The Nigerian government has wrapped up plans to explore alternative potential funding sources for oil and gas development in the country. This is done so that Nigeria can sustainably capitalize on its petroleum resources regardless of the financial constraints that investors face while operating businesses therein. Mr. Gbenga Komolafe, Commission Chief Executive of the Nigerian Upstream Downstream Regulatory Commission (NUPRC), made the announcement at the opening of the Nigerian pavilion and exhibition stand at the Oil Technology Conference (OTC) in Houston, Texas, USA.
According to Komolafe, the commission has decided to create an alternative funding model for the hydrocarbon industry considering the large sums of funds needed to develop the country’s hydrocarbon resources. He assured that Nigeria will not be left behind in the energy conversation discussion saying that Africa, specifically Nigeria, is in a great position since it possesses the necessary resources to close the energy gap resulting from the current energy revolution. In his opinion, Nigeria has the potential to become a global superpower if its vast oil, gas, and other energy reserves are utilized in a coordinated way.
Nigeria has just established a department to handle decarbonization.
He claims that the passage of the Petroleum Industry Act (PIA) into law has led to a revolutionary change in the petroleum business by establishing a favourable fiscal and regulatory environment. Subsequently, in an interview, he elaborated, saying that the discourse about energy transition is picking up steam around the world, and that it is excellent that Nigeria is paying attention and making adjustments to its policies to bring them in line with the energy conversation. Komolafe indicated that preparations are moving forward, as he cited President Muhammadu Buhari’s commitment to make Nigeria reach net zero emissions by 2060.
Furtherly, the Nigerian government has created a strategy for the country’s energy transformation, and the regulatory commission is working to bring all of its policies and regulations in line with that strategy. Recently, Nigeria has just established a department to handle decarbonization in a way that minimizes carbon footprints, and its regulations are based on the best global standards and practices. He added that the Nigerian government is committed to meeting its pledge made at the COP26 United Nations Climate Change Conference in Glasgow, UK.
Aim is to control the Niger Delta decades of gas flaring.
The Nigerian Gas Flare Commercialization Programme (NGFCP), he added, is moving smoothly as well, and the Commission will shortly be announcing the names of the selected bidders. Komolafe pointed out that this occurs at a time of energy crisis and transitions are on the backdrop of the government’s decade of gas policy. With this progress, the aim is to control the Niger Delta decades of gas flaring which will in turn generate billions of dollars in investment and signature bonuses for the federation.
Recognizing the funding constraints that some of the 2020 marginal field bid round licenses face, he stated that the Commission is also proposing production-based lending engagements to help them acquire needed funds to begin full field development and achieve first oil. He explained that this is a demonstration of the Commission’s attempt to reduce sector issues, emphasizing that the engagement, which is set to begin shortly, will be between the Commission, Petroleum Production Licence (PPL) Awardees, Exploration and Production (E&P) Service Providers, and Banks.
Funding has been a major challenge in executing numerous projects.
Understand that the Commission is putting together a remarkable plan to organize an E&P International Financing Road Show for financiers, investment bankers, private equity investors, and multilateral institutional investors. The initiative aims to highlight the high-value quick-win opportunities available to investors in the recent PPL awards, as well as the continuing National Gas Flare Commercialization Programme and deepwater mini-bid awards. Likewise, Dr. Leemon Ikpea, Chairman of Lee Engineering and Construction Company Limited, whose company is poised to open a fabrication factory in Warri, Delta State, stated that funding has been a major challenge in the execution of the industry’s numerous projects.