Energy Transition: Komolafe Seeks Alternative Funding for Hydrocarbon Exploration

Emmanuel Addeh in Abuja

The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, yesterday advised that if Nigeria has to fully exploit its hydrocarbons, it must seek alternative funding as foreign financing gradually dries up.

A statement by the NUPRC said Komolafe who was speaking at the Energy Year Nigeria 2023 Book Launch and Awards Ceremony in Lagos, also argued that Africa’s industrialisation capacity was weak due to the low midstream derivatives and feedstock for industrial development.

According to him, the global momentum and impact of the energy transition have made it mandatory for players in the oil and gas sector to challenge their thinking and evolve innovative measures to mitigate the confounding effect of the energy transition.

He stated therefore, that an innovative approach for funding fossil fuel development in the Nigerian upstream had become more compelling now than ever as a mitigation measure against the onslaught of the energy transition.

 “Alternative funding mechanism must be sought and pursued vigorously to assuage the effect of defunding of fossil fuel. Such mechanisms could include pre-export financing, project financing, oil for service agreements and prioritisation of gas development being the adopted transition fuel,” he stressed.

Furthermore, he stated that attention must be on ways to increase production at reduced unit cost by leveraging improved drilling techniques, enhancing oil recovery and improving oil recovery methods.

Others, he said, include continuous data gathering and studies to optimise discovery requirements to be pursued to reduce the chances of failure and downtime during drilling.

Komolafe also advocated the adoption of advanced technologies crucial in transforming the upstream sector and improving production and delivering benefits to government and investors.

“As the world is fast gravitating towards digitisation and automation in all spheres of human endeavours, we must not be left behind. Embracing technologies like artificial intelligence, big data analytics and the Internet of Things, will revolutionise our operations, enhance safety, and optimise resource utilisation.

“At the NUPRC, we have continued to be innovative and have demonstrated commitment to digitisation and automation of all our operational and regulatory processes in line with our core values of professionalism, responsiveness, ownership and integrity to reduce inefficiencies and optimise processing time cycle in our operations,” he said.

To this end, he pointed out that the NUPRC has embarked on the optimisation of the Enterprise Data Warehouse (EDW) to improve its workflow processes as well as the Revenue Ledger and Information System (RLIS) portal for companies to submit all local and foreign royalty payments.

In addition, Komolafe said the National Balance of Payment portal for reporting inward and outward direct investment associated with crude oil export, Asset Management Web Portal (AMWP) for marginal fields and petroleum facilities, and many others that were intended to improve delivering on the agency’s mandate.

“Accordingly, we are embracing and adopting new technologies and advanced recovery techniques to unlock some identified stranded or bypassed oil and gas resources to increase our reserves and ramp up production. We have commenced the use of smart completion to enable commingling of production from different reservoirs to increase production,” he stressed.

The chief executive emphasised collaboration as a key factor in fostering innovation, suggesting that government, regulatory bodies, oil and gas operators, service companies and other stakeholders should work to create an ecosystem that promotes ideas sharing.

He also called for transparency and mutual support which must encourage the establishment of partnerships, consortiums and joint ventures to tackle complex challenges collectively.

He reiterated the commission’s commitment to regulatory excellence, stating that clear and effective regulations will provide the necessary framework for innovation to thrive while ensuring safety, transparency and accountability in the industry.

“We can also optimise the value chain of our crude oil by developing our domestic refining capacity with multiplying effect on the midstream derivatives such as the petrochemical industry, methanol, ammonia production and LPG that will spur the industrialisation base and improve revenue for economic development,” he said.