In light of present conditions, it is anticipated that the need for energy in Nigeria and other African nations will expand during the next ten years, leading to growth for energy firms.
This information was presented at the recent Seplat Industry Lecture and Dr ABC Orjiako send-off event, which took place in Lagos.
The industrialization and population growth in Africa will lead to an increase in the demand for fossil fuels. According to Oliver Onyekweli, Associate Partner and Co-Lead of West Africa Oil and Gas Practice at McKinsey & Company, “The Future of African Oil & Gas: Positioning for the Energy Transition,” the country with the highest energy demand growth will be Nigeria. This will benefit energy providers like Seplat Energy, Africa’s rising energy needs also present potential for Seplat to investigate sustainable energy solutions, such as solar and blue hydrogen.
According to McKinsey, cost leadership and decarbonising production will be crucial as financial providers continue to limit their exposure to oil and gas and customers prioritize lower carbon exports. To keep a “license to operate” and continue having access to credit at competitive rates, it was stated, that assets must be decarbonized as much as possible. “Maintaining cost leadership ($/bbl) will be increasingly important when global oil demand peaks.”
According to McKinsey, which also stated that indigenous producers will determine the future of African oil and gas, International Oil Companies (IOCs) will continue to face pressure to cut carbon-intensive operations and slash production costs, Companies like Seplat Energy are well positioned to pick up producing assets going forward, provided they can maintain operational excellence. Ensuring continued access to talent will be key, it added.
McKinsey further explained, “African energy infrastructure is a compelling opportunity. As the energy transition accelerates, gas will become more prominent as a ‘transition fuel’, especially in Nigeria. Significant domestic gas demand is a positive tailwind for Seplat Energy’s ANOH project and gas’ cleaner carbon profile (relative to diesel) should make gas projects easier to finance (can be paired with Liquefied Petroleum Gas (LPG). Investing in gas export infrastructure (for example, Floating Liquefied Natural Gas (FLNG) could create an opportunity to access a high-value international spot market.”
Dr ABC Orjiako, the founder and recently retired chairman of Seplat Energy, praised all of the company’s stakeholders for the tremendous results that have been achieved since its founding and said that they were the result of tenacity, insomnia, and resiliency.
The year 2022 will signal a significant turning point for Seplat Energy as Dr Orjiako leaves the Board after directing the Company to reach monumental milestones over the last 13 years, including 9 years as a listed corporation, according to Mr Basil Omiyi, Chairman of Seplat Energy.
