NNPC Limited To Meet Senate Over Financing Of Exploration, Frontier Acreages

The Senate would be meeting with the leadership of the Nigerian National Petroleum Company Limited over the financing and development of new frontier acreages.

The Senate, through the Chairman, Committee on Gas, Jarigbe Jarigbe made this known on Friday while briefing the press after a closed-door session with the Chief Executive Officer of Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, and his team.

The Petroleum Industry Act, 2021 introduced the Frontier Exploration Fund to support exploration and development in Nigeria’s frontier acreages

These areas include regions like Anambra, Dahomey, Bida, Sokoto, Chad, and Benue where hydrocarbon exploration is yet to occur or remains undeveloped.

The PIA further stated that the Fund, constituting 30 per cent of NNPC’s “profit oil and profit gas” from various contracts, will finance exploration and development activities in these frontier acreages.

Senator Jarigbe said, “We received a briefing from the CEO of NUPRC and his team on the activities of the agency.

“Section 9 subsection 4 and 5 provides that the NUPRC should have a Frontier Acreages an exco account for the exploration and development of frontier acreages and that fund is subject to the approval of the National Assembly.”

He added “Also, section 22 subsection 1 of the Petroleum Industrial Act also provides that the National Assembly oversights the budget and expenditure of the NUPRC.

“So, we had to interact with the commission on those issues and we discovered that there is no fund raised from 30 percent oil profit and 30 percent gas profit as provided for in Section 9 subsection 4 of the PIA.

“So, we also intend to engage with the NNPCL on that.

“We don’t know the budget because we weren’t given any figure. We will get details on that and get back,” Senator Jarigbe added.

The lawmakers during the interactive session, noted that the issue of gas in the economy was becoming very important and inexplicable, like a resource that can sustain a nation.

They further noted that scientifically, the world is gravitating towards gas.

Earlier, the CEO OF NUPRC buttressed the lawmakers that “Gas is very crucial in the revenue generation of our country, just like oil, it is equally very critical.

“Aside from the fact that gas has been recognised as a transition fuel and for us in the commission, we focus on rapping up our gas production.”

Komolafe stated that Nigeria has “37 barrels of crude oil as it relates to gas, reserve number of 208 tcl of gas that makes us the largest gas reserve in Africa and the ninth globally.”

He further claimed that Nigeria was gradually gaining strength in terms of gas production even though efforts were put in place to ensure production which would amount to revenue generation.

He said, “From our dashboard, we recorded 206 tcl of gas last year, and in this year it grew to 208 tcl reserve as of September.

“In terms of production in 2021, we had 7.52 tcl of gas production, and in 2022, it declined to 6.9 tcl but as of September 30 this year, we recorded 7.07 tcl of our daily gas production.

“As a commission, we recognize the importance of gas to the Nation, and in our regulatory activities, we are giving critical focus to accelerating gas production in the country. “

The NUPRC boss further noted that the agency recognised that given the development in the world and the unfolding of situation in the Middle East like Ukraine, they were ensuring that Nigeria produces more in other to ensure more gas production to allow for better revenue generation.

Komolafe noted, “The commission at the moment is trying to look at fields that have undeveloped gas opportunities, and as an internal initiative; we have been able to identify all those fields of uncommitted gas.

“We intend that by the time we finish with the ongoing engagement with the industry, we would be able to take those gas molecules into the basket and in line with the PIA and other provisions to transparently auction those fields.

“We believe that exercise will catalyze us as a nation to effectively derive the benefit of gas instead of just keeping those reserves.”

He, however, emphasized that the major challenge militating against gas production was a lack of funds and infrastructure.