In conversation with Osayande Igiehon on energy sufficiency and the future of Nigeria’s energy sector

5 Jul 2024
In conversation with Osayande Igiehon on energy sufficiency and the future of Nigeria’s energy sector

As Osayande Igiehon, Chief Executive Officer and Managing Director at Heirs Energies, emphasizes in this interview, energy sufficiency is a key concern. In this exclusive conversation, the seasoned energy sector executive takes us through the company’s vision and its role in addressing energy issues in the country and the wider African continent. 

When discussing energy transition, inclusion is a vital aspect. Nothing can be more emblematic of an inclusive and just transition than focusing on African countries, where the energy gap is significant.  For example, in Nigeria, over 85 million people lacked access to electricity as of 2021.

As Osayande Igiehon, Chief Executive Officer and Managing Director at Heirs Energies, emphasizes in this interview, energy sufficiency is a key concern. In this exclusive conversation, the seasoned energy sector executive takes us through the company’s vision and its role in addressing energy issues in the country and the wider African continent. He also shares insights into key trends shaping the sector. 

Interviewer: As CEO of Heirs Energies, what are your vision and key strategies, drawing from your nearly three decades of experience in the energy sector?

Mr. Igiehon: Our ambition is clearly to be one of the top five Nigerian independents that emerge as international oil companies pull out of the upstream. However, our focus is not only upstream. We are also trying to build an integrated energy company and business with a strong footing in midstream and a strong integration with power. 

Beyond Heirs Energies, Heirs Holdings has an integrated energy play, which is driven, on the one hand, by our growth in the upstream and midstream sectors and, on the other hand, by power through our investments in Transcorp. So, interlinkage from hydrocarbons to power will also be a key piece of our future.

Given my 30 years in the industry, I’m building and leading Heirs Energies to be a very strong, definitive, and differentiated company in the marketplace.

There are three key elements that underpin our approach to building Heirs Energies. This approach has seen the company grow from zero to acquiring an asset with no capability and no track record in 2021 to being recognized within three years as one of the leading Nigerian independent companies with a lot of promise.

The first thing is that we have tried to build a different, value-driven company. Everything we are doing is driven by value, and it quite significantly differentiates us from the activity-driven approach predominant in the industry.

The second thing we are building is an organization with a strong ethos founded on value and what we call our winning behaviors — our winning ways of working. These ways describe how our staff turn up and approach every activity, task, or objective that they are tasked with. In this way, we are building a company that achieves outcomes that outpace any of our peers. 

Thirdly, we are building a company that will be an expert in brownfield engineering. One of the dominant mindsets in the industry is a greenfield approach, where projects are new, expensive, and time-consuming. However, we are building a brownfield excellence company that focuses on old assets, maximizing their value by working faster, thinking outside the box yet maintaining safety, and ensuring that we achieve outcomes that exceed expectations in every area.

Interviewer: What role do you see Africa playing in the global energy transition? What unique opportunities or challenges does the continent face?

Mr. Igiehon: The first thing to note here is that Africa’s role in the global energy transition is one that needs a lot of consideration. 

First, let me talk about the reality of Africa, the starting point of where we are today. Today, we have a significant deficiency in energy supply. Many different quotes are being given, but it suffices to say that there’s a commonality that over 50% of our energy needs are unfulfilled. Over 50% of sub-Saharan Africans, for example, live with less than 20% of their electricity requirement.

This presents a critical point for us when it comes to considering our position going forward. 

How do we address this huge energy deficiency in a world that is espousing energy transition? When you consider that energy transition involves moving from a system where the predominant energy supply or consumption is through petroleum products to a global system where the energy supply and consumption is mainly electricity, it becomes a critical issue.

There is a subtext and a growing push to move the global energy system from hydrocarbons to renewables. But over the past few years, we have seen that this agenda does not fully include Africa and that Africa needs to craft its own journey in this transition. Every system would transit; the conversation is where you are transiting from and where you are transiting to. And my position is that Africa’s destination in this transition has to be energy sufficiency. 

We have to be on a journey of energy sufficiency, and that should be our focus. Our focus should not necessarily be on the energy transition as popularly posited — because this presents quite a number of challenges for us. This is especially true given that the Western world is keen, for stated environmental reasons, to move the energy system from one that is dominated by hydrocarbons to one that is dominated by renewables. The recent years have shown the underbelly and the weaknesses of this popular approach and the geopolitical undertones that underpin it. 

For Africa, we need to focus on how we can be energy-sufficient in the shortest period of time to power our economies and improve the lives and livelihoods of our people. 

This, for me, is the key consideration. And I do believe that getting to energy sufficiency for Africa is going to be by a combination of energy sources. 

