The Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri yesterday blamed companies operating in Nigeria’s upstream sector for the underperformance of the oil and gas industry.
Data from the National Bureau of Statistics showed that despite contributing over 90 percent of Nigeria foreign exchange earnings, the petroleum industry contributed less than five percent to the GDP.
Speaking at the ongoing Nigeria Energy International Summit, NEIS, in Abuja, Senator Lokpobiri noted that the poor performance by the companies has meant that local refineries were struggling to get the needed crude oil feedstock for their 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.
“I believe that the only way we can increase our upstream development is by investments. We have a challenge about domestic crude oil supply obligation, which is provided for in the Petroleum Industry Act (PIA) but we can not keep what we do not produce and you can not keep what you have already committed. I do know that most of the companies operating in Nigeria have commitments when they are raising funds for investment.
“But if we increase our production, we will be able to get more volumes, satisfy both our domestic obligation and also satisfy our own external obligation.
“Let’s work together to change the narrative so that we can have a successful upstream that will translate to a successful midstream and downstream. And ultimately transforming these hydrocarbon resources to economic prosperity. Transforming these resources to revenue to be able to finance critical sectors of our economy”, he stated.
n his address, the Commission Chief Executive, Nigerian Upstream Petroleum Regulatory Commission, NUPRC, Engr Gbenga Komolafe pointed out that while the upstream companies were producing 1.75 million barrels per day presently, they have the technical potential to produce 2.24 million barrels per day.
Speaking on the theme: Imperative of Regulatory Efficacy in Optimisation of Upstream Activities, Engr Komolafe explained that the Commission is working with the companies to bridge the gap between actual production and potential capabilities.
According to him, “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 fruits opportunities will bring us closer to actualisation of the Project 1MMbopd additional production target recently launched by the Commission”.
He noted that “in pursuit of our goal to reach 40 billion barrels of oil and 220 trillion cubic feet of gas, we have vigorously pursued strategies to stimulate exploration activities and accelerate development. As part of these efforts, the Commission successfully completed the 2022/2024 bid licensing round and awarded 27 Petroleum Prospecting Licenses (PPLs) across various terrains. Efforts are also on for the 2025 bid round, embracing a new paradigm of annual licensing rounds”.
