Adewale Sanyaolu, Houston, Texas
Nigeria is lagging behind Angola, Norway and may likely be taken over by Ghana in the management and build-up of its Sovereign Wealth Fund (SWF) currently at $1.5 billion.
SWF is a state-owned investment fund or entity comprising pools of money derived from a country’s reserves. In Nigeria, the Nigeria Sovereign Investment Authority (NSIA or The Authority) is an agency of the federal government set up to manage funds in excess of budgeted hydrocarbon revenues.
Chief Executive Officer of Seplat Petroleum Development Company Plc, Mr. Austin Avuru, who stated this at the Petroleum Association of Nigeria (PETAN) workshop with the theme, “Global Energy Transformation: The Effect and Future of the African Oil Industry and Economy’’, as part of activities at the Oil Technology Conference (OTC) in Houston, Texas, said it was worrisome that Norway, with a population of about five million people which started oil production in 1971, 13 years after Nigeria, has built up its SWF to about $1 trillion. He also pointed out that Angola has edged up to $5 billion, leaving Nigeria behind with $1.5 billion.
‘‘If Norway stops producing crude oil and natural gas today, its SWF is enough to feed the country forever. That is the kind of thinking that goes into what you do with your resource wealth,’’ he affirmed.
He warned that Ghana, whose oil production is slightly higher than that of Seplat Petroleum, has already built close to $500 million in SWF over a short period of oil production.
‘‘If Ghana continues along the path it is going, and produces for about 30 years, which is half of the number of years we have carried out oil production, it would probably have a SWF that will be half of its GDP in size.’’
Avuru equally alluded to what other countries are doing with their oil wealth, saying the new king in Saudi Arabia is turning the oil and gas industry into a catalyst for more sustainable economic growth.
On the perceived threat to fossil fuel, the Seplat CEO said up to 2040, fossil fuel will account for 53 per cent of the world’s energy demand.
‘‘What we are seeing is a gradual decline in the total contribution of fossil fuel to the energy mix over time. It is not an overnight elimination of fossil fuel.”