The Emerald Energy Institute (EEI), University of Port Harcourt, held its 9th edition of Dr. Emmanuel Egbogah Legacy Lecture Series. It was a virtual event.
Professor Joseph Ajeinka, current Chair of the Emmanuel Egbogah Foundation explained that late Dr. Egbogah was a pioneer lecturer in Petroleum Engineering, University of Ibadan and it is on record that he contributed immensely to advancement of the oil industry in support for education. He endowed many buildings and resources to advance the course of petroleum studies and engineering by investing in higher education across the country.
Ajeinka revealed that Dr. Egbogah was former Presidential Adviser on Petroleum Matters to President Umaru Musa Yar’Adua and has held positions as Adviser in many countries.
In his remarks at the event, Professor Stephen Okodudu, Acting Vice Chancellor, University of Port Harcourt, commended the commitment of EEI for organising the annual conference and remembering the virtues of Egbogah. “One couldn’t have expected more or less because Dr. E as he was popularly known is one of the most profound beneficiaries of the University of Port Harcourt. For every time we have occasion to celebrate him, we find it something of immense opportunity for us as a university.”
Professor Okodudu said the theme of the 9th Emmanuel Egbogah Lecture on conversation around sustainable development was timely. “It is one that has become of global significance particularly given that much of what has an answer to the coalition of the Niger Delta and the world which also have left profound carbon footprint that comes out of the petroleum industry.”
Addressing the audience at the event, Professor Wumi Iledare, currently the Ghana National Petroleum Corporation (GNPC) Chair in University of Cape Coast on Petroleum Economic, who was also the moderator, said Dr. Egbogah groomed a lot of Petroleum Engineers and those who passed through his tutelage have done great exploit in Nigeria and outside the shores of the country. He was a mentor and his legacy on the petroleum industry cannot be eroded.
Introducing the guest speaker, immediate past president of the Society of Petroleum Engineers (SPE) International, Dr. Sami Alnuaim, from Saudi Aramco with over 30 years’ professional experience. Professor Iledare made it known that Dr. Alnuaim worked in different engineering departments of the company. He has been passionate about how petroleum can be used to develop Africa.
Speaking on the topic: The Role of Petroleum in Human Prosperity for Sustainable Development, Dr. Alnuaim, was of the view that sustainability is needed in the current storm due to issues across the globe and the oil industry intends to show the world that oil and gas can be a sustainable, reliable and affordable source of energy.
The role that petroleum plays in the last century has various impact on production of oil and gas under human prosperity including social lives. Oil and gas contribute between 53% and 54% of the energy mix and directly links to all aspect of human prosperity including objectives of the United Nations social development goals.
The direct impact of this is global energy use as well as the United Nations Human Development Index (HDI). A good example of human prosperity in the last fifteen decades is the global spread of mobile cellular subscriptions. The 2019 United Nations human development report shows a positive change in the last ten years in the low- and medium-income level.
Dr. Alnuaim disclosed that the positive change in these two categories are almost 50% increase in low-income class and 60% in the medium income class when it comes to cellular subscriptions. The report also indicated that the 21st century has witnessed big progress in living standard with an unprecedented number of people around the world making great escape from hunger and disease. HDI shows impressive improvement from average.
The global economy and human prosperity were moving in the right direction in what is called 2019 recovered era. Most of the forecast indicated that global energy demand will increase by 1/3 in 2040. As expected by oil and gas, oil will increase by 15%, gas 25% and the combination of both oil and gas by 40% will maintain its huge share in the energy mix about 50%. The world population has also been reported as a mini forecast with 1.7 billion people and part of them in Africa, the lowest continent in energy access. Those forecast shows the necessity for global economy to override depreciation and inflation by the necessity to double Gross Domestic Product (GDP) by 2040.
For the world not to achieve these aggressive goals and close to it without oil and gas might be difficult. Oil and gas is in the right direction to address these demands and recent goals through major investments in upstream, midstream and downstream to recover from downturn. The OPEC plus and non-oil producers created a platform to collaborate and establish more stable oil market in order to improve oil prices.
Dr. Alnuaim noted that challenges that exist before Covid-19, were technical, geopolitical, economic, environmental and cyber issues.
There are plans to address environmental challenges by implementing thorough strategies that will drive the oil and gas industry towards long term objectives of zero carbon emission. Plans to invest in renewables and power for energy efficiency with chemical initiatives to advance oil and gas. For instance, major oil and gas companies can invest in $1billion to develop technologies so as to accelerate energy transition.
The SPE International helmsman said 2020 will be remembered as the year of surprises to operators in the industry where the Covid-19 pandemic was a major threat not only to oil and gas industry but human existence. “No one had the intelligence to predict the implication of Covid-19 as we saw officially.”
“Sometimes, when you sit down for a while and think of what has happened so far you will see the real global picture. The challenge of this virus and its speed of geographical spread with its monstrous implications are alarming.” More than 28 million people were affected and close to 1million died.
