Nigeria’s changing upstream sector

Nigeria

James Edet, president of the Nigerian Association of Petroleum Explorationists (NAPE), talks to The Energy Year about changes the association hopes to see in the Nigerian energy industry and the impact the energy transition will have on the country. NAPE promotes the continued success of Nigeria’s oil and gas industry through conferences and training.

How would you describe NAPE’s activities?
NAPE is the largest association of petroleum industry professionals, especially geoscientists, in Nigeria. We are a not-for-profit professional association with a focus on advocating for progressive policies, educating our members through knowledge-sharing events and creating opportunities for business collaboration and advancement through networking events. Our members’ categories cater to professionals and organisations across the industry and academic communities.
We currently have seven chapters, six national and one international. Across our chapters, we curate several industry events monthly. They include business and knowledge-sharing sessions, short courses, mentoring programmes and contributions to several private and public industry activities.
Thanks to our member organisations such as the IOCs, NOCs and industry professionals, we collaborate with our registered partnering institutions to enable teaching and support channels from the industry through the NAPE Foundation and University Assistance Program (UAP). These are ways we continue to support and build the pipeline of future explorationists and uphold professionalism in the industry.
Our flagship annual conference event remains the Olympics of the oil and gas industry, and this year’s event will take place in Lagos, Nigeria, on November 14-17, 2022. NAPE is the platform for the oil and gas sector and academia in Nigeria to discuss and resolve industry challenges while creating advancement opportunities for its members.

What are your aspirations for Nigeria in the coming years as president of NAPE?
A crucial aspect for our country, Nigeria, is to overcome its export trap by enhancing its petrochemical refining capacity. This will increase our financial and economic development gains from oil and gas. It will also solve socioeconomic problems of unemployment and open our borders for more value-adding supply chain activities.
At NAPE, we continue to advocate for the creation of an energy bank that will put in place a system to raise capital for both exploration and production of oil and gas and extend it to renewables. This idea is gaining ground, and policymakers will have to look at the logistics behind its concrete, efficient and effective functioning, but we deem it important that the idea is set into motion.
Another aspiration is to see the Nigerian energy industry become a catalyst for the electrification of the country. We have greatly undermined and taken electricity provision in our nation for granted. The electricity issue, or lack of it, has created huge challenges for our growing population, as most citizens have to cope with generator sets and their attendant noise and environmental pollution and exorbitant or prohibitive fuel costs to provide electricity for themselves.

What kind of changes do you see the Petroleum Industry Act (PIA) bringing to the industry?
The PIA is about refocusing the industry. One aspect is the creation of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), as well as the merger of various smaller regulatory entities. With this re-orientation, regulatory tasks and operational management become more specialised, as with the clear distinction between the NUPRC and the re-engineered NNPC Limited.
With this, we can expect more efficient asset management systems, and an example is seen with Waltersmith Petroman Oil Limited leading the way with its modular refinery alternative. We expect to see players getting more comfortable with the PIA upon full implementation, taking action and triggering more value creation within the industry.

What conclusions can you draw from the bidding rounds for local actors?
The bidding rounds clearly highlight the importance of understanding the operational peculiarities of the Nigerian upstream industry. Some of NAPE’s corporate national company members, such as Niger Delta Petroleum, Seplat Energy and First E&P, to name a few, continue to brave the challenges to be the success stories. However, a lot still needs to be done. Financing remains a challenge, and that is why, at NAPE, we will persist with our advocacy for an energy bank. Additionally, there is a need for more transparency and open communication in the bidding process. This way, new bidders are relieved of assumptions or
biases, not forgetting the opportunity to learn and collaborate. To this effect, we are planning a divestment workshop on July 21, 2022, to answer some of the questions around asset sales and the challenges and opportunities surrounding it. More details on the divestment workshop are available on our website.

How do you see the energy transition coming into play for the industry?
It’s a long game. Previous transitions, such as from coal to crude oil, took time, as accompanying technology also needed to be developed.
This also applies to homegrown technology, so it will not be fair to compare our local industry situation to what happens in the European nations, for example. As desirable as it is to move from one kind of energy to another, it is important to realise that not everybody will be capable of moving at the same pace. Approximately USD 1.3 trillion will be directed towards this market by 2050, which is basically money that will leave the fossil fuel industry, but we know it is the right direction to take. A just transition remains our nation’s strategy.
To achieve this, our education system must also experience the shift. Younger generations in STEM (science, technology, engineering and mathematics) need to be taught about the relevant technological advancements and learn in a more hands-on way as opposed to just learning theories. One way is to create or redefine learning to be where students spend 60% of their time practically conceptualising, designing and constructing rather than just memorising theories and textbooks.

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