…Industry Can Hit 2.24mbpd – NUPRC

…Hostcom Fund Gets N78.8bn

By Obas Esiedesa, Abuja

The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has blamed companies operating in Nigeria’s upstream sector for the underperformance of the country’s oil and gas industry.

Despite accounting for over 90% of Nigeria’s foreign exchange earnings, the Petroleum Industry contributed less than 5% to the nation’s 2024 Gross Domestic Product (GDP), according to recent data from the National Bureau of Statistics (NBS).

Speaking at the ongoing Nigeria Energy International Summit (NEIS) in Abuja, Senator Lokpobiri emphasized that poor performance in the upstream sector has negatively impacted local refineries, making it difficult for them to access crude oil feedstock for operations.

“The reason why we are struggling in the entire sector is because the upstream is underperforming. And once the upstream succeeds, the midstream will succeed, and the downstream will succeed,” he said.

He stressed the need for more investments to boost crude oil production, ensuring that both domestic and external obligations are met.

“We have a challenge with domestic crude oil supply obligation, which is provided for in the Petroleum Industry Act (PIA), but we cannot keep what we do not produce. If we increase production, we will be able to meet both our domestic and external obligations,” he added.

Also speaking at the summit, the Commission Chief Executive (CCE) of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, stated that while the current crude oil production is 1.75 million barrels per day (mbpd), the industry has the technical capacity to produce 2.24mbpd.

Speaking on the theme “Imperative of Regulatory Efficacy in Optimisation of Upstream Activities,” Komolafe noted that the NUPRC is working with companies to bridge the gap between actual production and potential output.

“The potential for increased production is immense, and NUPRC is committed to unlocking every opportunity. Our efforts to reactivate shut-in wells and leverage low-hanging fruit opportunities will bring us closer to achieving the Project 1MMbopd additional production target recently launched by the Commission,” he stated.

He reiterated that the Commission is working to achieve 40 billion barrels of oil and 220 trillion cubic feet of gas through increased exploration and development activities.

Komolafe disclosed that as part of these efforts, the 2022/2024 bid licensing round was successfully completed, leading to the award of 27 Petroleum Prospecting Licenses (PPLs) across various terrains. He added that preparations are underway for the 2025 bid round, which will follow a new annual licensing round model.

To enhance transparency and curb crude oil theft, the NUPRC has introduced innovative regulations focused on improving hydrocarbon measurement, strengthening accounting systems, and combating crude oil theft.

On community development, Komolafe revealed that oil and gas companies have contributed N78.8 billion and $122 million to the Host Community Development Trust Fund (HCDT), in compliance with the Petroleum Industry Act (PIA) 2021.

“With 154 Host Community Development Trusts (HCDTs) registered and over N78.8 billion and $122 million contributed to the fund, we are steering tangible change. This has led to 198 ongoing projects in host communities, enhancing peace and economic growth in resource-rich regions,” he said.

The NUPRC reaffirmed its commitment to ensuring shared prosperity, calling for greater industry collaboration to transform Nigeria’s hydrocarbon resources into sustainable economic growth and development.