Human prosperity, technology advancement and social life that were synonymous with the world unfortunately help to spread the tragedy. It could not have been imagined that 4.2 billion people around the world were affected by partial social lockdown in less than three months in the first phase.
He stated that the world pre-Covid-19 was under energy appetite as the social lockdown started energy demand dropped drastically. Energy demand decline by 6%. This is the problem of 2019 energy demand in some part of world giving an impact of the 2008 financial crisis that caused oil to drop to $25 and 50% of global primary demand was affected. The decline magnitude has no residue in the last 70 years margin. Oil is the largest hit among other sources of energy since it is more related to mobility and transportation sector. But as the decline reached 9% compared to 2019, with the projection in 2020, it is close to 11% or 13%.
As oil resumes, there will be a deeply decline in demand since the outbreak of the pandemic in the first quarter of 2020 followed by 23% in the second quarter with projected improvement in the second half of the year. Although, during the second half of 2020 several countries relax their social lockdown leading to oil drop of 8%. This caused fall in prices
Being an expert in the oil industry, Dr. Alnuaim said he expected oil revenue loss globally to get close to $1trillion by the end of 2020. The oil demand drops because 80% oil of the barrel is consumed by transportation sector which is the biggest hit in recent history including aviation, large vehicles and public transport system. The implication is that future of oil and gas industry is yet to be quantified. But They are potential implications of energy investment.
Before Covid-19, 2020 investment in the energy sector was quite high but after Covid-19, it was 20% loss with almost $370 billion loss in 2020 energy investment. The biggest threat was the Shale oil with $244 billion, power $79 billion, energy efficiency $33 billion, coal $14 billion while conventional oil and gas is not known.
In the long-term nature of the oil business, the impact of this drop will be in the next three to five years. The worst implication is not only on global economy, it has negative impact on human resources. The impact transcends from oil and gas to other industry at large with exception of the medical industry.
People lost their jobs and some governments made efforts to provide incentives for various industries in terms of augmentation.
Response of the Oil Industry
Dr. Alnuaim explained that the first thing the oil and gas industry did was to protect its workers to provide safety either in office or in the field. The safety of oil workers is significant to guarantee continuity since the world still needs energy and its sources. At the peak, the world needs up $20 billion per day as it consumes between 80 to 85 million barrels per day with 100 million workforce that will do the job. “The safety of our people is paramount including business continuity to invest utilizing advance technology for people who cannot travel or go to office.” The industry is to provide materials developing management skills during the crisis. It has realized the importance of basically enriching and enhancing workers skills during the crisis including managing social responsibility.
“Our industry is very important because the world needs us. During Covid-19, the world needs the oil industry three times or more after Covid-19.”
The immediate past President of SPE International said, significant collaboration by non-OPEC countries is needed for feasibility of the oil market and improve balance between supply and demand. “We as industry must continue to address this difference strongly so as to ensure that global energy goal for United Nations is achieved which is energy sufficiency.
The Oil and Gas in Africa
Concerning the oil and gas in Africa, Dr. Alnuaim was of the view that the continent is almost 80% short of the United Nations goals in terms of energy. Oil industry practitioners need to collaborate to change the future for Africa.
He said he was elated about new gas discovery in the north and south Africa. Unconventional energy should be processed with huge investment in renewables to urgently improve energy intensity and prosperity of the continent.
How Do We See the Future?
Dr. Alnuaim was optimistic that there will be increase in demand globally and several forecast show that oil might bounce back in late 2020 or in Q2 of 2021.
“My personal expectation will be at the end of Q4 2021. Most importantly, oil and gas will continue to be reliable and affordable source of energy. Oil and gas will have a bigger share in the energy mix before, during and after Covid-19. It is expected that demand supply of gas will improve in the next three to five years and make up for some of its recent loss.
The industry is being transformed to the new normal. SPE as a body of oil industry professionals have almost 75,000 young professionals and university students with knowledge of IT and communications technologies.
However, OPEC is expected to continue deliberations on the next future putting more stability in the oil and gas industry to attain acceptable oil prices.
Notwithstanding, oil professionals will lead the energy industry to redefine concept of sustainability to sustain energy transition. It will play a major role to make the oil and gas cleaner and more efficient complemented by renewals for positive economic, social and good environment. This is the definition of sustainable energy transition.
He said energy transition does not need much demand since many countries are trying to diversify from oil but oil and gas will be a source of cleaner energy and demand will be more to provide sustainable energy to power the globe and improve human prosperity for an enriching future.
Adding their voices to the role of petroleum in human prosperity for sustainable development, Patricia Simon-Hart and Professor Chudi Ibe made it known that numerous issues around petroleum show that Nigeria still has an option through gas. Gas is an enabler. Therefore, they both opined that efforts should be made for sustainability and human prosperity in the country using petroleum resources.