Tag: NUPRC

Following the spate of divestments from the country’s onshore and offshore sector of the oil industry, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said it has made public the conditions  for asset divestment, including due diligence processes that exiting International Oil Companies (IOCs) must fulfill before leaving.

Read Also: NUPRC seeks investment as crude oil production is 1.6mb/d

NUPRC Chief Executive, Gbenga Komolafe, explained that while the Commission is not interested in blocking companies willing to buy such assets from any IOC, however, due process must be adhered to.

Komolafe listed the conditions for such companies, also known as the ‘successor entity,’ interested in buying the assets from IOCs to include having the Technical Capacity, Financial Capability, Fulfillment of Legal Requirements, Decommissioning and Abandonment Plan, Host Community Trust Fund, Industrial Relations and Data Repatriation.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday sought investment to boost the present 1.6million per day of crude oil and condensate to the national average of daily production target of set at 2. 5 million barrels oil and condensate in the near time.

Its Chief Executive Officer, Engr. Gbenga Komolafe broke the news at the 7th Nigerian International Energy Summit (NIES) in Abuja.

Presenting a keynote speech on the theme: “Sustainable Strategies for Energy Leadership: Navigating Security, Transition and Finance in a Changing World.”

He however, noted that the current Organization of Petroleum Exporting Countries (OPEC) quota for Nigeria is 1.5mb/d.

He said, “Although the National production currently averages 1.3million barrels of oil per day aside 256,000 barrels of condensate, which the combined figure take us to about 1.6mb/d while the current OPEC quota is 1.5mb/d.”

The Commission Chief Executive said near time national production target in the industry is 2.5mb/d.

He added that “there is a gap between the technical allowable of 2.2mb/d, the OPEC benchmark was 1.5m and our current production of 1.6mb.”

He described the shortfall as a call for further investment in the industry.

“We recognize that there is ability in disability,” said Komolafe. 

Speaking further about investment to bridge the production gap in the industry, Komolafe said, “This gap, while we are doing everything to piloting the industry alert to close this gap by the challenges, we believe that this gap presents a very good opportunity for investment.”

He noted that since the inception of the commission in October 2021, it has been working assiduously to ensure that the Petroleum Industry Act (PIA) is effectively implemented for growth in the oil and gas reserves as well as achieving the national average of daily production target of set at 2. 5 million barrels oil and condensate per day in the near time.

According to him, the oil and gas in Nigeria represents 30% and 34% of the African oil and gas reserves respectively.

He further noted that the country’s reserves hold immense potential for sustainable development and prosperity. 

Read Also: NUPRC to harness oil, gas potential with strategic 10-year plan

Also speaking on the same theme, the Oil Producers Trade Section (OPTS) chairman, Mr. Osagie Okunbor, said oil production has fallen as the last decade has witnessed some 30per cent decline in output.

Okunbor, who is also the Shell Companies in Nigeria Country chair, stressed that there is now some improvement in production.

He noted that “I think we are all gladdened for the fact that starting from this year we have started to see some significant recovery.”

Okunbor, who said the  recovery is fragile, added that all hands must be on deck to sustain the momentum.

He noted that there is now increased indigenous participation witnessed across the value chain owing to the divestment of assets by the international oil companies.

According to him, the Nigerian oil and gas industry struggles to remain competitive because of the high cost of doing business in the basin.

He said there have been a lack of clear enabling business environment.

Speaking as a panelist on the same topic, Oando Energy Resources, Chief Operating Officer, Dr. Ainoje Alex Irune, said there are local problems plaguing the industry.

He said his company goes nowhere despite the situation.

According to him, the government, regulators, and operators are now facing the problem they should have tackled twenty years ago.

He called for a state of emergency in the oil and gas industry.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said the potential of the country’s oil and gas sector must be properly mobilised to propel her on a path of growth and development.

The commission, which regretted that in the years preceding the enactment of the PIA (2021), investments in the oil and gas industry declined mostly due to regulatory uncertainty, de-funding of fossil fuel development occasioned by energy transition and the global call for decarbonisation, however, informed that it is charting a new course in the Upstream Petroleum Sector through its 10-year Strategic Plan (2023-2033) unveiled in May 2023.

This, it noted, was also being propelled through the forward-thinking technically and commercially viable priority regulations developed so far to support energy security and drive emissions reductions pursuant to the PIA.

