Total Exploration and Production Nigeria Limited has stated that apart from environmental and societal pressures on the global oil and gas industry, issues around insecurity and uncertainty in the fiscal and regulatory environment have contributed to the difficulty in accessing fundings for oil industry projects in Nigeria.
The Executive Director and Chief Financial Officer of Total E&P Nigeria, Mrs Tai Oshisanya, stated this in a presentation she delivered at this year’s Oloibiri Lecture Series and Energy Forum organised by the Society of Petroleum Engineers (SPE) Nigeria.
Oshisanya, who spoke on the topic: “Environmental, Social and Governance (ESG) Dynamics and Industry Projects Financing – IOC Perspective,” noted that such challenges had resulted in the “loss of new investments in the industry and difficulty in obtaining funding for projects”.
According to her, not only do new projects require low carbon emissions, they must also be profitable with favourable fiscal terms that preserve value of present assets and assure future investments.
“Capital is not static – it drifts to where there is stability and certainty. Nigeria has to be competitive,” she stressed.
She said, therefore, the industry welcome government’s enthusiasm to pass the Petroleum Industry Bill, (PIB) into law this year, noting that it was vital that the bill provides the stability needed to attract adequate funding for new investments, particularly in Deep offshore and gas development sectors.
Oshisanya, however, acknowledged the adverse impact of the COVID-19 pandemic on the world and the energy industry.
She said Total had adapted to the new reality through staff dedication, strict cost considerations, robust planning, among others, adding, “We have been able to keep our operations running smoothly and growing our production levels.”
The CFO, however, stated that the global energy landscape was changing dramatically, occasioned by a drive for a cleaner environment and a commitment to reduce the risk and impact of climate change.
She said the Paris Climate Accord, adopted in 2015 by World Governments, which came into force in 2016, pledges to limit global temperature rise to two degrees Celsius above pre-industrial levels and preferably to 1.5 degrees Celsius.
Noting that it was estimated that about 10 billion people worldwide would need access to energy by 2050, which represents about 50 per cent increase from today, Oshisanya argued that the industry was hereby presented with two targets – growth in energy demand and a climate change commitment.
She emphasized the need for the oil and gas industry to respond with a cleaner, efficient, affordable and sustainable energy mix as the world was seeking a cleaner environment by reducing greenhouse gas emissions,
On the back of that, she described Total as a leader in the ongoing broader energy transition, pointing out that the oil major had taken remarkable steps and initiatives to reduce its Carbon Footprint.
She added that the company had equally “set an ambition of a ‘Net zero carbon emissions by 2050′ or sooner across our worldwide activities, both direct from our operations and indirect emissions from third parties linked to our operations. This includes all emissions.”
She revealed that Total was also targeting a 60-per cent reduction by 2050 in the average carbon intensity of energy products used by Total’s customers worldwide, adding that its projection for 2030 was to supply a third more energy than in 2015 but with fewer emissions across its worldwide operations.
“This transformation will see accelerated investment in carbon sinks, biofuels, renewables and cleaner fossil fuels”, Oshisanya noted.