Oil & Gas in Nigeria: Technology & Renewables as the Drivers of a New Hope for the Nigerian Economy
Industrial revolutions have always marked major turning points in history. Over different timelines, new drivers have been introduced that determined the course of mankind’s progress, from the first industrial revolution (industrialization through steam engines and others) to the emerging fourth industrial revolution (disruptive technologies such as Robotics, Internet of Things, Virtual Reality, and Artificial Intelligence).
The first industrial revolution brought about an increasing demand for energy, in different forms. While this need was initially met mainly by coal and from other sources such as whale oil, kerosene was soon discovered to be extractable from crude oil and used as lighting and heating fuel, thus kick-starting the demand for petroleum-based fuels. It is fair to say that while the dawn of the oil industry is not regarded as a distinct industrial revolution, it acted as a co-driver of the first industrial revolution and played a major role in the ones to come. Consequently, oil has gone to become arguably the most valuable commodity traded on world markets today.
Since the discovery of economic quantities of oil and gas in Nigeria in the 1950s, the industry has quickly evolved into the lifeblood of the Nigerian economy. The transition from the previous driver ‒ agriculture ‒ was swift and uncoordinated. While the petroleum gas industry in Nigeria has perhaps acted as a catalyst for economic growth, with new businesses emerging and hordes of opportunities created for citizens and foreigners alike, it is open to serious questioning as to whether these have been adequately taken advantage of.
“While the petroleum industry in Nigeria has perhaps acted as a catalyst for economic growth, with new businesses emerging and hordes of opportunities created for citizens and foreigners alike, it is open to questioning if this has been adequately taken advantage of.”
A cursory look at countries like the United Arab Emirates (UAE), United States of America (USA), Qatar, Kuwait, and a few others easily highlights Nigeria’s current failures to maximally utilize the true potential of this resource. While in these other countries, oil has provided a basis for developing and expanding other areas of their economies, the industry in Nigeria, unfortunately, continues to present — and be stuck in — its own unique challenges such as mass corruption, militancy, kidnapping, vandalism, oil bunkering, oil spillage and water contamination, natural gas flaring etc.
Countries and organisations the world over are currently pushing for policies, work processes and incentives for the utilisation of cleaner energy. Tesla is creating electric cars, and SolarCity is changing the use of electricity in homes and industries. The USA, UK, France, Canada, and others are all gearing up to impose bans and higher taxes on the use of fossil-fuel-based cars by 2040. Multinational oil corporations such as Shell, Total, and ExxonMobil have begun making significant investments in the Research & Development of alternative energy sources; Shell’s Raizen and ExxonMobil’s Algae Project are amongst the top profile investments. It should be well noted at this point, that the world did not reduce its coal usage because of a lack of coal; but among other reasons, the availability of a cleaner and more reliable source of energy.
Another key deliberation lies with the impact of technology on the oil & gas industry. Artificial Intelligence, Internet of Things, Big Data, Virtual Reality, et al are terms increasingly being used in today’s oil and gas industry. We are already witnessing the technology-driven evolution of jobs in the banking industry through the introduction of banking applications and Automated Teller Machines (ATMs), and how FinTech companies are “threatening” the monopoly of commercial banks in today’s Nigerian financial marketplace. Oil & Gas companies, for a while now, have started recruitments for formerly tech-only positions such as Data Scientists & Analysts, Software Developers, Chief Technology Officers, etc.
With these new drivers (renewables and technology) vastly and rapidly changing the dynamics of the conventional oil & gas workplace, what then does this mean for the future of oil? What should be the aspirations of today’s children studying in school hoping to work for a big oil corporation in countries with economies majorly dependent on the price of oil? Are the current skills possessed by the majority of the workforce in this changing industry still sufficient to help them be competitive in the new workplace? It would seem that the oil and gas industry is facing an imminent threat. Or is it?
According to the IFP School’s Energy Transition Course, “the complete transition from fossil fuels to renewables will take a couple of decades in developed countries such as the USA and UK”. For less-developed countries such as Nigeria, where about 92 million Nigerians live below two dollars a day, according to recent data published by the World Poverty Clock, it might take a few generations. The average Nigerian is still struggling to keep their phones powered on throughout the day, coupled with the fact that the Senate rejected the Electric Car Bill 2019 (SB.726). These simply highlight that while fossil fuels and renewables will be part of the world energy mix, the Nigerian economy, and her oil and gas industry may not be immediately threatened by renewables, in terms of energy sourcing. Still, the impact of fluctuations in global oil prices is one that would continue to swing over Nigeria like the Sword of Damocles, in the absence of stronger, diversified areas of the economy.
Technology is expected to drive the evolution of jobs, organisational structure, and work processes in the oil and gas industry, as seen in other industries. While technology does not currently threaten the industry; the imminent evolution would improve the efficiency of the industry. Perhaps, current skillsets might be inadequate for the future of work; the tech industry might prove to be a trillion-naira industry for the Nigerian economy. It is possible to have an economy driven by different industries, the USA has certainly shown us how — Nigeria, a very blessed nation, has another blessing; technology and renewables have presented another opportunity to properly augment and build on the existing benefits of the oil and gas industry, improving both operational and energy efficiency while helping to remedy our currently failing economy. How can we achieve this?
Governments, policymakers, industry leaders, and educational administrators have to work together in helping to prepare the next generation workforce for the next “Nigerian” industrial revolution. Little steps such as revamping the educational curricula, introducing tech skills acquisition to early school programs, granting tax breaks to companies building environmental-friendly products and so much more. It is known that “technology can empower a generation to create a world without borders and boundaries, a world where anything is possible”. Though we all hope for a better Nigeria, hope is not a strategy. Both the private and public communities must actively bring their best solutions towards solving our numerous problems. Technology can empower us to do this swiftly.
“…Technology can empower a generation to create a world without borders and boundaries, a world where anything is possible”
The Nigerian spirit is one that is reinforced by the opportunities inherent in our human and material resources and beneath all the challenges of the moment, lies the hidden treasure of untapped possibilities; these possibilities can be untapped through utilizing the power of technology, renewables, and oil. The rest of the world is already adapting its industries to these drivers. Where we, as a nation, go from here is a choice that is up to us.
May we get it right, this time.
Writer’s Disclaimer: This article was first written on September 28th, 2019 and that time frame should ideally be the context through which it is viewed.
