NUPRC Eyes $17.67bn Investments in Upstream, 2.12bn Barrels Oil, 13.13tcf Gas Recovery in 5 Years

•Nigeria gets 60% of AfreximBank’s $30bn investment in oil, gas in Africa

•FG will define its own terms on energy transition, says Lokpobiri 

•NLNG pushes LPG production to 1.5m metric tons 

•NNPC, OPEC pledge collaboration to attract investments

Emmanuel Addeh and Peter Uzoho in Abuja

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday projected an investment inflow of about $17.67 billion into the upstream petroleum sector with expected cumulative 2.12 billion barrels of oil and 13.13 Trillion Cubic Feet (TCF) of gas production in the next five years.

The Chief Executive Officer of the commission, Mr. Gbenga Komolafe announced this during his keynote presentation on the third day of the ongoing 7th Nigerian International Energy Summit (NIES), in Abuja, with the theme: “Navigating the New Energy World Order: Security, Transition, and Finance.”

He said the expected investments and production growth resulted from 51 Field Development Plans  (FDPs) approved between 2022 and 2023.

He also disclosed that about $2.5 billion was invested in 175 well drilling while about $2.68 billion investment was recorded in 842 well work-overs and other interventions between 2022-2023.

“(We have achieved) a total of 51 Field Development Plans (FDPs) approved in the year 2022 -2023 expected to attract a total $17.64 billion investment inflow as well as deliver cumulative oil recovery and gas recovery estimated at 2.12 billion barrels and 13.13 trillion cubic feet respectively in the next five years.

“(Also), a total of circa $2.5 billion investment in 175 wells drilling in the year 2022 – 2023. A total of $2.68 billion investment in 842 well work-overs and other well intervention activities in the year 2022 – 2023 resulting in increased average oil production.

“ We have further achieved 275 per cent growth in rig count from just eight in 2021 to average of 30 in the past one year,” he added.

He also listed early first oil achieved in recently streamed fields through accelerated FDPs.

Some of the fields, he said, include: Ikike (Total), Efe field (Newcross), Utapate, (NEPL), Akubo Field (SEEPCo), Oyo (General Hydrocarbon) and several others streamed under Extended Well Tests including Ethiope, Omefejo, Ofa, Olure, Ibom, Apani, Kalaekule, among others.

Komolafe said the commission has also intensified efforts in collaborating with the International Oil Companies (IOCs) to ensure accelerated maturation and development of some high volume deep offshore assets.

He said the Petroleum Industry Act (PIA) was being effectively implemented for growth in oil and gas reserves as well as achieving the national average daily production target set at 2.5 million barrels of oil and condensate per day in the near term.

The oil and gas reserves in Nigeria, he said, represents 30 per cent and 34 per cent of the African oil and gas reserves respectively.

He explained that a recent study by the commission revealed that growth in gas demand outstrips supply, noting that between 2020 and 2030, demand is expected to grow exponentially at a compound annual growth rate of 16.6 per cent p.a.

“Natural gas production is projected to increase from 8.0 bcfd in 2020 to 12.2 bcfd in 2030 driven by major projects such as NLNG Train 7 & Train 8, Nigeria/Morocco pipeline, Ajaokuta-Kaduna-Kano (AKK) Natural Gas Pipeline Project, and so many other gas projects,” he added.

The NUPRC chief executive, however, assured operating companies, particular the sellers and buyers in the pending divestment transaction that the regulator will not block divestment deals, but was only making sure that the deals followed due process.

Despite the low emission attributed to Nigeria, he said the commission was effectively spearheading the national drive to achieve zero flare target by year 2030 and netzero carbon emission by year 2060 through several initiatives, including the Gas Commercialisation Programme.

He said, “Let me take time to respond to issues raised by the Chairman of the Independent Petroleum Producers Group (IPPG) in respect of the issue of divestment because it is critical for us as regulator to respond in that respect. We, acting on behalf of the government of Nigeria as the regulator of the upstream, recognise that divestment is the right of licensees or operators.

“It’s a business decision clearly, but in doing so, the position of the regulator is that the divestment must follow due process. And for that reason, we have put in place robust divestment processes which we believe that if followed, will be in the interest of the government, the host communities, the seller and the buyer.

“So, what we are doing as regulator is to ensure that both the buyer and seller and of course, the government and the host communities are all on the same page.

