Oil and Gas

Emissions from the Oil and Gas sector (Upstream) remain positive even in 2060

Oil and gas emissions in BAU, Mt COâ‚‚e

  • natural gas
  • oil
  • total

Oil and gas emissions in NZE 2060, Mt COâ‚‚e

  • natural gas
  • oil
  • total

Key insights

  • In BAU, emissions from the O&G sector (upstream) almost double from 2020 to 2060, reaching around 39.1 Mt COâ‚‚eq in 2060.
  • In NZE, emissions from the O&G sector remain positive (7.5 Mt COâ‚‚eq) even in 2060, mainly from the production of oil.
  • The upstream O&G sector emissions abatement in the NZE in comparison to BAU is 31.6 Mt COâ‚‚eq, or around 80% of the O&G sector emissions under BAU.

Overall assumptions

  • Upstream emission factor for natural gas (natural gas production) considered is 0.0108 Mt COâ‚‚eq/PJ
  • Upstream emission factor for oil (oil production) considered is 0.0158 Mt COâ‚‚eq/PJ)
  • Oil and gas activity values (total demand) are multiplied by their respective emission factors to obtain the total emissions from the O&G sector.

Oil and Gas demand - Downstream

Key insights

  • Oil demand in both scenarios is mainly from the transport sector, while gas demand is mainly from the power sector.
  • In BAU, the oil demand is almost halved by 2060 in comparison to 2020 (550 PJ in 2060), while natural gas demand increases by more than 8 times (2,740 PJ in 2060) within this period.
  • This is due to a shift of demand from oil to natural gas observed for the industry (from 2040), transport (from 2040) and power (from 2030) sectors, resulting in an overall demand reduction in oil and a significant increase in natural gas demand.
  • In NZE, oil demand drops sharply by 2045, owing to growth of electric vehicles.
  • In NZE, gas demand remains less in comparison to BAU (650 PJ in 2035). The major demand is from the power and industrial sectors for security of supply and hard to abate industries.
  • power
  • hydrogen
  • industry
  • transport
  • Residential
  • Comercial
  • Agriculture

Oil demand by source in BAU, PJ

Oil demand by source in NZE, PJ

Gas demand by source in BAU, PJ

Gas demand by source in NZE, PJ

Just transition perspectives
in the Oil and Gas sector

 The global net zero emissions movement and the resulting global oil demand reduction can impact the O&G sector:
110 k low-qualified direct, indirect and induced jobs potentially lost in 2050 compared to 2020

However, the net zero transition in Nigeria will also create several jobs in the renewable and other sectors:
– 840k incremental full-time equivalents in 2050 compared to 2020 across sectors
Most job creating sectors include power sector with decentralized technologies, and transport sector with electric vehicles

Preparing for a just transition could be enabled by reskilling the affected workforce, creating local value chains, and creating a national just transition policy outlining clear pathways for workers and communities affected by the shift to a low-carbon economy.

barriers AND
Potential actions

Group 8882 (2)

Barriers

Group 8883 (2)
  • Global O&G demand shifts
  • Upfront costs for reducing upstream emissions
  • Perceived reduction in Govt revenue decrease

Potential Actions

Global oil and gas demand reduction due to the global net zero emissions movement

Reduce fugitive emissions in oil and gas

  • Instrument air systems
  • Vapor recovery unit(VRU) on storage tanks
  • Replace compressor rod packaging
  • Quarterly leak detection and repair (LDAR)

Reduce flaring and venting in oil, driven by the Nigeria Gas Flare Commercialization Programme (NGFCP)

  • Improve flaring efficiency
  • Export gas through pipeline
  • Repurpose gas

Fuel use efficiency in oil and gas production
Increase run time of key equipment

  • Increase run time of key equipment
  • Equipment optimization through AI
  • Upgrade simple cycle gas turbine (SCGT) to combined cycle gas turbine (CCGT)
  • Steam boiler electrification
  • Process electrification
  • Electric motor

Deploy CCUS in refining