Lokpobiri: FG Will Rekindle Divesting IOCs’ Interest in Oil Sector

·      We have surpassed revenue projections, says Komolafe

·      N68bn NUPRC building set for inauguration in August 2024

Emmanuel Addeh in Abuja

Minister of State, Petroleum Resources (Oil), Senator Heineken Lokpobiri, yesterday, assured that with the renewed drive to create the right business environment in the country, the Bola Tinubu administration would ensure the interest of divesting oil companies was renewed in the sector.

Lokpobiri spoke when he paid a visit to the headquarters of the Gbenga Komolafe-led Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as well as the ongoing multi-storey permanent site of the commission in Abuja.

The minister stated that the concerns raised by the operators, especially in the area of security, were being addressed. He expressed the hope that once the requests of the international oil companies (IOCs) were met, they would have no need to exit the country.

Lokpobiri stated, “We are already reassuring investors in the sector that this is a new government of renewed hope and we’ve held series of meetings with the operators in the industry.

“They raised concerns. One of them is security. We’re also trying to address the security concerns that they have. That was why myself, my colleagues, the Minister of Defence and the National Security Adviser (NSA), recently, went to see things for ourselves.

“Every day, sometimes we wake up by 2am when there are concerns, security concerns and we address them. We want to use the opportunity to re-emphasise the commitment of government to do whatever we can to rekindle the interests of the IOCs.

“Once we address these concerns, they will come back. They cannot go away from us. They have been here for 60 years, and they know that Nigeria is the best investment destination.

“That is why we are saying that agencies that are regulating the sector need to have all the tools they need to work, so that nobody will complain that we’re not creating the enabling environment for them.

“But we are doing whatever we can and they know that this is the new government of renewed commitments and we will do whatever we can to regain their confidence and they will come back when those things are in place.”

On the NUPRC building, Lokpobiri explained that the Nigerian economy was largely dependent on oil, pointing out that there is the need to provide a conducive environment for the workers of the commission.

He stated, “I’ve been briefed by the contractor. They raised a few concerns. We’re going to walk through that. And we believe that when this building is completed, to whom much is given, much will be expected. They’re already doing so much, despite the very difficult working environment.”

Although delayed, the minister said he was glad that steady progress was being made on the building project.

In his remarks, the commission’s Chief Executive, Komolafe, noted that in terms of revenue generation, as of July, the commission had surpassed 50 per cent of its revenue generation target for the year and that in the last three years it had always been meeting and surpassing revenue projections.

He added NUPRC was also focused on increasing the oil and gas reserves in the country, which currently was about 37 billion barrels of oil and 208 TCF of gas.

Komolafe pointed out that the commission was stepping up the transparency of hydrocarbon accounting, to ensure that every barrel was properly accounted for.

He said NUPRC was floating 82 Host Community Development Trusts to serve as a platform for implementation of the provisions of the Petroleum Industry Act (PIA) to ensure peace in the host oil communities.

According to him, “We are trying to ensure a reduction in the unit cost of production targeted at ensuring that the Nigeria upstream is attractive to investors because investors normally would prefer where there is a good rate of return on investment. So reducing the unit cost of will make our jurisdiction an investment destination.”

On the current status of the building project, he stated that the contract was executed in 2021, and was being handled by Julius Berger Nigeria PLC, with a total cost of N68.5 billion. He added that the completion date was now set for August 2024.

Komolafe said, “The mode of payment is bifurcated: it has the forex and the local component and it is 65 per cent forex and 35 per cent local. So at the moment, the project is on and has attained up to the 11th floor.”

The project manager of Julius Berger Nigeria Plc, Luis Sousa, listed inflation, naira devaluation, and the effect of Covid-19 as some of the challenges that the project faced.

Sousa explained that due to the Russian-Ukraine crisis, the supply chain of some materials was disrupted.

Principal Partner, Artec Practice Limited, Taofik Popoola, in an overview of the project, said the site installation and mobilisation had recorded 100 per cent, planning and design 95 per cent, construction 96 per cent, and procurement 48 per cent.

Popoola also listed the challenges to include: the pandemic, increase in prices of materials, and devaluation of the naira, which was N385 to the dollar at the time the contract was signed, among others.