusion?

(a) current funding and ambitions in Nigeria is not sufficient to transition to net zero by 2060.

(b) No current clear nation vision and framework set out by the Federal government of Nigeria developed through robust broad based conversations cutting across vast stakeholders

(c) There is still an attitude of business as usual as Federal and state governments carry on not concerned that the ‘train has left the station’.

Nigeria in the last 60years has been stuck in a fossil driven economic logic with all its associated rentier state contradictions. Nigeria cannot afford to sleep walk in the face of the emerging ‘Tsunami’ occasioned by the planned halting of the funding of new oil and gas projects from 2022 if not for any other reason for the sake of coming generations.

Nigeria must not through poor choices and decisions become the ‘global Oilobiri. The time for urgent bold actions is now!

This beautifully written and thought provoking piece came online in word docs, but the author did not append a name to it. Hopefully when that is done, adjustments would be made.

Greg Abolo

Blogger at The Oasis Reporters.

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