S4 Ep. 274 When A Nation Becomes Its Own Energy Investor

SPEAKER_00: Good morning. Good afternoon. Good evening. And good everything. Wherever you are on the surface of the earth at this very instant, listening and seeing me. How are you? Welcome to the World Cafe Live Show. I'm fine, excited. Beginning a new season within this space. I always look forward to coming into this space to discuss some amazing topical issues that borders on practically everything. If you've been following, you will know. So today, what are we going to be doing? So I'm making reference. You must have seen the video, you know, making reference. We had this uh shoot. That was in 2024 on the history of oil and gas exploration in Nigeria. You know, when you ask people, they will tell you, okay, oil and gas started in Nigeria, you know, 1957, 58, or Louis Bri and all that. But that video revealed where it all began from, even after the First World War. SPEAKER_01: Yes, we did a lot of that. SPEAKER_00: You know, on that video to like look at what has happened since the last time we made that video. Not even talking about 50 or 100 or 70 years ago, as the case may be, you know, uh, but what has happened, and I try to put some things down. So this episode will be more of like reaching out and sharing what has happened since that time. And a good number of us within this space, Nigeria, to be precise, we we know our mainstay is oil and gas, but we don't know the inner workings. And somehow we miss out. And we we we we operate from the point of ignorance, we don't operate from the place of knowledge. So even when we want to assert ourselves, it comes from the point of brute and not knowledge, and you are not listened to, you're perceived as come on, one local champion who doesn't know what is happening. But I think if you get yourself acquainted with this, you will be, should I say, informed, and your energy will be exerted, you know, uh wisely. So I'm gonna look at it from four perspectives, four points. Is it four or six now? There's a lot of them here anyway, but we're gonna look at them. There are about six of them, then we will uh look at the in-betweens. What has happened since 2024 when we had that video on oil and gas exploration in Nigeria? So we have had things like renewed investment, confidence, and major projects. We've had things like policy and reforms, we've had the gas sector have a refocused gas sector, local producer rise. We've had infrastructure and refining moods, we'll see all of that, you know, persistent challenges and what have you. So now let us look at it from the very beginning. You know, so Nigeria has seen a resurgence in financial, I mean, uh, decisions as it has to do with final investment decisions, what is called FID, you know, totaling billions of dollars in upstream oil and gas projects. You know, this is a good signal. You know, it points to a renewed investor confidence, you know, thanks to policy reforms. Now, in this last, as of the last time we did this video, we've seen uh companies like Shell, you know, we you remember in that story it was called Shell Darcy, you know, a$2 billion gas development. Did you hear that? $2 billion since the time. H1 gas project, you know, offshore Nigeria, you know, feeding gas into the Nigerian LNG train seven expansion. Yes. So LNG is, you know that, liquefied natural gas. We have the N LNG, Nigeria, liquefied natural gas. You know, Nigeria is more of a gas nation, as we've come to understand. Our gas profile is pretty globally speaking, it's up there. So LNG is one place where we harness this and uh use for so many things. Then we have the major indigenous energy group, like we've we've seen groups like the Renaissance. Yes, they bought over Shell's offshore, sorry, onshore assets. I beg your pardon. You know, they announced a$15 billion investment plan across 32 oil and gas projects, including expanded production, you know, and gas infrastructure after after acquiring shells onshore assets. You hear that. So, what does it mean? So, international and local investors are increasingly sanctioning projects, especially gas developments, after several years of slowed capital commitment. Now we have the policy change, policy and reforms driving growth. So the Nigerian government, led by uh President Bolahmed Tinibu reforms, you know, example presidential directive designed to improve fiscal terms and reduce red tapes, is credited with improving competitiveness and attracting investments. Yes, I really want you to listen. Like I told you on this show, we bring a lot of things that seemingly you don't know that is important to you. So, according to the government and the advisory reports, reforms attracted an estimated 5.3 billion in upstream investment in 2025. That's huge. So, what's the trend? We have a policy clarity and quicker approvals seem to be reversing stagnation and boosting investor confidence compared to past years. So when you when you look at this very, very well, approvals