The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe has stated that the global energy transition program would affect Nigeria’s Gross Domestic Product (GDP), which currently stands at $477.39billion for 2022.
It said this is because the economy depends largely on the revenues from the oil sector.
He spoke while delivering his Keynote address at the Energy Year Nigeria 2024 annual book launch themed ‘Innovation in the Nigeria Oil and Gas Upstream Industry: A Catalyst for Growth and Development in Nigeria Economy’ in Lagos on Thursday.
He said “between 2014 and 2022, about 74% of Capital Expenditure (CAPEX) has been lost due to defunding of fossil fuel.”
According to him, the defunding of fossil fuels impacts negatively production with direct implications on the federation revenue for an oil-dependent economy like Nigeria.
He said one of the challenges posed by energy transition is the expensive and low availability of requisite technology that will power the renewable energy system.
“This implies that renewable energy might not be easily accessible and affordable to many in the developing and some other developed countries, leading to energy gaps in such climes,” he said.
Also, he said lack of consensus on how fast the transition should take place, in part, because of its potential economic disruptions has also become an issue in the energy transition advocacy.
He further noted that there is a sharpening divide between advanced and developing countries on priorities in the transition with potential obstacles to expanding mining and building supply chains for the minerals needed for the net-zero objectives.
To address this he said Nigeria could optimize the value chain of her crude oil by developing its domestic refining capacity with multiplying effect on the midstream derivatives.
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