‘Gas is our transition fuel’ — NNPC defends energy strategy at COP31

Energy experts have warned that Nigeria could face declining government revenue, job losses and wider economic challenges if the Nigerian National Petroleum Company Limited fails to carefully manage its investments amid the global shift towards cleaner energy.

They urged the national oil company to adopt a balanced energy transition strategy that protects existing oil and gas revenue while expanding investments in natural gas, renewable energy and other low-carbon industries.

The experts spoke at a session titled ‘The Role of NNPC in Nigeria’s Energy Transition’ at the ongoing 31st United Nations Climate Change Conference (COP31) in Antalya, Türkiye, on Friday.

The discussion was organised by the Centre for Petroleum, Energy Economics and Law, University of Ibadan; the Centre for Energy, Finance and Development; and the Inclusive and Sustainable Development Research Centre.
The Nigeria Country Manager of the Natural Resource Governance Institute, Tengi George-Ikoli, said national oil companies would play a crucial role in determining how countries manage the gradual decline in fossil fuel production.

She warned that as international oil companies reduce their investments, national oil companies could fill the resulting investment gap, making their decisions critical to the global energy transition.
“National oil companies will play a major role in determining the success of the push for a managed decline in fossil fuel production globally,” she said.

George-Ikoli urged Nigeria to move beyond policy discussions and ensure that NNPC works with the Federal Government to assess long-term investment risks and prepare for declining demand for fossil fuels.
In his presentation, the Executive Director of the Centre for Energy, Finance and Development, Nicolas Lippolis, said the Petroleum

Industry Act 2021 had transformed NNPC into a commercially oriented company, creating the challenge of balancing profitability with its public responsibilities.
He noted that about 35 per cent of NNPC's revenue came from oil and gas exports, while petroleum products accounted for approximately 85 per cent of Nigeria's exports, exposing the economy to fluctuations in global energy demand.

Lippolis identified gas-fired power generation, domestic midstream infrastructure and international pipelines as investments requiring closer scrutiny because of their exposure to energy transition risks.
He said independent market assessments and commercial viability checks would help the company avoid committing resources to projects that could become unprofitable as global energy markets change.

Also speaking, the Executive Director of the Inclusive and Sustainable Development Research Centre, Oluwasola Omoju, warned that NNPC's investment decisions could have consequences far beyond the petroleum industry.
Presenting an economic modelling assessment, Omoju examined three possible transition strategies: withdrawing from fossil fuel investments, shifting towards natural gas and capturing and commercialising gas currently being flared.

He said the findings indicated that the different pathways could produce negative macroeconomic effects, including declining government revenue as Nigeria reduced its dependence on oil and gas.
However, he identified opportunities in refining and industrial activities, which could create employment and absorb some workers displaced by changes in the energy sector.
Omoju stressed that the economic impact would depend largely on the strategy adopted by NNPC and the supporting policies and financing arrangements provided by the Federal Government.

Responding to the concerns, the Manager of Strategy and Sustainability at NNPC Upstream Investment Management Services, A.O. Adaji, said the company was pursuing an energy mix rather than relying on a single source.
He described natural gas as Nigeria's transition fuel, saying the company was expanding its use to support industrialisation, electricity generation and efforts to tackle energy poverty.
“Right from the presidency, the board and the executives, we know that gas is our transition fuel,” Adaji said.

He added that NNPC was using blended investments and strategic partnerships to commercialise gas and supply power plants and industrial facilities.
Adaji also disclosed that the company was supporting efforts to eliminate gas flaring by 2030 through the Nigerian Gas Flare Commercialisation Programme.
He said flared gas accounted for about five per cent of Nigeria's total gas production in 2025, urging investors and businesses to participate in its commercialisation.

The NNPC representative further disclosed that the company had established a new energy subsidiary to drive investments in renewable and low-carbon energy.
The discussions also featured experiences from Brazil, Senegal and Uganda, with representatives highlighting the importance of government support, regional cooperation and domestic industrial development.
The Technical Director of Brazil's Instituto de Pesquisa em Petróleo, Gás e Biocombustíveis, Mahatma Ramos, said national oil companies should serve as instruments of sustainable development rather than focus exclusively on shareholder returns.

He cited Petrobras as an example, arguing that successful energy transition investments required clear government mandates, long-term financing and accountability to workers and host communities.
Similarly, the Director of Environmental and Social Performance and Safety at Senegal's Réseau Gazier du Sénégal, Awa Diouf, explained how the country's gas pipeline company combined public ownership with private-sector flexibility.
She said the arrangement enabled the company to coordinate gas producers, power plants and industrial consumers while benefiting from government backing in securing financing.

The Head of Corporate Strategy and Innovation at the Uganda National Oil Company, Michael Kyanzi, said Uganda regarded energy security as a national security priority.
He called for greater collaboration among African countries, domestic value addition and investment in regional infrastructure to reduce dependence on imported refined petroleum products.

Citing Uganda's cooperation with Kenya on petroleum pipeline infrastructure and the East African Crude Oil Pipeline involving Uganda and Tanzania, Kyanzi said regional partnerships could lower financing costs and strengthen energy security.
The panellists agreed that cooperation among national oil companies, governments and private investors would be essential to ensuring that the global energy transition did not undermine Africa's economic development.