within the oil and gas space, there are so many players. You know, but one major player that is a determinant factor to progress are the regulators. Like when you look at the upstream, you you hear names like NI NUROPs, you know, that's uh NMPC. Former, we'll call it uh what's that word now? We used to call them, you know, then you have the midstream. So they are regulators. And in doing business, whenever you you come across or come in contact with the regulators, you have this mindset of resistance and all of that. But we're seeing that dissipating, reducing, you know, where the regulators are beginning to like, as we saw there or heard, take away the red tapes. And we're seeing, you know, approvals being uh coming on the back of all of the projects in record time. And this this this is a good sign for investors. Another regulator you see again within the oil and gas space is the uh the Nigerian uh the NCDMB as we call it, they are more sad. I mean, sadly with the responsibility of uh ensuring that the Nigerian content, if you want to use the word the Nigerianization, if I want to use that, you know, within the oil and gas increases in percentage in terms of manpower, in terms of uh machine, in terms of uh money, as we call it. Yeah. So we've seen all of that. So the gas sector focused on growth engines. So Nigeria is pushing gas development as a strategic priority. So we see an NPC in 2026, gas master plan. So recently there was this conference that held in Abuja. I was privileged to attend, and uh the Gas Master Plan was talked about. That's the Nigerian International Energy Summit that held in Abuja, you know, and the Gasmaster Plan was talked about. That we're looking at about$22 billion in pipeline and midstream infrastructure to connect reserves to domestic markets, power industry, and exports. So you see, a good number of us, did you hear about that? Did you? Or you were not following. Okay, so gas playing reduction and gas monetization partnership like the NMPC with AirS Energies, you know, the AirS group led by Tony Elumelu. I know we've talked about it on this show. The person called Ilumelu. We talked about him, we talked about the illumination. You remember? Yes. So we have that. So at OML 17, aim to use formerly wasted gas for power, industries, and LPG and CNG. And you remember we talked about it the economic chessboard. We mentioned where some of the key players are consolidating their activities, you know, and one of them is S holding from banking to uh I mean uh hospitality business and now into oil and gas or the energy sector. So you see a lot of this consolidation. So gas now is explicitly as the engine of industrialization and economic growth. You know, it is seen explicitly as the engine for industrialization and economic growth, not just a byproduct. So investment focus has shifted from crude oil alone, you know, toward gas utilization. So we now have local producer rise. So according to the recent industry commentary, we're seeing indigenous companies now produce more than 50% of Nigeria's oil and gas output. That's significant, you know, an increase from earlier years when mergers dominated. The majors here thinking about the international firms. Like if you look at the oil and gas space in Nigeria, say pre- or before 2024 or say early 20s or early 2000s, I beg your pardon. We've seen the majors. The measures here are the international oil and gas firms play a very vital role from Chevron, Mobile, Total, and uh ENI and what have you. But over in the I mean the 2000s, I've come to see a reduction in the onshore space, the onshore assets. We're seeing a lot of divestment in that aspect, you know, where key indigenous players are coming in. So now this reflects this reflects changes in ownership and asset control. For example, Sepplatt, now called you know Sepplat Energy, completed acquisition of major ExxonMobil onshore assets in late 2024, reshaping the upstream landscape. So even the Renaissance, we talked about that, bought over the what have you now, the uh onshore assets of SPDC. We have uh uh we have Oando, who has bought over some of uh ENI's onshore assets and all that. So we see this indigenous mix, you know, players coming into the space, even as old and yes, recently we heard about that acquisition. I think it was 20% now, or how many of the JV, you know. So we also see now Dangote Refinery, the Africa's largest, Africa's largest, is you know, operational, contributing to reducing Nigeria's import dependence. So domestic petrol production continues to ramp up. Recently, we've been seeing the back and forth. We're happy, we're happier. Let me put it that way, because now the petroleum pump price, as PMS pump price at the gas stations, is no longer, it's not steady. Today you come, they tell you it's 800, tomorrow it's 700, the other day it says 500, it keeps going up. So it is because of it's oscillating. I think it's because of what Dangote has done. So the space is beginning to see uh what