‘Surge in shale oil, gas to transform Nigeria’s economy’

The growing production of shale oil and gas in the United States (US), which has drastically affected US imports of Nigerian crude oil and liquefied natural gas (LNG), will ultimately transform the economy of Nigeria from rent-seeking, rent-sharing, and hard-currency driven economy to a value added prone economy, said Wumi Iledare, president of International Association for Energy Economics (IAEE).

In his presentation on Monday at the ongoing 37th IAEE international conference in New York, made available to BusinessDay, Iledare said the surge in unconventional output in North America has global implications in terms of oil and gas price outlook and technology transfer as evident in the diffusion of deepwater technology from the US Gulf of Mexico deepwater to other deepwater regions.

“Bringing it to hydrocarbon resource rich countries, like Nigeria, I perceive that the growth in unconventional will ultimately transform the economy of Nigeria from rent-seeking, rent-sharing, and hard-currency driven economy to a value added prone economy,” he said while commenting on the implications of the surge on oil import from Nigeria.

Noting that the world is endowed with as much if not more of unconventional resources as conventional resources, Iledare said the key challenge is how the oil and gas industry can extract safely these resources with minimal damage to the environment.

“The ease to find oil and gas conventional resources is on the decline and a new energy landscape is emerging as technology makes unconventional hydrocarbon resources desirable and accessible,” the director of Emerald Energy Institute, University of Port Harcourt, said.
World energy needs are rising, especially in the emerging economies and more specifically in the transportation sector, which for the nearest future may have to still depend primarily on oil and perhaps gas, all things being equal, according to him.

“Glut in the gas market has led to low natural gas prices in the US and this has made natural gas very competitive against other fuels. Thus, net coal exports from the U.S. have increased with an inevitable downward pressure on prices. The US has suddenly become a less attractive destination for LNG exports,” he said.
Alternative markets have become a necessity for all the LNG projects eyeing the US destinations, Iledare said.