Future Implications of Global Renewable and Unconventional Energy Development on Nigerian Petroleum Sector

Abstract

Abstract One of the most critical advances in the energy sector of the 21st century is the surge in technological developments that made renewable and unconventional (shale oil, shale gas) economically viable energy sources. These developments, in addition to environmental concerns and the quest for sustainable development precipitated a flux in global energy demand and supply dynamics, with huge implications on energy (petroleum) prices. Nigeria is one of the major petroleum exporting countries, whose economy depends almost exclusively on oil (accounting for nearly 90% of total foreign trade, and 80% of foreign exchange revenue), even though the sector contributes less than 20% to national gross domestic product. Presently, the nation is struggling to gain a quantum leap from the current economic recession orchestrated in part, by the slump in global oil price since mid-2014. This negative impact on the economy signal potentials of more severe consequences in the future, especially as major oil consuming economies are realigning their energy policies in favor of low carbon economy. Providentially, it is important to assess the dynamism in the global energy landscape, with a view to furnishing Nigeria's economic and policy makers with information adequate for situating the country on the right pedestal so as to remain relevant both regionally and globally. This is the object of the present study. We use available global statistics (from IEA, US EIA, OPEC and NNPC) and scenarios of energy supply & demand dynamics, to assess the implication for the Nigerian oil and gas sector, as well as the potential market opportunities available for the country. Our analysis showed Nigeria's oil and gas export may face stiff competition in the international oil market. The study recommended diversification of revenue sources; and also energy alliance opportunities, especially with high energy consuming economies like India.