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Increase in crude oil price, energy disruption call for security – Komolafe

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Oil races to near six-month highs on Iran sanctions, stocks rise

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says global increase in crude oil price occasioned by the conflict between Russia and Ukraine and ensuing energy disruption call for geopolitical energy security and sustainability.

Mr Gbenga Komolafe, the Commission’s Chief Executive, NUPRC, made this known on Thursday in Abuja at the Oloibiri Lecture Series and Energy Forum 2022 (OLEF), organised by the Society of Petroleum Engineers (SPE).

The forum themed: “Global Energy Transition: Implications on Future Investments in the Nigerian Oil and Gas Industry,” was hosted and sponsored by the Petroleum Technology Development Fund (PTDF).

Komolafe, represented by his Special Technical Adviser, Mr Abel Nsa, said the attendant disruption of the global oil demand-supply chain had reawakened the call for sustainability in the industry.

“For instance, in the United Kingdom, the North Sea Transition Authority (NSTA) – formerly the Oil and Gas Authority, is envisaging a leasing and licensing round for oil and gas exploitation and future projects.

“Thereby, reassuring the relevance of oil and gas in the future energy mix.

“Given this outlook, it is evident to note that in meeting the growing energy demand in the short and medium term, we need to carry out further exploration and development drilling,” he said.

This, he said, would optimise reservoir extraction, drill into new targets, and employ technological advances to maximise production yields for appropriate energy mix.

The NUPRC boss said the global energy transition could pose great challenges to future investments in the Nigerian oil and gas industry, but stakeholders were working assiduously to mitigate every negative impact.

According to him, as all geopolitical zones grasp with the appropriate energy mix for their energy security, Nigeria is poised toward the development of its untapped huge gas resources to achieve economic growth and energy security.

He said the commission, empowered by the Petroleum Industry Act (PIA) 2021, had steered its focus toward working with all stakeholders to ensure business investments in the oil and gas sector were adequately protected.

Komolafe said that in the light of the global energy transition, funding for oil and gas projects, was a huge challenge as funding sources were now predominantly channelled toward renewable energy projects.

He further said that the clarity in the fiscal regime provided by the PIA would hopefully help to turn the tide around, especially as regards some important upstream projects that have been stalled due to financing.

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 upwards of 800,000 BOPD to Nigeria’s production figures.

He said it was, therefore, imperative for Nigeria to take advantage of the present 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 the necessary engagements are made, and that innovative ways to fund oil and gas projects are explored, in order to bring these projects back on stream,” he added.

Komolafe said it was striving to ensure that all bottlenecks associated with regulatory processes were eliminated or minimised, to ensure seamless operations, as it gradually roll out the key policy initiatives necessitated by the PIA.

According to him, section 92 of the recently enacted PIA 2021 provides a flexible tool for honouring investment guarantees and contract sanctity.

Komolafe also commended the SPE Nigeria Council on its effort to proffer proactive solutions and recommendations for energy transition and sustaining the forum up to its 22nd edition, in commemoration of Nigeria’s first commercial oil discovery at Oloibiri, Bayelsa State in 1956.

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Emmanuella Anokam

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