The Nigerian National Petroleum Company Limited (NNPCL) is set to be summoned by the Senate to discuss the issue of insufficient funds for the exploration and development of new frontier acreages.
The Chairman of the Senate’s Committee on Gas, Jarigbe Jarigbe, disclosed this information on Friday during a media briefing following a closed-door session with Gbenga Komolafe, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission, and his team.
Africa Today News, New York, has reported that the Petroleum Industry Act of 2021 implemented the Frontier Exploration Fund to facilitate exploration and development in Nigeria’s frontier acreages.
Among the regions mentioned are Anambra, Dahomey, Bida, Sokoto, Chad, and Benue, all of which have either seen no hydrocarbon exploration or have struggled with incomplete development.
The PIA stated further that the Fund, constituting 30 per cent of NNPCL’s ‘profit oil and profit gas’ from various contracts, would finance exploration and development activities in the frontier acreages.
Jarigbe said, ‘We received briefing from the CEO of NUPRC and his team on the activities of the agency. Section 9 subsections 4 and 5 provide that the NUPRC should have a Frontier Acreages Escrow Account for the exploration and development of frontier acreages and that fund is subject to the approval of the National Assembly.’
Read also: 4 In Custody For Vandalising NNPCL Oil Well – Navy
‘Also, Section 22(1) of the Petroleum Industrial Act also provides that the National Assembly has oversight of the budget and expenditure of the NUPRC.’
‘So, we had to interact with the commission on those issues and we discovered that there is no fund raised from 30 per cent oil profit and 30 per cent gas profit as provided for in Section 9(4) of the PIA. We also intend to engage with the NNPCL on that. We don’t know the budget because we weren’t given any figures. We will get the details of that and get back.’
At the interactive session, legislators emphasized the economic significance of gas and its potential as a sustainable resource for the country, acknowledging the global trend towards increased reliance on gas.
Earlier, the NUPRC CEO stressed that gas, like oil, was very crucial to revenue generation, adding that Nigeria’s 208 trillion cubic feet of gas had positioned it as having the largest reserve in Africa and ninth globally. ‘Aside from the fact that gas has been recognised as a transition fuel, for us in the commission, we are focused on wrapping up our gas production,’ he added.
He pointed out that Nigeria’s gas production was slowly but steadily increasing, with initiatives in place to ensure that this rise in production leads to a boost in revenue.
He added, ‘From our dashboard, we recorded 206 tcl of gas last year, and this year it grew to 208 tcl reserve as of September. In terms of production in 2021, we had 7.52 tcl of gas production, and in 2022, it declined to 6.9 tcl but as of September 30 this year, we recorded 7.07 tcl daily gas production.’
‘As a commission, we recognise the importance of gas to the nation, and in our regulatory activities, we are giving critical focus to accelerating gas production.’
Speaking on undeveloped gas fields, he stated, ‘The commission at the moment is trying to look at fields that have undeveloped gas opportunities. As an internal initiative, we have been able to identify all those fields of uncommitted gas.’
‘We intend that by the time we finish with the ongoing engagement with the industry, we would be able to take those gas molecules into the basket and in line with the PIA and other provisions transparently auction those fields.’
‘We believe that exercise will catalyse us as a nation to effectively derive the benefit of gas instead of just keeping those reserves.’
According to him, the principal barrier to gas production was the insufficient availability of funds and infrastructure.