…Harps on overall optimization of the midstream, downstream sectors of the petroleum industry value chain

The Chairman, Society of Petroleum Engineers (SPE), Engineer Salahudeen Tahir, has said the $5 billion African Energy Bank will transform the energy sector in Nigeria, and Africa, in general.

This was as he said it would provide funds to be accessed by interested and qualified African countries to develop their oil and gas sector.

He spoke during a media briefing at the end of the 47th edition of the Nigeria Annual International Conference and Exhibition (NAICE 2024) in Lagos on Wednesday.

The theme of the conference was: “Petroleum Industry Value Chain Optimization: The Inevitability of Midstream and Downstream Development.”

He explained that to ensure sustainability, optimization of the petroleum industry value chain is necessary, and the development of the midstream and downstream sectors plays a significant role in achieving this optimization.

According to him, the midstream sector involves the transportation, storage, and wholesale marketing of crude oil and natural gas, while the downstream sector focuses on refining crude oil into various petroleum products and distributing them to end consumers.

He stated that without an effective, efficient, and vibrant midstream and downstream sector, investments in the upstream become meaningless and that Nigeria’s God-given natural resources will forever remain in its raw state.

He explained that overall, the optimization of the midstream and downstream sectors of the petroleum industry value chain is essential for attracting investments to the upstream, achieving operational efficiency across the value chain, and meeting the demands of the market in a cost-effective manner.

He added that it allows for the smooth flow of resources, maximizes the value of hydrocarbons, and ensures a reliable supply of petroleum products to consumers.

He said: “NAICE has maintained its position as the foremost energy conference in Sub-Saharan Africa. Over the years, the International Conference has provided our partners, sponsors, exhibitors, and conference participants with wide-ranging opportunities to grow their businesses, unveil new technologies, and deepen, as well as expand, their technical capabilities.

“It provides access to the industry’s key decision-makers, the latest industry innovations, best practices, state-of-the-art technologies, and investment opportunities.

“Yes funds are becoming tighter and that was why there was the move to create that African Energy Bank, because we realized that in Europe, they are becoming more tighter and talking more about green energy, environmental, governance and social.

“They want to see that structure and if oil and gas, there are limited funding. Infact there are financial institutions that have pulled out of funding of carbon fossil fuel. Now African countries are coming together to say we are looking at the future and if this thing continues, we may find it difficult to find funds, let us create a bank where all oil producing countries in Africa can deposit funds. If you need to invest here, you will get it. We have been getting funds from Afrexim Bank.

“It has been doing well and it is in Egypt in Africa and it is by Africans. It has been doing well. Talk-less of an energy bank that will come and it is focused on development of oil and gas.

“We need that energy because that is what we have. If we do not produce, and modify the energy- refine it, to the extent that we can use it, then the upstream is as good as gone.

“I can assure you that the future can only be brighter with these indigenous people that are stepping in. You can see Seplat, Aradel, ND Western, etc . They are growing in leaps and bounds. Be rest assured it is a bright future for oil and gas.”

Tahir stated that a robust energy mix is needed for Nigeria and Africa to survive. He added that divestment has provided great opportunities for indigenous companies to flourish.

He stated that there are very competent indigenous companies and highly skilled Nigerians who will provide appreciable services and products in the energy sector.

He stated that there are current innovations, adding that the interest of all players in the sector including consumers should be met for the overall good of the value chain.

According to him, SPE has and will continue to engage the government, regulators and all other stakeholders to transform and make the sector grow more.

Tahir said: “If you have coal, oil, gas, nuclear, solar etc combined, that gives you energy security because if you do not have one today, you have the other.

“But if you have one and it is not in abundance, it will not now be okay. Oil and gas will remain for a very long time. There are no two ways about it.

“Those people that are taking over those assets, if you have a product and I have the capacity to do it, if I do not have the money, and you as an investor, would you not bring in your money because you know that we need that energy to survive.”

He added: “Innovation makes the world going. It is part of our mandate to ensure the innovation out there to ensure that we get cleaner, cheaper, efficient energy for the benefit of all the human race. We have the mandate to encourage the youths of those innovative tools.

“Right from 1975 to this current conference, we have consistently delivered on providing this wonderful package to the oil and gas sector. We are constraining our minds on how we can produce hydrocarbons efficiently.

“We sat at the council to consider that everybody is talking of sustainability, if I am able to produce oil and if I do not have the right pipeline to transport the hydro carbon to a refinery, if I do not have a refinery that will process that crude, if I do not have a gas process facility that would process that gas, if I do not have for instance an LNG facility or a power generation facility to take the gas, if I do not have customers to buy the power and the petrol from gas the filling station, what happens to the producer of oil from the upstream? He will cease to exist.

“We decided to look out of the box of how we ensure that we have a viable mainstream. That means the team involves the pipeline, refineries, storage facilities.

“How can I have a viable downstream? That downstream is about the customers and the producers. Producer, paying for electricity, consumer buying fuel. If I am not selling it at the right price will you buy it, if consumers are not buying, will the guy at the upstream survive?”

The SPE Chairman said indigenous players are becoming more formidable, innovative, enterprising and skillful.

He said: “Will continue to engage politicians, regulators and all stakeholders to ensure the growth of the sector for everybody’s advantages.

.”This year we have witnessed a surge in participation from indigenous players. We have witnessed a surge in sponsorship from indigenous s companies.

“We have noticed that we have more sponsors and exhibitors who are indigenous companies. That tells you that the industry is mature.

“It is moving from all those multinationals to indigenous companies who are trying to offer the same services that the multinationals were offering.”
Incoming President, SPE, Engineer Amina Danmadami, said young Nigerians are dynamic, innovative and technologically savvy. She stated that many of them are acquiring current skills and would become sought after and in high demand.