• ARDA seeks options for Nigeria’s and Africa’s downstream oil sector
• Stakeholders sound the alarm on energy infrastructure protection
Oil and gas experts are concerned about the impacts of environmental, social and governance (ESG) issues on the financing of oil and gas projects, insisting that unless borrowers like Nigeria and other African oil producers do not adapt quickly, securing the necessary financing for the sector can remain very difficult.
Faced with huge refining, storage and supply deficits, more than $15.7 billion (+/- 50%) would be needed to upgrade existing refineries on the African continent alone to produce AFRI- 6 cleaner (10ppm sulfur content), and a clear focus on the ESG contributions of these projects is imperative.
Indeed, more than $160 billion worth of projects are currently financially at risk in Nigeria’s upstream oil sector, even as the Organization of the Petroleum Exporting Countries (OPEC) has said oil nations may struggle to raise more than $12.6 trillion needed for oil and gas investments before 2045.
Speaking on the “Implications of ESG standards on global oil and gas project finance”, the Executive Secretary of the African Refiners and Distributors Association (ARDA), Anibor Kragha, said that attracting finance to Nigeria and in other African oil-producing countries could become more difficult without strong consideration for emissions reduction, social development and governance.
Kragha reiterated that the financing of the oil and gas sector is in a state of transition, a development that forces the closure of traditional sources of capital, in particular the World Bank and other national and international development finance institutions (DFIs). ).
According to him, ESG impacts mean that projects seeking funding must take into account enhanced health, safety and environmental standards with due diligence and reporting requirements, as well as principles of updated Ecuador (EP4), which combine to impact funding costs.
Speaking virtually at the ARDA HSE and Quality Working Group Workshop Series on May 31, Kragha insisted that investors must now demonstrate how their HSE and corporate social responsibility practices companies (CSR) contribute to the return on investment and the performance of the company.
Revealing that green projects are increasingly attracting more funding than fossil fuel projects since the signing of the Paris Climate Agreement in 2015, he urged professionals, especially in the HSE segment, to help the sector to comply with global ESG best practices, particularly in the area of environmental issues.
“COVID-19 and the war in Ukraine have more than ever highlighted the need for the refining of petroleum products in Africa. We cannot increase our capacity without funding. For us to get sustainable funding, we need to prioritize HSE,” Kragha noted.
The Executive Secretary said HSE operational excellence remained fundamental to success in the downstream petroleum industry and inextricably linked to productivity, risk and cost, adding that all employees, including board members of administration and front-line operators, must understand the impact of their decisions on the business.
Also speaking at the event, Executive Chairman of Energy & Natural Resource Security, Inc. (ENRS), Derek Campbell, said Nigeria and other countries had more to worry about in infrastructure security. energy.
Speaking on “Energy Security: Protecting Critical Energy Infrastructure and Natural Resources,” Campbell denounced the persistent vandalism of infrastructure in the Niger Delta.
Stating that instances of security attacks including the drone attack on oil facilities in Saudi Arabia, the METCALF power station sniper attack, the ransomware attack on Sonangol in 2019 cost huge losses to the industry, Campbell said there was a lack of domain knowledge in the industry,
According to him, energy must now prioritize physical and cyber risk mitigation solutions for critical energy infrastructure and natural resources.
Campbell sees Energy Security Risk and Resilience Assessments (ESRRA) as a practice that countries must now prioritize to avoid growing dangers to critical energy infrastructure.
Janet Ruettiger, offer manager for Honeywell UOP’s thermal oxidation business, said UOP’s new nViro technology will provide solutions to help the refining sector meet emissions specifications more efficiently. efficient and more economical with less environmental impact.
With this approach, Ruettiger said organizations could rethink the way waste management is approached at refineries, pointing out that it allows waste management to be integrated into the design of processing units, thus providing opportunities for optimization and improvement.