I call it a fair play. That's my opinion, anyway. A fair play of price, and you see the price, the supposed price war. So sometimes when you drive out on the streets of Abuja, if you see a particular uh fuel station that has a very long queue, I won't mention their names. I'm not promoting anybody here now, but you know, you know the name I'm talking about. When you inquire, you see that oh, the price there is cheaper. Oh, the quality of the fuel there is what blah blah blah. It is got it from Dangote refinery and all of that. And recently I read, I think yesterday or today, you know, I read about African countries that are now planning to come pick up petroleum products from the Dangote refinery. So that is a whole change, you know, in the mix. So NMPC you know talks with a Chinese uh partner to re-establish state-owned refineries aiming to finally improve output performance after years of uh underutilization. Those are our refineries. So we're beginning to see like, okay, what Dangoti has done is now jolting in a good way the economy and everybody, I use the word everybody carefully, those who are in the that oil and gas space are waking up to see that there's a potential we can do this as a people. So let us wake up, let us rise up to this reality. So we now see persistent challenges, you know, pipeline gaps and infrastructure shortfall remain major issues limiting both gas and oil targets. So during the Nigerian International Energy Summit, some guy from I think NMPC, you know, on the panel talked about the pipeline across Nigeria, which a lot of us did not know. And when he talked about it, he said Nigeria is properly wired from the north to the east, from the west to the south. And when he gave the pipeline infrastructure and how it runs, I think one of his senior colleagues uh came to like give some clarification on how time and uh inactivity has taken over most of these pipelines, and we now have uh facilities built on them, you know, and all of that. But Nigeria is well connected in terms of pipeline, but we have this challenge. So funding and financing are still bottlenecks. You know, sectors leaders openly say Nigeria needs new financing approaches to hit highest oil production targets. Illegal bunkering is still a problem, you know. Illegal bunkering related disruptions continue to affect production areas. For example, pipeline attacks, you know, though that's not, you know, though that's a broader ongoing security risk, not specific. It's not just specific that has been happening. But this is what I want to point out at this point, at this juncture, rather, it's that there's an opportunity for us as a people. When we look at the pre-colonial, you know, the oil and gas story of Nigeria has been the key players have been the colonial masters, as it were, calling the shorts and all of that. But now we're beginning to see that they are also shifting from taking responsibilities, more or less passing it on to us, Nigerians, to take our destinies more or less into our hands. And we begin to see that. So it is a challenge on us to wake up, to come up with those solutions that are made in Nigeria but globally appealing. So showing forth excellence and what have you. So you we we we have to look at it wisely. We have to look at it wisely. Now, the investment climate. Let's talk about it. So from July 2024, we've had investors, you know, still testing the credibility of post PIA. What is PIA? You want to know what PIA is? Okay, we'll help you with that. PIA has to do with the Petroleum Industry Act. You know, there was a time where most of the activities in the oil and gas were outsourced, were foreign. You know, so two things happened. The Nigerian content, simply put, the Nigerian content, I talked about it earlier, the NCDMB, how to increase the Nigerian, the made a Nigerian portion in oil and gas. Let me put it in that term so that you will appreciate it. You know, so three things define this space. Three M's money, man, and machinery. Yes, the oil and gas. Money, man, and machinery. And before now, these three things, 90% were outsourced, more or less like were foreign, brought in. But as we built and grew capacity, it I mean, it's now clear that we can do certain things ourselves, not outsourcing it. So that brought about the NCDMB, what we call the Nogic D Act, and also the PIA. So I'm only giving you this so that you go back and study and read and know more about your country. So these two uh acts empowers or creates the opportunity for Nigerians to grow in the oil and gas space to own. Because when you have raw materials and you take them out, value added and brought back, you know, it inasmuch as you you own, quote and unquote, the raw material, let me tell you the truth: 60% of the value added is not yours. So imagine what Dango 2 is doing. The crude is made in Nigeria, the the PMS is refined in Nigeria, the AGO is refined in Nigeria. So now, do you see the value chain? So it brings back money into the system, it