“As we navigate through the complexities of the global energy transition, the future we foresee for the Nigerian petroleum industry is one that should assure for the utilisation of our God-given hydrocarbon resources for shared prosperity, energy accessibility, affordability, sustainability, security as well as energy independence and energy sovereignty.

Those are the underlying goals upon which the Nigerian Government declared natural gas our immediate transition fuel and designed the Decade of Gas programme,” the Commission’s Chief Executive, Gbenga Komolafe, an engineer, told The Nation on the sidelines of an industry event in Lagos at the weekend. 

Explaining the process, Komolafe said that it is envisioned that gas actually plays a role to lift the country from the challenges that confronts the industry in order to drive sustainable development. For instance, he disclosed that a recent study has revealed that growth in gas demand outstrips supply.

Read Also: NUPRC keeps two-month oil production reports secret

This position is buoyed by a projection in the sector which indicate that between 2020 and 2030, demand is expected to grow exponentially at a compound annual growth rate of 16.6 percent per annum. Natural gas production is projected to increase from 8.0 bcfd in 2020 to 12.2 bcfd in 2030 driven by major projects such as NLNG Train 7 & Train 8; Nigeria/Morocco pipeline; Ajaokuta-Kaduna-Kano (AKK) Natural Gas Pipeline Project and several others ongoing.

Komolafe, who highlighted the huge opportunities in gas business for both the existing investors and new entrants in the Nigerian upstream gas sector, further hinted that investment opportunities have been created through the intensified efforts towards eliminating flared gas, methane abatement and reduction of fugitive gas emissions.

“As part of the efforts to deepen our gas market and ensure decarbonisation of upstream operations, the Commission recently awarded 49 flare sites to successful bidders for flare gas commercialisation through the Nigerian Gas Flare Commercialisation Programme (NGFCP). Through this initiative, more gas would be available for domestic utilisation as Liquefied Petroleum Gas (LPG), feedstock for power generation plants, fertiliser plants,  petrochemicals and export,” he said.

Other investment opportunities, according to the NUPRC boss, are also available in the licencing rounds, which he said would be conducted more frequently in line with the provisions of the PIA and the relevant Regulations.

He therefore called on investors to into taking advantage of the huge opportunities in Seismic acquisition on multiclient basis, development of deeper hydrocarbon opportunities, including business prospects in carbon-pricing system currently being stewarded by the Commission.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has kept the nation’s two months’ crude oil production reports secret.

Reasons for the clandestine action was not immediately clear at the time of filing this report.

The latest report the commission published was that of last November. It was published on December 13, last year.

Ordinarily, NUPRC would release the report of an immediate past month latest 10th of the new month.

In other words, the commission ought to have made the December report public by January, this year.

The much-awaited report would have given a summary of Nigeria’s crude oil and condensate oil production in December 2023.

Besides, being the last month of the year report, it would have given an overview of the last year’s crude oil production.

The report would have shown the performance of the oil producing firms.

Aside from giving an insight into the past, it affords the country, which is heavily dependent on the resource, factual data for states and national planning.

It would be recalled that the yearly budget is benchmarked with crude oil price and production volume.

With the commission sitting on it for two months, it has succeeded in keeping the stakeholders in the dark.

Petroleum profit tax is dependent on the volume of production just as host communities also rely on volume and price of crude oil to know the company’s profit and their entitlements.

The commission’s Corporate Communications, Head, Mrs. Olaide Shonola, whom The Nation asked why the NUPRC had been delaying the report, said it was being reviewed.

According to her in a WhatsApp message on February 5, this year, the commission would soon upload the report.

“It’s being reviewed and it will be uploaded soon,” she said.

Several days have since passed after the promise to upload the data soon.

In its last November report, which was the latest at the time of filing this report, the Commission said Nigeria’s crude oil and condensate production dipped to 1,466,184 barrels per day (bpd) in November 2023.

In the report tagged “Crude Oil and Condensate Production November 2023,” the commission noted that in the month under review crude oil output was 1,250,299 bpd.

The report further said 49,426b/d of blended condensate was produced in the period under review.

According to the data, Nigeria produced 166,429b/d unblended condensate in November, last year.

From the report, it is an indication that the country failed to meet its Organisation of Petroleum Exporting Countries (OPEC) quota of 1.8mb/d in 11 successive month in 2023.

