Fresh Worries For Oil, Gas Projects Over ESG Standards

• ARDA Seeks Options For Nigeria, Africa Downstream Oil Sector • Stakeholders Raise Alarm Over Protection Of Energy Infrastructure

OIL and gas experts are worried over the impacts of Environmental, Social, and Governance ( ESG) issues on financing for oil and gas projects, insisting that unless borrowers like Nigeria and other African oil producers quickly adapt, securing necessary funding for the sector may remain very difficult.

In the face of huge refining, storage and supply deficits, over $ 15.7 billion (+/- 50%) is reportedly needed to upgrade the existing refineries on the African continent alone to produce cleaner, AFRI- 6 fuels ( 10 ppm sulphur content), and a clear focus on the ESG contributions of such projects is imperative.

Indeed, over $ 160 billion projects are currently under financial threat in Nigeria’s upstream oil sector even as the Organisation of Petroleum Exporting Countries ( OPEC) said oil nations might find it difficult to raise over $ 12.6 trillion needed for oil and gas investment before 2045.

Speaking on the ‘ Implications of ESG Standards on Global Oil & Gas Project Financing,’ Executive Secretary of African Refiners and Distributors Association ( ARDA), Anibor Kragha said attracting funding into Nigeria and other African oil producing countries may become tougher without strong consideration for emissions reduction, social development and governance.

Kragha reiterated that financing of oil and gas sector is in a state of transition, a development which is forcing closure of traditional sources of capital, especially from the World Bank and other national and international development finance institutions ( DFIS).