Emmanuel OchayiMr. Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has reported a staggering drop in annual upstream capital expenditure (CAPEX), which fell from a towering $27 billion in 2014 to a meager $6 billion in 2022, marking a remarkable 74% decrease.
In a stunning revelation at the World Petroleum Congress (WPC), the Nigerian government has disclosed a seismic shift in the country’s oil and gas industry.
Speaking at the WPC in Calgary, Canada, Mr. Komolafe, represented by Executive Commissioner Mr. Kelechi Ofoegbu, identified a multitude of factors behind this precipitous decline in CAPEX, including regulatory uncertainty and global defunding of fossil fuel development.
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He noted, “Years preceding the enactment of the Petroleum Industry Act (PIA) significantly impacted investment in the industry, as most International Oil Companies (IOCs) deprioritized Nigeria in their portfolios, redirecting CAPEX to other countries.”
However, there’s a glimmer of hope on the horizon. Nigeria’s rig count, which had plunged from seventeen active rigs in 2019 to a low of seven in 2021, has recently surged to 31 by August 2023.
This remarkable increase, Mr. Komolafe explained, is a testament to investors’ growing confidence in the PIA and its effective implementation by the regulator.
Mr. Komolafe also emphasized Nigeria’s commitment to leveraging this momentum by attracting more investments and revitalizing the Nigerian upstream sector. He credited the PIA for repositioning the Nigerian petroleum sector with efficient governing institutions, clear roles, transparency, and accountability, creating a conducive environment for petroleum operations.
With Nigeria’s vast gas reserves and a clear focus on clean energy, Mr. Komolafe highlighted the country’s dedication to natural gas as a transition fuel, aligning with a net-zero emission commitment by 2050.
He pointed to the Decade of Gas program as a critical initiative to drive industrial development through the strategic use of natural gas.
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