We need our hydrocarbons, which we are very blessed with, and we continue to find new sources of them every day. Our energy mix will also include renewables, both traditional renewables like hydro and emerging renewables like solar, wind, and many others.

It’s very important that we envision a future where the demand is better understood, the gap is better understood, and the supply and how we fulfill it are better understood. We need a consolidated and dedicated effort to bridge this gap.

I think Africa and African countries should focus on crafting energy-sufficiency plans rather than energy transition plans. These energy-sufficiency plans should take advantage of the developments from energy transition, such as new sources of energy, and use these as accelerators to bridge the gap, rather than making the transition itself the primary objective.

Interviewer: How is Heirs Energies addressing these?

Mr. Igiehon: I think I’m very proud to say that we are a significant producer of oil and gas in Nigeria. We produce roughly 3 to 4% of Nigeria’s oil production, as well as roughly 3 to 4% of Nigeria’s domestic gas supply.

We are very proud that all of our gas goes into the domestic market, driving power plants and providing feedstock to gas-based industries. This supports lives and livelihoods, creates jobs, and supplies energy for daily use to thousands of homes and people every day.

We intend to continue growing our gas supply into the domestic market and build a midstream position that will be targeted at the Nigerian domestic market, both looking at liquids and gases. So, we are uniquely poised in line with our vision to address Africa’s energy needs. Over the years, we have been hoping to build a global-scale business that will make an impact in the energy space in Africa.

Interviewer: What are the most significant trends shaping the energy sector, and how will they impact the future?

Mr. Igiehon: There are a number of key trends at play — globally and regionally/locally. There is an interplay between them, and it will have an imprint on what we will see in the energy industry going forward.

On a global level, there are a number of key factors to consider.

For me, the first one is the energy transition. It’s a key trend. This started in the last decade with a lot of momentum around changing the energy system. There’s a deliberate drive for acceleration of the energy system from, as mentioned, one dominated by hydrocarbon supply to one dominated by renewable supply. 

But recent events have toned the drive for acceleration, and there is now a more balanced view globally on the pace at which this transition will happen; what the components of the future energy supply and demand system would be; and a clarity that hydrocarbons will definitely remain as one of the key sources of supply over time.

Interlinked with and underpinning this is a growing realization and common understanding that hydrocarbons are not the problem; the problem is emissions of greenhouse gases. Now, there is a more concerted effort to look at the issue more broadly, focusing on emission elimination and reduction, as opposed to the elimination of hydrocarbons. That is going to be a key factor. So, it’s not just about energy transition but also a shift in the thinking of what underpins the energy transition.

A second point is the global geopolitical balance in the world. we’ve seen lots of posturing. We’ve seen the Russia-Ukraine war dominate the space for the past 3 to 4 years. And we are now seeing a potentially expanding theater of conflict in the Middle East with the war between Israel and the proxies of Iran. 

These two conflicts have shaped the global discourse and have an imprint on energy in the past years. I think these and other geopolitical tensions — and the quest for energy security by certain regions facing the realities of declining hydrocarbon reserves — are going to shape the global energy landscape.

Thirdly, significant hydrocarbon discoveries have been made in existing and new places across the world. For example, Guyana has had huge finds, and Namibia has reported significant exploration and finds. These discoveries create a different dynamic of increased hydrocarbon supply, potentially offering hydrocarbons at cheaper rates than alternatives. This will be a key consideration for many countries as they chart the course of energy supply and energy security.

A fourth factor is the significant development of renewable energy. There are developments due to technology, and there’s a constant trend of reducing costs. All of these show that renewables will grow and be a very significant part of the energy mix. But my thinking is that they’re going to sit with hydrocarbons in the space and not necessarily replace them for the next few decades to come.

 

Mr. Osayande Igiehon is one of the speakers at this year’s Nigeria Energy Leadership Summit. The summit will feature insightful discussions on the country’s journey as it transforms its electricity sector. 

It is part of Nigeria Energy, West Africa’s leading energy event, which is now on its 11th edition. Held under the patronage of the Federal Ministry of Power, the event gathers key figures and decision-makers to tackle issues and foster connections that will usher in a brighter energy future for West Africa. Nigeria Expo takes place at Landmark Centre, Lagos, from October 15 to 17, 2024. 
 

 

Nigeria Energy, now in its 11th edition, stands as West Africa's leading energy event, bringing together a comprehensive array of industry leaders, innovators, and game-changing technologies. Join us to experience the entire energy value chain, from cutting-edge generation and transmission advancements to groundbreaking solutions in renewables and energy efficiency.

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