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From Adewale Sanyaolu, Houston, Texas
The Federal Government has said it has concluded plans to explore alternative funding models for the country’s oil and gas resources.
Commission Chief Executive (CCE), Nigerian Upstream Downstream Regulatory Commission (NUPRC), Mr. Gbenga Komolafe, stated this at the opening ceremony of the pavilion and exhibition stand of Nigeria oil and gas companies at the Oil Technology Conference(OTC) which opened in Houston, Texas, United States of American, yesterday.
Komolafe said the need to develop the country’s hydrocarbon resources requires huge funding, hence the decision of the commission to develop alternative funding model for the industry.
He assured that Nigeria will not be left behind in the energy conversation discussion as the country is a place where needs meet opportunities.
He added that African and by extension Nigeria is well positioned because it has all it takes to bridge the energy gap in the light of energy transition.
Komolafe maintained that Nigeria with abundant oil and gas reserves and other sources of energy mix, is well positioned to be a super power if all the hydrocarbon resources are well cordinated
Komolafe disclosed that the signing into law of Petroleum Industry Act (PAI) has created a landmark reform in the petroleum industry which included attractive fiscal and regulatory regime.
Recall that the NUPRC in its bid to grow the country’s oil production and address funding setbacks confronting marginal field investors, recently concluded arrangments for a production- based lending engagement that will help operators source needed capital to commence full field development towards hitting first oil.
This comes as some successful investors under the 2020 Marginal Field Bid Round licences are finding it difficult to source funding for the development of the various assets.
NUPRC said the engagement which is planned to commence soon will be between the Commission, Petroleum Production Licence (PPL) awardees, exploration and production (E&P) service providers and Nigerian Banks.
Komolafe added that the intervention by NUPRC was to provide platforms for strategic partnership/alliance between the awardees and the service providers for well re-entry and drilling services. The arrangement is to be offered on service fee recoverable by the service providers from production to be attached.
He stated that the Commission has already concluded plans to organise an E&P International Financing Roadshow in Abuja in the coming weeks for financiers, investment bankers, private equities and multi-lateral institutional investors. According to him, the initiative is to showcase the high value quick win oppourtunities available to investors in the recent Petroleum Prospecting License(PPL) awards, the on-going National Gas Flare Commercialisation Programme, as well as the on-going mini-bid awards.
He explained that the strategy will equally ease the challenges thrown up by the initial corporate governance issues that arose before the inauguration of the Petroleum Industry Act (2021), saying the Commission has developed a Corporate Governance Framework for upstream petroleum operations.
The framework, he stressed is currently at an advanced stage of internal review and stakeholder engagements required for its finalization.
This, he said, is to enhance sustainability, environmental and corporate governance requirements and to facilitate capital attraction by investors for the optimal and efficient development of the PPLs and other assets.
To facilitate dynamic data gathering and accelerate the achievement of ‘first oil’, he stated that the Commission initiated the revision of the subsisting Extended Well Test (EWT) Guideline to enhance early cash flow and speed up the journey to first oil. The strategy has already yielded positive results with 16 companies submitting Field Development Plan (FDP), twoalready commencing unitization processes, six re-entries and twohaving gone through the EWT.
