Olusola Bello
The Independent Petroleum Producers Group (IPPG) has asked for the support of the Federal Government so that they can actively participate in the divestment exercise by international oil companies.
This was even as the government said it is working at creating and attracting financing initiatives for investors via constant engagement with stakeholders in the oil and gas industry.
The government also said it was working assiduously to reduce the high rate of crude oil theft as well as improve subsequent marginal field bid rounds (MFBR).
The appeal for support came up when Gbenga Komolafe, Chief Executive (CCE) Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had an interactive session with the Independent Petroleum Producers Group (IPPG) in Lagos
According to NUPRC boss, the President, Muhammadu Buhari, has provided robust fiscal provisions in the Petroleum Industry Bill Act (PIA) to enable investments in the upstream sector, stressing that this can only be achieved through various partnerships.
He explained that the industry was facing critical challenges and with discussions going on in Glasgow (COP26), it was understood that the outcome of the deliberations there will equally impact the industry due to the fact that they (stakeholders) are setting the global warming standard at 1.5 degrees Celsius as they target at impacting financing in the energy transition regime.
“I want to assure your members (IPPG) that we will not because of energy transition abandon our hydrocarbon and so we really need to think outside the box and also we want to get feed-back from our stakeholders to see how we can get a structural financing group to commit on financing critical projects in our upstream sector. I know that financing is a critical issue posed by energy transition and I know that if we sit down to think together, there will be results.
The PIA had not only made the commission a technical regulator but a commercial regulator. We will upgrade to being a business enabler and other different regulatory culture and this is the prescription of the law and the law has made the commission a technical and commercial regulator and so in that wise, we will be concerned equally as to how we will facilitate financing for stakeholders in the industry and we will not do that in isolation of the members”.
He added that if the initiatives will be spearheaded by the regulator in terms of attracting financing for IPPG members, it will empower the members to be able to leverage on the divestment day by day, by IOCs for them to enhance their capacity in the onshore and shallow water aspect of the investment in the upstream.
e can look at ways to optimise production in the upstream and thereby enhancing federation’s revenue”, the NUPRC boss added.
In his presentation, Chairman, IPPG, Abdulrazaq Isa, noted that the FG’s support for indigeneous E&P companies’ participation in the ongoing IOC divestment was critical as it will provide a solid avenue for securing the country’s energy future.
He also expressed concerns that IPPG members who had a proven track record and demonstrated operational and financial capacity to manage marginal field assets were not given consideration in the last marginal round and added that significant upfront costs for marginal field assets may impede the ability of investors to attain production in a timely manner.
Responding to the concerns raised by IPPG, Komolafe said the presentation will serve as a working document for policy formulation as the commission commences the implementation of the PIA and added that the government will make improvements in challenges included in the presentation.