Chairman of Seplat Energy Plc, Dr ABC Orjiako, has blamed the non-coordination of the energy transition for the rise and scarcity of energy products.
Orjiako who spoke as a panellist at the 2021 Milken Institute Global Conference themed “Charting a New Course” noted that the best way to achieve an easy flow of energy transition is through collaboration while leveraging on technology and innovation.
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The Milken Institute Global Conference is an annual convening of global leaders in government, finance, health, academia, industry and philanthropy.
“We must develop a coordinated and coherent approach to energy transition with the specific needs of several geographies in consideration.”
He further stated that the massive withdrawal of funding for fossil fuel projects has led to a market imbalance where every slight rise in demand comes from a sharp increase in commodity prices “as seen in the recent uptick in the price of coal.”
“There must be a balance between net-zero /carbon neutrality and energy poverty in Africa and much of the developing world.
“To put this in context, in Nigeria, over 60 per cent of the population has no access to electricity and relies heavily on biomass and kerosene for cooking.”
He also said Nigeria cannot afford to not utilize its over 200Tcf of gas reserves in the bid to address the UN SDG7 as it pertains to universal energy access. This gas reserves will leapfrog the transition.”
While responding to Seplat Energy’s timeline for Energy transition and how he sees this happening, Orjiako said: “I think one of the biggest challenges in Energy Transition is the continuous discordant tunes that are being sung across the world.
“The recent bull market experienced in the commodities market particularly with oil and gas is due in part to the uncoordinated planning of the pace of Energy Transition.
“The real message is that net zero emissions does not equate to zero fossil fuels.”
He further told the teaming audience that massive withdrawal of funding for fossil fuel projects has led to a market imbalance where with every slight rise in demand comes a sharp increase in commodity prices “as seen in the recent uptick in the price of coal.”
On whether it is possible for the oil price to go towards $100 per barrel (/bbl) given the recent demand surge and the example scenario where coal plants cannot sustain demand in China, for instance, he said: “It is a possibility that oil price will go beyond $100/bbl in the near term”.
“The bull market is not isolated and oil prices will experience volatility in the long term. The phenomenon of Energy transition has been around for a while – e.g. the transition from coal to oil and then to gas.
“Energy transition in the past typically took about 100 years and keeps evolving over time.
“The current energy transition push is mainly driven by climate change and the urgency of now; however, it will not happen overnight,” Orjiako further said.
