The Nigerian Senate is set to summon the Nigerian National Petroleum Company Limited (NNPC) to address concerns about the lack of funding for exploring and developing new frontier acreages. This development comes after the enactment of the Petroleum Industry Act in 2021, which introduced the Frontier Exploration Fund to support exploration in areas where hydrocarbon exploration has yet to occur or remains undeveloped.
The Frontier Exploration Fund, constituting 30% of NNPCL’s “profit oil and profit gas” from various contracts, was established to finance exploration and development activities in frontier acreages such as Anambra, Dahomey, Bida, Sokoto, Chad, and Benue.
Chairman of the Senate’s Committee on Gas, Jarigbe Jarigbe, explained that the National Assembly should have oversight over the funds raised from oil and gas profits, as provided for in the Petroleum Industry Act. However, during discussions with the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, lawmakers learned that the required funds had not been raised, and no budget figures were provided.
Lawmakers emphasized the significance of gas to the nation’s economy, noting that it has become a vital resource that can sustain the country. They recognized that gas is gaining global importance as a transition fuel. Nigeria, with its 208 trillion cubic feet of gas, holds the largest gas reserve in Africa and ranks ninth globally.
The CEO of NUPRC highlighted the importance of gas in revenue generation and revealed that efforts are underway to boost gas production. Despite fluctuations in production figures, there is a continued focus on accelerating gas production.
Additionally, the commission is actively identifying fields with undeveloped gas opportunities. These fields will be transparently auctioned in line with the Petroleum Industry Act, allowing Nigeria to derive the benefits of its gas reserves. The primary challenges facing gas production are a lack of funds and infrastructure.
While the funding issue remains, the commitment to enhancing gas production and exploring untapped opportunities offers hope for a brighter future. As the Senate takes action, it is a step toward addressing the challenges and ensuring that Nigeria can harness its immense gas potential for the benefit of its economy and people.
This development highlights the commitment of Nigerian lawmakers to ensure that the country’s gas resources are fully harnessed and contribute significantly to its economic growth and development. It signifies a positive step towards a future where gas plays a pivotal role in Nigeria’s energy landscape and economic prosperity.
Source: [Punch]