helps local uh industries to also grow, you know, and all of that, and that's what these acts are for. So we need to sit down policy-wise. I'm talking about to you now, my audience, and all of that, not to wallow in ignorance, but to put yourself out there and understand the dynamics so that when you are presenting yourself, you present very well. So, like I said, three things define this space: money, man, and machine. You know what money is. Man is capacity, manpower, machines, machinery, what we use, the machines we use and all that. And if you look at it, most of them are not made in Nigeria, they are imported. But imagine if somebody like Innocent starts producing equipment for oil and gas, you know what that means. Then imagine when we increase our human capacity, we capacitate our humans, you know, empower them to take care of certain activities. So it means that the the foreign, hmm, the foreign interference, if I must use that for bad lack of better expression, is reduced and decision making is proper and all of that. And you come to see that we are handling these things professionally speaking. And that's what it's all about. Sincerely, that's what it's all about. But if you don't Have this understanding, and somebody tells you, and you come to believe in a lie that you don't have the capacity to run this space. Says who? So remember the economic chess board of Nigeria. Go listen to that episode. You will see it. So final investment decisions, FIDs, were slowed, you know, and cautious, especially offshore. We don't have a lot of capacity in offshore. Offshore simply means, you know, when you look at, okay, let me try to describe it for you. Onshore are land assets. You know what an asset is? You know, something of value. If you look at your English word, something of value, that's an asset. It has a commercial value. So oil is an asset for us. And to every nation that has oil is an asset. So we have land asset, you know, oil that is on land, where you access it, land, like land. Then we have what we call swamp. Swamp is made, you know, you have water but marshy and all that. I'm using terminologies that you will appreciate. Then offshore is talking about off-coast, deep into, let's say, a hundred or more kilometers into the sea. If you look at our technology, we're really not, we've not built capacity in that to that level. But again, you know, I tell myself, we have a history of fishing. Our great-grandfathers were fishermen. They understood the coast so well. Tide, current, you know, how the water flows and all of that. So we need to also begin to tap into that. So for now, we don't. But most of the land assets, like I said a while ago, the IOCs, the international oil and gas firms have divested. So we have indigenous firms who are now in the space and taking charge of it. I mentioned their names a while ago. So that's it. So we be where we're beginning to see changes in the oil and gas space for good. So Nigeria has recorded multiple upstream and gas-focused FIDs as a final investment decisions, you know, reversing years of delay. Policy clarity under the present administration has materially improved uh deal timelines. Capital is slowing, flowing more confidently into gas than crude. You know, the the somebody will ask, why is that? Why do we have more into gas and not into crude? Well, the ideology which has been in the last say 20, 30 years about clean energy. Gas is a clean energy. Its uh level of um uh impurities and pollutants cannot be compared to that of crude. So energy, the just energy transition being talked about. Gas is one of the uh what I say fuel that is being promoted as a fuel for the future, added to renewable energy, you know, the wind, the solar, the water, and all of that. Am I boring you? I don't think so. Well, we're in class now. So gas has moved from rhetoric to uh strategy. So you see gas as a transition fuel was mostly aspirational. I just talked about it. But now you have infrastructure gaps, you know, pipelines, processing, offtake, you know, limited serious monetization. So domestic gas supply remained unreliable for power and industry. But now gas is the centerpiece of Nigeria's energy strategy. So you even see politically speaking, where the oil and gas, uh the ministry of petroleum has been divided. You have Ministry of Petroleum State Oil, Ministry of Petroleum Gas, as a Ministry of State gas. So you have this dichotomy now within the uh even the petroleum ministry. So we have now a dedicated stream for gas, as it were. So gas is a centerpiece of Nigeria's strategy, offshore gas projects feeding Nigerian LNG train seven. So aggressive push for domestic gas utilization, power, CNG, LPG, government operators are aligning fiscal, regulatory, and infrastructure incentives. So the the shift here is gas is no longer treated as associated value. It is now the product. So we now have indigenous producers. They are no longer emerging. You know, before now you had uh asset divestment by SPDC