“So, please, let the message be taken home that the regulator is in no way trying to be a showstopper in this respect. We are working collaboratively with the parties to the divestment to ensure that robust regulatory process that have been put in place intuitively by the NUPRC is followed,” he added.

In his remarks, the President of AfreximBank, Prof. Benedict Oramah, pointed out that Africa’s aspiration in the area of energy security and energy transition will remain aspirations, unless it  has access to adequate funding resources that it controls.

With a lot of international banks withholding funding from the oil and gas sector, Oramah, who was represented by an Executive Vice President of the bank, Mr. Haytham El Maayergi, said investment in the industry had become severely limited, with the corresponding impact on exploration and production.

“Afreximbank has intervened in a big way, quickly becoming the largest financier of oil and gas deals on the continent. The support provided to the sector by the bank is in excess of $30 billion. Nigeria has been one of the largest beneficiaries accounting for almost 60 per cent of the total funding of the sector.

“And it’s important to point that AfreximBank has been able to make those modest contribution in the oil and gas sector because the bank is predominantly African in ownership and in control,” he stated.

Also, the Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri, stated that Nigeria will not be cajoled into jettisoning the production of fossil fuels, insisting that the country will handle the energy transition programme on its own terms.

The minister assured that   Nigeria was not against transition but would transit in a more environmentally friendly and sustainable way. “You can never find any better climate for oil businesses than Nigeria”, he noted.

Lokpobiri reiterated the resolve of the government to  provide support and create the enabling environment for oil companies and businesses to thrive.

In his brief remarks, the Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo restated the adoption of gas by the federal government as its transition fuel.

Besides, the Nigerian Liquefied Natural Gas Limited (NLNG) disclosed that it had ramped up its LPG production to 1.5 million metric tonnes per annum as of 2023 while it supplied 493,000 tons to the market in the same year.

The General Manager, Finance, NLNG, Mrs Fatima Adanan, announced the company’s LPG production rise while speaking during a panel at the NIES summit.

“Now, when we started, we were producing 70,000 metric tons. Today, we’re producing upwards of 1.5 million metric tons of LPG and this LPG and our sole designated distribution point is Nigeria. So, part of our vision as Nigeria LNG is to make sure that we make Nigeria a better place.

“So, 1.5 million tonnes is our own production for 2023. So, this number is from NLNG. Nigeria requires a lot more. So, importation will be ongoing. But as NLNG also grows, we will also be able to provide more,” Adanan said.

Meanwhile, the Nigerian National Petroleum Company Limited (NNPC) and the Organisation of the Oil Exporting Countries (OPEC) have pledged to work closely together to achieve the nation’s aspirations to attract investments and grow production.

The two organisations came to this accord when the Secretary General of OPEC, Haitham al-Ghais, paid a courtesy visit to the Group Chief Executive Officer of NNPC, Mr. Mele Kyari, at the NNPC Towers yesterday.

Speaking at the event, al-Ghais stated that OPEC was completely aligned with NNPC Ltd.’s vision as captured in its payoff line: “Energy for Today, Energy for Tomorrow” because of its inclusive view of energy as opposed to the view being pushed in some quarters that some sources of energy were bad.

He disclosed that in spite of the pushback on oil and gas, the world would require about $14 trillion investments from now till 2035 to be able to meet global demand, and urged NNPC to do everything to tap into that opportunity to raise its production to continue to be a reliable source of energy to the world.

“We will continue to ensure that the market is stable. The global market has to be stable in order for Nigeria to be able to attract investors. If there’s volatility, if there’s no stability in the market, it will only create havoc for everybody, whether it’s a producer or consumer country.

“ So, we will continue to do that in OPEC. We count on Nigeria’s support”, the OPEC helmsman said.

In his remarks, Kyari said NNPC was working very hard to recover lost production and provide the right fiscal environment to attract investments.

He expressed appreciation to OPEC for its support to Nigeria, adding that NNPC Ltd will continue to support the organization in whatever way it could.

Other speakers on the third day of the programme yesterday were: The Chairman, IPPG, Mr. Abdurazaq Isa, the Chairman, Oil Producers Trade  Section (OPTS) and Chairman, Shell,  Mr. Osagie Okunbor and Group Managing Director, Gambia National Petroleum Commission, Mr. Baboucarr Njie.

Others included: General Manager, Strategy and Investments, Ghana National Petroleum Corporation, Dr. Kwame Baah-Nuakoh; Chief Geoscientist, National Petroleum Corporation of Nambia, Mr. Anthony  Chatu, among many others.