Indigenous Participation in Nigeria’s Gas Sector Now 50%, Says NUPRC Boss Komolafe

Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe, on Sunday said that with the surging participation of Nigerians in the oil and gas sector, local operators are now responsible for as much as 50 per cent of gas production and 30 per cent of crude oil output.

Speaking in Abuja last night at the Independent Petroleum Products Group (IPPG), Gala in celebration of the industry icons, Komolafe stated that at least 29 assets have been divested in recent years and are now being operated by Nigerians.

“As at today, I am proud to say that indigenous companies contribute about 30 per cent of crude oil and 60 per cent of gas production as well as 40 per cent and 32 per cent of oil and gas reserves respectively,” he added.

He explained that today, seven indigenous companies are among the top 20 with the highest oil reserves in the country.
He stated that the IPPG remains a major force in the exploration of the nation’s hydrocarbons resources for optimal value addition, promising to ensure a clement regulatory environment for the oil producers.

The NUPRC boss recalled that prior to 1970, the Nigerian oil and gas space was dominated by foreign companies in the upstream and downstream sectors, with the first award of oil blocks to two indigenous companies failing because of lack of finances and technical know-how.

Since then, Komolafe noted that there have been a number of programmes where 30 blocks were awarded on sole risk basis, while 24 were awarded between 2003 and 2004.
“Over 29 assets have been divested between 2009 till date presenting an opportunity for indigenous companies,” he stated.

Fifty seven fields, he recalled were recently issued in 2020 resulting in 102 Petroleum Prospecting Licences (PPLs) issued by the commission to indigenous companies.
He revealed that Nigeria has the largest participation of local operators in the oil and gas space among all petroleum producing countries in Africa, arising from a robust local content policy.

“As a regulator, the commission is not oblivious of the threats posed to the development of the Nigeria’s hydrocarbons industry by divestments of the IOCs which is mainly attributable to a hostile upstream environment arising from the menace of crude oil theft and energy transition,” he added.

He urged the IPPG to see the divestment in the IOCs assets as an opportunity rather than a threat, stressing that it was time to look inwards and deploy their competences in the industry.
Komolafe posited that the energy demand in Africa by 2040 will increase by 30 per cent compared to the current level, adding that divestment from onshore and shallow water will give a huge chance to local IPPG members.

He urged IPPG to remain competitive, adopt innovation in decarbonisation and cost efficiency, ensure good relations with host communities and be prepared to make the right investment in gas infrastructure.

According to him, section 52 has set out the oil and gas fund which he said could be good for mergers and acquisitions, partnerships and synergies.
The IPPG is an umbrella body of the indigenous Petroleum Exploration and Production (E&P) companies in Nigeria. The Group was established in 2015 with the primary objective of promoting and advancing the development of the Nigerian energy industry.

It has 25 members which engages government and other industry stakeholders on matters affecting the industry with a view to realising a sustainable industry aspirations and maximising its contribution to the socio-economic development of Nigeria.

Also speaking, Chairman IPPG, Abdulrasaq Isa, noted that improving in-country value extraction of Nigeria’s hydrocarbon resources and supporting the country’s energy security remain one of the lofty goals of the group.

He commended the President, Muhammadu Buhari, for his steps to lift the petroleum industry through the passage of the Petroleum Industry Act (PIA) as well as his support for the group and lauded the transparent conduct of the recent marginal fields bid rounds.

According to him, the event was held to recognise individuals who contributed immensely to the sector in the past years.
Some of those honoured included the Pioneer Chair of Seplat, Ambrosie Orjiako, Austin Avuru of Platform Petroleum, Abdulrasaq Isa of Waltersmith, Dr. Tunde Afolabi of Amni International and Layi Fatona, Pioneer Managing Director of Niger Delta E&P.

Others were: Danjuma Saleh of Waltersmith, Charles Odita, formerly of Shell and Midwestern Oil,Oluseye Fadahunsi , Adebayo Ayorinde, Osariemen Owieadolor, Ignatius Ifelayo, Ebiaho Emafo, Pade Durotoye and Dr Ladi Bada.

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