At OTC in US, Komolafe Says FG Fine-tuning Oil Industry Policies, Regulations to Meet Energy Transition Targets

•Says winners of gas flare sites to be announced soon  

•Pushes for establishment of African Forum of Regulators to enhance growth of the continent’s oil industry

Emmanuel Addeh in Abuja and  Peter Uzoho in Lagos

The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe, yesterday, disclosed that the federal government was fine-tuning and aligning its oil and gas policies and regulations to meet Nigeria’s and the global energy transition targets.

Komolafe, stated this during an interview with journalists at the ongoing 2023 Offshore Technology Conference (OTC) holding in Houston, Texas, United States, with theme: “Delivering the Future of Offshore Technology.”

He also informed that winners of gas flare sites in the ongoing National Gas Flare Commercialisation Programme (NGFCP) would soon be announced.

Komolafe, equally said Nigeria would be recommending the establishment of ‘African Forum of Regulators’, to enable the benchmarking and standardisation of regulatory framework in the upstream oil and gas sector across African nations.

The NUPRC chief executive reiterated the federal government’s commitment to achieving carbon neutrality, ending energy poverty, and driving economic growth in the country.

He said: “Energy transition conversation is gaining momentum globally and as a nation, we need to keep track of that conversation. Good enough, Nigeria is keeping track of the conversation and we are finetuning our policies to be in alignment with the energy conversation.

“Preparation is being progressed and recall that President Muhammadu Buhari made a commitment that the nation will attain net zero emission by 2060. Therefore, Nigeria has developed its energy transition plan and for us as the regulatory commission, we are fine-tuning our policies and regulations to be in alignment.

“Currently, we have created a department to deal with decarbonisation in a manner that will reduce carbon footprints credit and our regulations are equally benchmarking global best standards and practices.”

He stated that the Nigerian government was firmly working towards its commitment at the United Nations Climate Change Conference (COP26) in Glasgow, Scotland, to cut its carbon emission to net zero by 2060.

Providing updates on the NGFCP, Komolafe said the process was progressing well, adding that very soon, the commission would announce the names of the successful bidders.

He noted that this was coming at a time energy crisis and transition were on the backdrop of government’s Decade of Gas policy.

In recognition of the funding challenges facing some of the awardees of the 2020 marginal field bid round, Komolafe said the commission was also planning production-based lending engagement that would help them source needed capital to commence full field development towards hitting first oil.

He explained that this was an initiative of the commission to ease challenges in the sector, stressing that the engagement which was planned to commence soon would be between the NUPRC, Petroleum Production Licence (PPL) awardees, Exploration and Production (E&P) service providers and banks.

Komolafe explained, “It is to provide platforms for strategic partnership/alliance between the awardees and the service providers for well re-entry and drilling services. The arrangement is to be offered on service fee recoverable by the service providers from production to be attached.

“What the commission is doing is a landmark plan to organise an E&P International Financing Road Show for financiers, investment bankers, private equities, and multi-lateral institutional investors.

“The initiative is to showcase the high value quick win opportunities available to investors in the recent PPL awards, the ongoing National Gas Flare Commercialization Programme, as well as the ongoing deep-water mini-bid awards.”

He added that the commission had developed a corporate governance framework for upstream petroleum operations, saying this was to create clarity and restore confidence in the industry, which is very important.

He maintained that the framework was to enhance sustainability, environmental and corporate governance requirements and to facilitate capital attraction by investors for the optimal and efficient development of the PPLs and other assets.

Komolafe commended the leadership of the Petroleum Technology Association of Nigeria (PETAN) for leading a quality delegation to the 2023 OTC Conference.

He urged them to sustain the tempo and continue the development of indigenous capabilities in the oil and gas sector.

“PETAN is indeed doing us national proud by extending their capacities in other frontiers in Africa,” he said.