…New industries may drive oil demand beyond 2050 — OPEC
…Says plans to phase out oil & gas unworkable, fantasy
By Charles Ebi
Nigerian Upstream Petroleum Regulatory Commission ,NUPRC, has facilitated a total of N97bn and $147m to about 102 Host Community Development Trusts ,HCDTs.
The funds, according to the NUPRC have already been remitted by the oil and gas companies in line with the Provisions of the Petroleum Industry Act.
NUPRC’s Senior Manager, Health, Safety, Environment and Community, Mrs. Chidinma Nwabueze, disclosed this at a media workshop organised by the commission.
The Petroleum Industry Act ,PIA, enacted in August 2021, introduced a framework for ensuring sustainable development of oil-bearing communities.
One of its key provisions is the establishment of Host Community Development Trusts ,HCDTs, designed to improve the socio-economic well-being of host communities, promote peace, and reduce conflict in the Niger Delta and other oil-producing areas.
Under the PIA, oil and gas companies operating upstream are mandated to contribute three per cent of their actual annual operating expenditure ,OPEX, from the preceding fiscal year into a Host Community Development Trust Fund.
The trusts are established and managed by community-nominated Board of Trustees, with oversight from the NUPRC.
According to Nwabueze, the funds, which were remitted by oil and gas companies, represent statutory contributions to host communities under the Host Community Development framework of the Petroleum Industry Act (PIA) 2021. She said the NUPRC facilitated the remittances into the designated HCDT fund accounts as of May 19.
“Currently, about 102 HCDTs have received in excess of ₦97bn and $149m as HCDT funds remitted by Settlors into the HCDT fund account”, she said. “Within three years, a lot of the HCDTs will be completing projects”.
She noted that in the past week, the commission was in Bayelsa State to commission 67 completed community projects funded by Renaissance Energy Company Ltd., and in Rivers State for other similar activities.
Nwabueze added that the NUPRC has so far approved 167 applications for incorporation of HCDTs, out of which 146 have been successfully registered with the Corporate Affairs Commission ,CAC. Of these, 102 HCDT accounts have been opened and funded.
She emphasized that the establishment of the HCDT aligns with the NUPRC’s strategic objective of fostering sustainable upstream petroleum operations while ensuring direct social and economic benefits reach oil-bearing communities.
“The HCDT structure entrenches a framework for peace and collaboration between host communities and operators”, she said, noting that timely incorporation of the HCDT is a precondition for the submission of a Field Development Plan ,FDP, and commencement of full petroleum operations.
Although the primary source of HCDT funding is the three per cent OPEX contribution, Nwabueze highlighted other funding streams such as donations, grants, interest earnings, and reserve funds.
Of the total HCDT fund, 75% is allocated for capital development projects, while 25% is set aside for investment and sustainability purposes.
To ensure accountability and transparency in fund utilization, NUPRC has also developed HostComply, a digital one-stop software platform for monitoring and reporting HCDT operations across the country.
“HostComply enables end-to-end tracking of HCDT implementation, from project conception to completion,” she said, stressing the commission’s commitment to fostering peace, development, and shared prosperity in host communities.
Meanwhile, OPEC oil cartel has said Thursday that demand for crude will continue to expand through at least 2050, calling efforts to rapidly shift away from fossil fuels an unworkable fantasy.
In its latest annual report on the outlook for oil demand, OPEC sees global oil demand rising by 18.6% from 103.7 million barrels per day in 2024 to around 123 mbd in 2050.
That rising demand will be “driven by expanding economic growth, rising populations, increasing urbanisation, new energy-intensive industries like artificial intelligence, and the need to bring energy to the billions without it”, said OPEC Secretary General Haitham Al Ghais in his foreword to the report. “There is no peak oil demand on the horizon”, he said.
That forecast puts OPEC, which gathers together a number of the world’s leading oil-exporting nations, at odds with the International Energy Agency, whose member states include many oil-consuming nations.
The IEA said last month that it expects global oil demand to begin to decline in 2030, driven by the rise of electric cars and the shift away from crude to produce power.
The IEA even sees oil demand dropping in OPEC powerhouse Saudi Arabia as it replaces crude with gas and renewable energy to produce power.
Ghais said that OPEC sees growth in oil demand being primarily driven by developing nations, and that fossil fuels still account for around 80% of the global fuel mix, little changed from when the cartel was founded in 1960.
“It has become increasingly clear to many policymakers in recent years that the narrative of swiftly phasing out oil and gas has been seen for what it is: unworkable, and a fantasy”, he said.
The OPEC chief blasted many timelines to reach net-zero carbon emissions as having “little regard for energy security, affordability or feasibility”.
Experts say a rapid phase-out of fossil fuels is necessary if global warming is to be kept to 1.5 degrees Celsius above preindustrial levels.
The United States Energy Secretary, Chris Wright had described as unfair the calls being made by Western countries asking Nigeria and other developing countries to abandon the use of coal and fossil fuel as a way to support the transition to cleaner energy.
Speaking in Washington DC, at the 10th edition of the annual “Powering Africa Summit”, Wright had told African leaders that the Trump administration will not dictate to Africa how it intends to put its abundant resources to use.
Nigeria’s energy transition is a complex but crucial process, requiring policy reforms, investment in infrastructure, and international collaboration.
While renewable energy sources like solar and wind hold immense potential, the transition needs to be carefully managed to ensure energy security, economic stability, and sustainable development.
Nigeria is banking on its over 37 billion barrels of oil reserves and 209 trillion cubic feet (tcf) of gas to boost its industrialisation drive.
Wright argued that the climate change conversation did not rank among the top 10 biggest problems in the world.
He said, “Our goal is that Africa needs massively more energy. Africans will do that. Africans will deliver that.
“The United States is thrilled to partner with you in that endeavour. At least this government has no desire to come and tell you what you should do with your energy system. That, this is good and this is bad. That’s just so nonsensical.
“Let’s look at the United States for a second. We have the electricity grid; we have states where their biggest source of electricity is hydropower. We have states where their biggest source of electricity is oil. We have lots of states where their biggest source of electricity is coal.
“Most states, their biggest source of electricity is natural gas. But it’s different across all of our states. There are different resources there. There are different needs there. There are different degrees of an economy that’s decided by people in marketplaces.
“Africa has enormous natural resources and we’ve had years of Western countries, including my own, shamelessly saying, don’t develop coal. Don’t develop coal. Coal is bad. That’s just nonsense. Hundred percent nonsense.
“Coal has been the largest source of global electricity for a hundred years. Coal transformed our world and made it better, extended life expectancy and grew opportunities. And coal globally will be the largest source of electricity for decades to come. That’s not a policy. That’s not a desire. That’s just a reality”.
