Nigeria as an oil producing economy should move from producing oil as a source of income to producing it as a source of energy to aid industrialization, which would in turn secure the future of oil and gas industry.
This was the submission Austin Avuru, CEO of Seplat Petroleum Development Company in a keynote address at the second edition of West African International Petroleum Exhibition and Conference (WAIPEC) in Lagos on Wednesday.
He said despite Nigeria being a major producer of crude oil, importation of petroleum products from western economies is solely relied upon as the means of energy generation, which consumption is still low on the continent.
“A lot of African countries including Nigeria import their petroleum products and it is not necessarily from nearby African countries, but from Europe. So when there is discovery of oil in Uganda, the immediate discussion is not about solving Uganda’s domestic energy problem, it’s about building thousand kilometers of pipeline so that the crude oil can get to the export point which then goes to the refining countries in Europe and then the refined products return,” he said.
He cited the positive correlation between GDP and energy consumption, saying energy production does not grow GDP as much as energy consumption, adding that energy consumption in Nigeria is still very low, which in his estimate would increase by 88 percent in the next 20 years.
“Africa will eventually emerge as a significant demand center for energy if we can effectively domesticate utilization of fossil fuels to produce energy,” he said.
“If we can effectively embrace domestic utilization of our fossil fuels, we build industrialization of our economies”.
He then noted that it is a common occurrence everywhere on the African continent where the discovery of crude oil attracts high level of foreign investments with much spent on foreign consultants and capabilities rather than on the local content.
He noted that Nigeria is on the right path as government is providing right policies to encourage investments from local private investors and in providing the right space for increased demand in the coming years.