Increase in crude oil price, energy disruption call for security – Komolafe
NNN: The Nigerian Petroleum Upstream Regulatory Commission (NUPRC) says the global spike in the price of crude oil caused by Russia and Ukraine and the subsequent energy disruption calls for geopolitical energy security and sustainability.
Mr. Gbenga Komolafe, Executive Director of the Commission, NUPRC, unveiled this in Abuja at the Oloibiri Conference Series and Energy Forum 2022 (OLEF), organized by Petroleum Engineers (SPE).
The theme of the forum: “Global Energy Transition: Implications for Future Investments in the Nigerian Oil and Gas Industry”, was organized and sponsored by the Technology Development Fund (PTDF).
Komolafe represented technical adviser Mr. Abel Nsa said the concomitant disruption of the global oil demand and supply chain had reawakened the call for sustainability in the industry.
“For example, in the UK, the North Sea Transition Authority (NSTA), formerly the Oil and Gas Authority, is considering a round of leasing and licensing for oil and gas development and future projects.
“Therefore, reaffirming the relevance of oil and gas in the future energy mix.
“Given this scenario, it is clear that to meet the growing demand for energy in the short and medium term, we need to carry out more exploration and development drilling,” he said.
This, he said, would optimize reservoir extraction, drill new targets and employ technological advances to maximize production yields for the right energy mix.
The NUPRC chief said the global energy transition could pose major challenges for future investment in Nigeria’s oil and gas industry, but stakeholders were working assiduously to mitigate every negative impact.
According to him, as all geopolitical zones grasp for the right energy mix for its energy security, Nigeria is poised for the development of its vast untapped gas resources for economic growth and energy security.
He said the commission, authorized by the Industry Act (PIA) 2021, had been focused on working with all stakeholders to ensure business investments in the oil and gas sector were adequately protected.
Komolafe said that in light of the global energy transition, financing oil and gas projects was a major challenge as funding sources were now predominantly channeled towards renewable energy projects.
He further said that clarity on the fiscal regime provided would help turn the tide, especially with regard to some major projects that have been stalled due to ficing.
Some of these projects, including the Preowei project, Bonga South West Aparo project, and Bonga North project, among others, when completed, have the combined capacity to add over 800,000 BOPD to Nigeria’s production figures.
He said that it was therefore imperative that Nigeria take advantage of the current high crude oil prices, as well as the emergence of the energy transition, to fully exploit our hydrocarbon resources in a timely manner.
“The commission will ensure that all necessary compromises are made and that innovative ways of financing oil and gas projects are explored, to get these projects back on track,” he added.
Komolafe said it was striving to ensure all bottlenecks associated with regulatory processes were removed or minimized, to ensure smooth operations, as it gradually rolls out necessary key policy initiatives.
According to him, section 92 of the recently enacted PIA 2021 provides a flexible tool to honor investment guarantees and the sanctity of contract.
Komolafe also commended the SPE Nigeria Council for its effort to offer proactive solutions and recommendations for the energy transition and sustain the forum until its 22nd edition, in commemoration of Nigeria’s first commercial oil discovery in Oloibiri, Bayelsa State in 1956.
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