The Nigerian Senate has announced its intention to summon the Nigerian National Petroleum Company Limited (NNPCL) to address concerns regarding the insufficient funds allocated for the exploration and development of new frontier acreages. The revelation came from the Chairman of the Senate Committee on Gas, Jarigbe Jarigbe, following a closed-door session with the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, and his team.
The Petroleum Industry Act (PIA) of 2021 introduced the Frontier Exploration Fund to support exploration and development in Nigeria’s untapped frontier acreages, including areas like Anambra, Dahomey, Bida, Sokoto, Chad, and Benue. These regions have yet to witness hydrocarbon exploration or remain underdeveloped in this regard.
The PIA stipulates that the Frontier Exploration Fund, constituting 30 percent of NNPCL’s “profit oil and profit gas” from various contracts, is earmarked to finance exploration and development activities in these frontier acreages.
Jarigbe explained, “We discovered that there is no fund raised from 30 percent oil profit and 30 percent gas profit as provided for in Section 9(4) of the PIA. We also intend to engage with the NNPCL on that.”
During the interactive session, lawmakers underscored the importance of gas to the economy, noting its role as a sustainable resource. They highlighted the global shift towards gas and emphasized the need to align with this trend.
The CEO of the Nigerian Upstream Petroleum Regulatory Commission emphasized the significance of gas in revenue generation, highlighting Nigeria’s substantial gas reserves—208 trillion cubic feet, the largest in Africa and ninth globally. Despite acknowledging gas as a transition fuel, the CEO emphasized the commission’s focus on boosting gas production and translating it into increased revenue.
The CEO also addressed the challenge of undeveloped gas fields, stating, “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.”
He further outlined the commission’s plan to transparently auction these fields, believing that such initiatives would enable the nation to effectively derive the benefits of its gas reserves. The major obstacles hindering gas production were identified as a lack of funds and infrastructure.
