Global Investment in Oil and Gas: A Call to Action
The Urgent Need for Infrastructure Investment
Heineken Lokpobiri, Nigeria’s minister of state for petroleum resources, has made a compelling call for renewed global investment in oil and gas infrastructure. During his address at the 9th edition of the 2025 OTL Africa Downstream Energy Week in Lagos, he stressed that a staggering $450 billion must be invested annually to maintain and rebuild crucial energy assets. This investment is necessary not just for energy security but also for economic stability worldwide.
Contextualizing Energy Transition
Lokpobiri highlighted the increasingly complex narrative surrounding energy transition. He stated that while there’s a push for renewable energy, the growing demand for energy, especially in developing economies, must not be overlooked. According to the International Energy Agency (IEA), the call for a moratorium on fossil fuel investments is shifting. Instead, the world must strike a balance recognizing that oil and gas will continue to be pivotal for years to come.
The Role of Population Growth
As the global population is expected to increase by an additional two billion people by 2050, Lokpobiri pointed out that energy demand will surge correspondingly. He emphasized that even with advancements in renewable energy technologies, hydrocarbons will remain indispensable for ensuring global energy security.
Financial Requirements for the Energy Sector
Beyond the $450 billion earmarked for infrastructure recovery, the minister underscored the necessity for annual global spending exceeding $700 billion across upstream, midstream, and downstream sectors. This level of investment is essential to mitigate potential supply disruptions and curb price volatility in the energy market.
Africa’s Energy Trade Challenges
Africans reside amidst vast hydrocarbon resources yet face significant challenges. Lokpobiri noted that Africa’s energy trade results in significant financial losses due to its limited refining capacity and inadequate distribution infrastructure. In 2024 alone, the continent imported $120 billion worth of hydrocarbon products, highlighting the pressing need for enhanced local refining capabilities to retain wealth.
The Drive for Domestic Refining
Lokpobiri addressed Nigeria’s policy focus under President Bola Tinubu, aimed at reversing trends of dependency on imported hydrocarbons. Initiatives are underway to drive domestic refining, regional trade integration, and further investment into the downstream value chain. Private sector efforts, including those from Dangote Petroleum Refinery, are critical to stabilizing fuel supply in Nigeria and fulfilling West Africa’s growing demands.
The Impact of Fuel Subsidy Removal
The minister highlighted the removal of fuel subsidies in 2023 as a necessary step to create the fiscal space for private investments. He termed this policy decision “bold but necessary,” setting the stage for energy market reform in Nigeria.
Climate Financing: A Political Tool?
While discussing international climate financing, Lokpobiri lamented the limited disbursement of pledged funds to developing countries. He criticized certain Western nations for politicizing climate finance while failing to deliver meaningful support for Africa’s energy transition. He argued that Africa contributes only about 3% to global emissions, illustrating the unfairness of advising the continent against developing its hydrocarbon resources.
Energy Security Versus Energy Transition
To steer the conversation in a more favorable direction, Lokpobiri advocated for a shift from the term “energy transition” to “energy security.” This semantic change underscores the continent’s need for reliable and affordable energy solutions before considering cleaner alternatives.
Engaging with Global Partners
Nigeria is actively pursuing partnerships with international investors to attract new capital into the oil and gas value chain. Recent agreements with entities in the U.S. and Europe aim to create a competitive investment environment, indicating a positive trend for the country’s energy sector.
The Long-Term Vision for Energy Development
The government’s goal remains to ensure that oil and gas can continue to fund development while gradually transitioning towards clean energy. This balanced approach will meet immediate energy needs while paving the way for a sustainable future.
Celebrating Ongoing Efforts in Africa’s Energy Dialogue
In closing his remarks at the OTL Africa Downstream Energy Week, Lokpobiri applauded the organizers for sustaining the conference over nine years. This platform has been essential in shaping policy discussions and investment dialogues within Africa’s energy space.
Author Bio
Oladehinde Oladipo
Dipo Oladehinde is a skilled energy analyst with a wealth of experience in Nigeria’s energy sector, complemented by extensive knowledge of the macroeconomic landscape. His expertise encompasses market intelligence, financial analysis, and technical insights essential for effective policy-making and private sector engagement.