Financial Energy Review
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced aggressive steps it is currently taking as well as plans to help the country achieve 40 billion barrels oil reserve and three million barrels per day (bpd) targets.
Chief Executive Officer, NUPRC, Mr. Gbenga Komolafe, disclosed these yesterday in Lagos, in his keynote address at the opening ceremony of the ongoing 39th Annual International conference and exhibition of the Nigerian Association of Petroleum Explorationists (NAPE).
The theme of the conference was, “Petroleum Exploration and Production in a New World: What Next after the Global Crises.”
He said part of the strategy was the initiation of Public, Private, Partnership (PPP) involving security agencies, private operators and other stakeholders to address the challenging issues of crude oil theft, sabotage and pipeline vandalism.
Other measures being taken by the commission, according to Komolafe, included, “Collaborative efforts between operators, communities and the deployment of state-of-the-art technology to monitor pipelines in remote areas is on course.
“Already, as a commission, we have commenced consultation with relevant stakeholders towards the achievement of these objectives.
“A more aggressive policy on routine Asset Integrity Management to cub crude leakages and spills caused by aging facilities will be adopted.
“An initiative to reduce the cost of production while also benchmarking cost across terrain is ongoing.”
He added that the commission was making provision to incentivise drilling targets at deeper horizons and to also provide guidelines to ensure seismic acquisition design to image deep plays.
He said attractive incentive was being made to encourage multi-client and speculative data companies to acquire state-of-the-art data in open acreage to facilitate exploration activities.
Going down memory lane on Nigeria’s oil and gas performance in the past and juxtaposing it with what is obtained at the moment, Komolafe recounted that crude oil export began at 5,000 barrels of oil per day, culminating in 2.2 million barrels per day in the 90s.
He said Nigeria’s oil and gas reserves were 25 billion barrels and 166 trillion cubic feet (TCF) respectively in those past years, adding that with the dominance of the oil industry by the multinational oil firms, production was sustained at this rate and that upstream activities were predominant in the Niger Delta.
According to him, in the 2020s, enhanced participation of independents and indigenous players began with extension of exploration and production activities to Benin and Anambra basins.
He said consequently, there was an increase in reserves to about 37 billion barrels comprising oil and condensate and over 200TCF of natural gas, a record that made Nigeria a big player in the global petroleum industry.
Komolafe, however, noted that oil production in Nigeria has declined to an average of 1.6 million bpd in 2021, attributing the decline in production to theft, insecurity, aging facilities, decline in exploration and production enhancement initiatives.
He said as the upstream technical and commercial regulator, the agency was committed to addressing the issues causing the decline in daily production in order, “to increase our reserves to 40 billion barrels and raise our production to three million barrels per day.”
However, in acknowledgement of the current energy transition, Komolafe also listed some initiatives aimed at driving Nigeria’s compliance to the global clean energy objective -the reduction of carbon emission to 1.5C by 2050.
Among the measures he listed were to aggressively implement the Nigerian Gas Flare Commercialisation Programme (NGFCP), and ensure that all approved Field Development Plans (FDPs) incorporate full gas utilisation and monetisation programmes.
Others are the introduction of regulations that would ensure new exploitation and production projects include decarbonisation elements to further attract foreign investments.
He said further that the commission would collaborate with the NNPC Limited and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDRA) to encourage investment in refining and gas-based industries.
According to him, the commission would also collaborate with counterpart regulatory agencies within the Sub-Saharan region in order to create strong alliances that ensure sustainability and demand for our crude oil and refined products.
Against the challenge posed by energy transition, he said the regulatory focus of NUPRC would be targeted towards enabling sustained upstream investments.
The NUPRC boss however, called for a paradigm shift in the exploration and production value chain of the Nigerian petroleum industry, warning that without that, it would be difficult to keep the industry afloat.
Komolafe said more than ever before, the industry was plagued by investor skepticism, high level competition, climate change and clamour for clean environment.
He said for oil and gas to entice the needed investment, there must be an attractive fiscal framework, which the Petroleum Industry Act (PIA), 2021 seeks to address.
According to him, “The PIA, 2021 is positioned to effectively stimulate necessary investments in the industry, improve investor confidence, address major community issues, and generally transform the face of the industry as we currently know it.”
