As the world shifts away from fossil fuels, the African Refiners and Distributors Association (ARDA) is concerned that funding for oil projects in Nigeria, worth over $160 billion (N67.118 trillion), may be jeopardised.
“Indeed, over $160 billion projects are currently under financial threat in Nigeria’s upstream oil sector, even as the Organization of Petroleum Exporting Countries (OPEC) said oil nations might find it difficult to raise over $12.6 trillion needed for oil and gas investment before 2045,” ARDA said during its Work Group Workshop Series on HSE & Quality.
This roadblock comes at a time when reports indicate that upgrading existing refineries to produce cleaner AFRI 6 fuels with lower sulphur content would cost $15.7 billion (N6.585 trillion).
Already, the continent is facing huge refining, storage and supply deficits, ARDA noted.
Speaking on the ‘Implications of ESG Standards on Global Oil & Gas Project Financing’, the Executive Secretary of ARDA, Anibor Kragha, said attracting funding to Nigeria and other African oil-producing countries may become tougher without strong consideration for emissions reduction, social development and governance.
Kragha insisted that investors must now demonstrate how their HSE and Corporate Social Responsibility (CSR) practices contribute to return on investment and business performance.
He said: “COVID-19 and the war in Ukraine have more than ever highlighted the need for refining petroleum products in Africa.
“We can’t expand our capacity without finance. For us to get sustainable finance we must prioritize HSE.”
The Executive Chairman of Energy & Natural Resource Security Inc (ENRS), Derek Campbell, said Nigeria and other countries have more to worry about on the security of energy infrastructure, especially with the spate of vandalism.
Campbell sees Energy Security Risk & Resiliency Assessments (ESRRAs) as a practise that countries must now prioritise to avert growing dangers to critical energy infrastructure.