Read Also: NUPRC mulls cut in oil production cost

It would be recalled that Nigeria could not meet the production quota the cartel approved for it last year.

Crude oil theft, pipeline vandalism, have been blamed for the downtime the country is grappling with.

Last week, The Nation reported that the Nigerian National Petroleum Company Limited (NNPCL) cried out that it recorded 389 incidents of crude oil theft in two weeks.

The record emanated from the company’s bid to eradicate crude oil theft.

Meanwhile, the Minister of State Petroleum Resources, Senator Heineken Lokpobiri, on Monday rekindled the country’s hope for improved petroleum production.

He  vowed that Nigeria would not only meet the 1.7 million barrels bpd crude oil production  benchmark in the 2024 budget but that it would also surpass it.

The Nation had reported that speaking at a Stakeholder’s Interactive Session on Creating Value and Enabling Investments in Nigeria’s Oil and Gas Sector organised by Chevron Nigeria Plc, he also said the country could increase crude oil production to two million bpd.

He expressed his commitment to fostering collaboration with stakeholders to enhance the country’s oil and gas sector amid his ambitious target for the year.

His Special Adviser on Media and Communication, Nneamaka Okafor, made this known in a press statement.

She quoted the minister as saying, “The success of the upstream sector will determine the success of the midstream and the downstream and as a government. We are willing to sustain that engagement with the stakeholders so that in 2024 and beyond, we will together ensure that we produce not the 1.7 million bpd that we need for our budget but ensure that we produce what is needed to meet the local demand.”

The Minister outlined the trajectory of sector growth since the administration took office, starting at about one million barrels per day and steadily increasing to 1.4 million barrels per day.

He expressed his ambition to continue this upward trajectory, highlighting the government’s commitment to creating an enabling environment for stakeholders to thrive.

“As a new government that is business-friendly, with a clear mandate to ramp up production, we are willing to ensure that our fiscal regime is competitive globally. My appeal is that this old marriage, let us manage it, sustain it and improve on it. Whatever your concerns may be, let us put them on the table to disagree to agree,” Lokpobiri said.

He reassured stakeholders that the government was addressing the challenges and was committed to providing the best playing field for International Oil Companies (IOCs) and independents to make the investments.

“As a country, we have the capacity to produce more than two million barrels per day. We have identified the issues bedeviling the sector and are already working on them. I would replicate this programme with the IOCs and independents so that we can make the sector work for all of us and Nigerians at large, and I know that 2024 will be a much better year,” he added.

The minister also highlighted efforts to rehabilitate refineries and ensure the functionality of modular refineries to enhance the country’s refining capacity, meet local and regional demands, and thrive internationally.

The Minister added that he invited the stakeholders to join hands in building a sector that contributes to the growth and development of Nigeria.  

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has called for effective collaboration and optimisation in fostering critical synergy in the oil and gas sector. This is even as industry stakeholders move for a consensus on the importance of ongoing dialogue and cooperation to drive positive change and unlock the full potential of the upstream oil and gas sector in the country.

At a meeting between the NUPRC’s Chief Executive, Gbenga Komolafe, an engineer and the Managing Director NNPC E&P Limited, (NEPL), Mr. Nicolas Foucart, which held at the weekend, both organisations were unequivocal that the industry would be the better for such collaboration, especially in the face of the changing dynamics in the industry.

Read Also: NUPRC mulls cut in oil production cost

Komolafe underscored the importance of optimisation in Upstream operations, citing the potential for cost savings, improved productivity and environmental sustainability. To this end, he called for the deployment of advanced technologies and best practices to streamline business processes, enhance asset performance and mitigate risks associated with exploration and production activities.

“The significance of collaboration among industry stakeholders, including government agencies, exploration and production companies and service providers, is of paramount importance for the industry to achieve greater feats such as strategic partnership and enhanced operational efficiency. Through collaboration, these entities can leverage their expertise, resources and technologies to drive innovation and address the challenges facing the sector,” Komolafe said.

Expressing his commitment to promoting a conducive business environment that encourages investment, good asset stewardship and local capacity development, the NUPRC Chief Executive further harped on the “need for regulatory frameworks that support sustainable growth and social responsibility within the industry.”

In similar vein, Foucart expressed willingness to explore collaborative opportunities that align with the organisation’s strategic objectives.