Shell, ExxonMobil, and others were still being you know absorbed, you know, concerns aligned around financing, capacity, technical debt, operational resilience. But now we have indigenous producers control about half of Nigeria's oil production. You heard that. Indigenous producers. And I mentioned their name earlier, you know, companies like Seplat, Energy, and others. They you know they stabilized output, invested in gas processing, improved asset uh uptime. Indigenous players are now systematically important, not transitional. You heard that. So the meaning here is that Nigeria's oil future is now locally anchored and not IOC dependent. You heard that locally anchored. It is made in Nigeria, refining from hope to partial reality. Then, Nigeria still imported most refined petroleum products. State refineries were largely symbolic. The Dangote refinery was anticipated, but not yet fully trusted. Now, now we're doing comparison. We have the Dangote refineries operational and supplying products. Import dependence has reduced, though not eliminated. So NMPC is re-engaging foreign partners for state refinery. I mentioned that, you know, rehabilitation. I mentioned that a while ago. So reality check, refining progress is real, but logistics, pricing, and distribution remain our big challenge unresolved. I talked about it, you know. So production and infrastructure, the persistent tension, then oil production struggled below potential due to theft, pipeline vandalization, the third mainstream infrastructure decay was openly acknowledged but underfunded. Now, security interventions and monitoring have improved stability but not eliminated risk. Gas pipeline expansion remains the single biggest constraint. I talked about it earlier on growth. You know, when the the the the the man from NMPC talked about Nigeria being wired properly, financing infrastructure is now the core bottleneck, not policy. So uncomfortable truth. Our challenge, you know, as a people is no longer what to do, but how to pay for it fast enough. Do you hear that? It's not what to do, it's how to pay for it. So the big picture, let us look at the big picture here now. The big picture. Uh, from the narrative, Nigeria is trying to fix its oil and gas sector. So, reality, Nigeria has fixed the rules. That's in 2026. Now it must scale execution. So the conversation has matured from policy to uncertainty to execution pressure, from IOC dependency to indigenous responsibility, from oral obsession to gas-led pragmatism. I felt to do this because we owe ourselves that responsibility to talk to ourselves. SPEAKER_01: You know, sometimes you come to ask, where does change come from? Who will save us? SPEAKER_00: Sometimes you don't think maybe somebody, somewhere, a group of people will come. SPEAKER_01: Well, I don't think so. SPEAKER_00: We will be our own savior. If you understand what I mean by that, we will save ourselves. Because that thought, I always share it when I have the opportunity to. Our mainstay is oil and gas. We've had a long history of over a century, yeah, over a century, rich history of energy, oil and gas, for sister, and all of that. So it is time for us to take our destiny in our own hands, maybe, but it's time for us to take our future, rise up to that responsibility. You know, where do answers come from? How do answers come? You must ask yourself that question. And one thing that divides the miracle worker and globalization is how how you know how to get it. It's not easy, but you are ready to discipline yourself, you're ready to do the work, to do the job, to create that value that will push in the current of wealth towards you as a person or towards you as a nation, and that's what we need to do. And that's what I came to do on the show today, just to enlighten you. Yes, as a Nigerian, you're in diaspora listening, you're in country listening, this is what is happening. So let us look at the next 50 years. Imagine the next 50 years. What do you think will happen with all of this laid out? What do you think will happen if we relapse, if we relax, if we rest on our oars, or if we heighten, strengthen, build on what we have presently. Well, your guess is as good as mine. So it's going to take all of us as a people, as a group, to put our hands together, you know, and make this work. That is why I came to do the follow-up on this. Okay, then I think I have spoken enough. Or I have spoken, you know, one of those things. Go ahead. I am super excited. Is that okay? It's okay. I have to run now so I could go prepare myself for you know another episode for you. Well, you know how we do it on the show. We are available on all the social media uh outlets TikTok, Facebook, Instagram. Yes, on LinkedIn. We have a YouTube channel. Have you subscribed? Go ahead and subscribe. Hit that notification button so that whenever episodes like this drop, you will be the first to catch it. SPEAKER_01: Alright then. Till I come here again. My name is Amakri. Amakri is away.