The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has stressed the importance of African market integration and evolving innovative measures to mitigate the confounding effect of the global energy transition drive.
Chief executive of NUPRC, Gbenga Komolafe, speaking during the Energy Year Nigeria 2023 Book Launch and Awards Ceremony in Lagos, emphasised that there must be a concerted effort to drive the integration of the African market, which has a population of about 1.46 million consumers, larger than the combined population of America and Europe.
“We can also optimise the value chain of our crude oil by developing our domestic refining capacity with multiplying effect on the midstream derivatives such as the petrochemical industry, methanol, ammonia production and LPG that will spur the industrialisation base and improve revenue for economic development.”
He added that Africa’s industrialisation capacity is weak purely due to the energy gap and low midstream derivatives and feedstock for industrial development. An economy with low industrialisation is a weak economy.
Komolafe stressed the need to annex such a large market and optimise the value chain of Nigeria’s crude oil.
He proposed developing domestic refining capacity, which would have a multiplying effect on midstream derivatives such as the petrochemical industry, methanol, ammonia production, and LPG. This, in turn, would spur industrialisation and improve revenue for economic development.
The CEO also highlighted the weak industrialisation capacity in Africa due to the energy gap and low midstream derivatives and feedstock for industrial development. He emphasized the importance of finding innovative approaches for funding fossil fuel development in the Nigerian upstream sector as a mitigation measure against the effects of the energy transition. Alternative funding mechanisms such as pre-export financing, project financing, oil for service agreements, and prioritisation of gas development were suggested.
“Alternative funding mechanism must be sought and pursued vigorously to assuage the effect of de-funding of fossil fuel. Such mechanisms could include pre-export financing, project financing, oil for service agreements and prioritisation of gas development being the adopted transition fuel, ” he said.
Furthermore, he stated that attention must be on ways to increase production at reduced unit cost by leveraging improved drilling techniques, enhancing oil recovery and improving oil recovery methods should be leveraged. Others include continuous data gathering and studies to optimise discovery requirements to be pursued to reduce the chances of failure and downtime during drilling.
Engr. Komolafe pointed out that the adoption of advanced technologies is crucial in transforming the upstream sector, improving production and delivering benefits to government and investors. “As the world is fast gravitating towards digitisation and automation in all spheres of human endeavours, we must not be left behind. Embracing technologies like Artificial Intelligence, big data analytics and the Internet of Things, will revolutionize our operations, enhance safety, and optimize resource utilization.
“At the NUPRC, we have continued to be innovative and have demonstrated commitment to digitization and automation of all our operational and regulatory processes in line with our core values of professionalism, responsiveness, ownership and integrity to reduce inefficiencies and optimize processing time cycle in our operations.
“To this end, we have embarked on the optimization of the Enterprise Data Warehouse (EDW) to improve our workflow processes; the Revenue Ledger and Information System (RLIS) portal for companies to submit all local and foreign royalty payments; the National Balance of Payment portal for reporting inward and outward direct investment associated with crude oil export; Asset Management Web Portal (AMWP) for Marginal Fields and petroleum facilities, and many others that are intended to improve delivery on our mandate as provided in the PIA, 2023.
“Accordingly, we are embracing and adopting new technologies and advanced recovery techniques to unlock some identified stranded or bypassed oil and gas resources to increase our reserves and ramp up production. We have commenced the use of smart completion to enable commingling of production from different reservoirs to increase production.”
The CCE emphasised collaboration as a key factor in fostering innovation. He suggested that government, regulatory bodies, oil and gas operators, service companies and other stakeholders should work hand in hand to create an ecosystem that promotes idea sharing, transparency and mutual support; and must encourage the establishment of partnerships, consortiums and joint ventures to tackle complex challenges collectively.
He reiterated the Commission’s commitment to regulatory excellence stating that clear and effective regulations will provide the necessary framework for innovation to thrive while ensuring safety, transparency and accountability in the industry. “The Commission is dedicated to promoting an enabling environment that encourages investments, safeguards the interests of all stakeholders and encourages.