European banks reluctant to fund fossil fuel – SPE chair

The Chairman of the Society for Petroleum Engineers in Nigeria, Salahudeen Tahir, stated that European banks were no longer interested in financing investments in fossil fuels in Africa.

He spoke in Lagos at the just concluded 47th Nigeria Annual International Conference and Exhibition 2024, with the theme ‘Petroleum Industry Value Chain: The Inevitability of Midstream and Downstream Development’.

According to Tahir, that prompted the establishment of the African Energy Bank, the headquarters would be located in Nigeria.

“Funds are becoming tighter and that was why there was the move to create that African Energy Bank,” said Tahir.

He noted that the creation of the energy bank was a response to European financial institutions becoming reluctant to support oil and gas and talking more about green energy, the environment, governance and social.

“We realised that in Europe, they are limited funding. In fact, there are financial institutions that have pulled out of funding for carbon and fossil fuels. Now African countries are coming together to say, ‘We are looking at the future and if this thing continues, we may find it difficult to find funds; let us create a bank where all oil-producing countries in Africa can deposit funds. If you need to invest here, you will get it.’

“We have been getting funds from Afreximbank. It has been doing well and it is by Africans. Much more will come with the energy bank and it is focused on the development of oil and gas,” he stressed.

On claims that fossil fuel would go into extinction due to energy transition and the call for renewable energies, Tahir disagreed, saying oil and gas would remain the major fuel for a long time.

He declared that Africa needed a robust energy mix to survive.

“You should have coal, oil, gas, nuclear, solar and others to give you energy security because if you do not have one today, you have the other. But if you have one and it is not in abundance, it will not now be okay.

“Oil and gas will remain for a very long time. There are no two ways about it,” he maintained.

On the divestment of international oil companies in Nigeria, he allayed fear of job losses.

He disclosed that the indigenous people taking over those assets.

“We need that energy because that is what we have. If we do not produce, and modify the energy to the extent that we can use it, then the upstream is as good as gone. I can assure you that the future can only be brighter with these indigenous people who are stepping in. You can see that Seplat, Aradel, ND Western, and others are growing in leaps and bounds.

“Rest assured, it is a bright future for oil and gas,” he noted.

The International Energy Agency predicted that oil demand would continue to shrink as renewables take centre stage.