Prospective indigenous player should perceive the International Oil Companies divestment in some of the upstream assets as an opportunity rather than a threat to the development of the Nigerian upstream petroleum sector,Gbenga Komolafe the Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said.
Komolafe disclosed on Monday,while speaking on the topic ‘IOC Divestments – Nigeria’s Energy Security, and the Role of the IPPG in this new mix’ at the Independent Petroleum Producers Group (IPPG) dinner at the Nigerian Oil and Gas Conference.
He advised that it was high time to look inwards in the sector to proof the capability of the local content in value addition and optimizing development of the nation’s hydrocarbon resources.
He said:”Therefore, we encourage you as indigenous players across the value chain to deploy your competency and ingenuity in promoting vibrancy and capacity utilization in the industry.Remarkably, I am proud to say that indigenous companies contribute about 30% of crude oil and 20% of the gas production, as well as 40% and 32% of oil and gas reserves, respectively. Furthermore, seven (7) indigenous companies are among the top twenty (20) companies with the highest oil reserves in Nigeria.
“It is estimated that the energy demand across Africa in 2040 would increase by about 30 percent compared to the current level. Consequently, the divestment of the IOC away from our onshore and shallow water terrains present a massive opportunity for new operators of those assets, in which the IPPG is better positioned to take advantage of in order to meet the increasing energy demand.
He also said the Commission expects the IPPG to stay competitive, optimise future energy security and be resilient in our oil and gas extractive industry.
He advised that the IPPG should adopt an innovative and pragmatic approach towards operational excellence to include decarbonisation and improvement in cost efficiency; creation of enabling environment with their host communities and utilization of appropriate skills and capabilities.
He added:”In this new mix, the IPPG is expected to have an increased focus on natural gas exploitation and utilization. As you position to take the opportunity being presented by the divestments, the need to be prepared to make the necessary investments for gas pipeline infrastructure, gas processing facilities, meeting domestic gas delivery obligations to strategic sectors of the economy, and global gas export requirements should be in focus” .
He assured that the Commission would continue provide the requisite regulatory support in line with the provisions of the PIA 2021, stressing it is encouraging that Section 52 in the PIA provides for the establishment of the Midstream and Downstream Gas Infrastructure Fund.
He advocated the need for strengthening the capacity of IPPG through collaboration, strategic alliances, mergers and acquisitions targeted at producing synergies and large independents that can compete with multinationals.
