NUPRC Recognise Pivotal Role in Broader Petroleum Industry Value Chain- Komolafe
It is my profound delight and honour to attend this event and indeed deliver this address to the esteemed gathering of eminent Industry practitioners and stakeholders in the Nigerian Oil & Gas Industry as well as our international counterparts.
The Society of Petroleum Engineers (SPE) Nigeria Annual International Conference and Exhibition (NAICE) 2024, for which we are all gathered here today has proven to be the leading light amongst industry events in fostering discourse on oil & gas matters and promoting engagements on contemporary energy issues.
It is for this reason that we join voices with the Honourable Ministers of State, Petroleum Resources (oil and gas ), and all well-meaning industry stakeholders to felicitate with the SPE Nigeria Council on yet another successful event of the 47th NAICE – an industry annual event ever since the inaugural session held in 1976! Congratulations!!
As the Technical and Commercial Regulator of Nigeria’s Upstream, we pride ourselves as more than a Regulator. In line with our mandates as enshrined in the Petroleum Industry Act, 2021 (PIA), we promote investments, influence best practices, and enable businesses. We, therefore, support the drive by the SPE and similar professional organisations to foster industry discourse on oil & gas and energy sustainability.
The Theme of this year’s conference, “Petroleum Industry Value Chain Optimization: The Inevitability of Midstream and Downstream Development.” aligns with the objectives of the Petroleum Industry Act, 2021(PIA) for overall industry stability, growth, and sustainability. A core imperative of the PIA is to ensure that the midstream segment is developed as a standalone segment to transition the nation from oil-centric operations to an oil and gas-based industrial economy.
Against the foregoing, the theme aptly captures the critical juncture at which our industry stands and the path we must tread to secure a sustainable and prosperous future.
As Upstream regulator, we at the NUPRC recognize our pivotal role in the broader petroleum industry value chain. The Upstream segment is the bedrock upon which the Midstream and Downstream sectors are built. It is therefore our commitment to ensure optimal development of petroleum resources for sustainable value creation across the chain. Optimizing the entire value chain is essential to maximizing the value derived from Nigeria’s hydrocarbon resources. Just like the saying goes: “A chain is as strong as its weakest link”. Each segment of the value chain must indeed function for overall value addition, energy security, and national economic development.
The outlook of the Nigerian oil and gas industry is evolving, particularly in the context of IOC divestments. These changes present both challenges and opportunities. Consequently, the Commission is implementing the Upstream Asset Divestment Framework to guide the seamless, non-disruptive exit of divesting entities and promote sustainable operations for the acquiring parties, all in overriding national interest. On the other hand, we welcome with keen anticipation the significant opportunities that divestment affords indigenous players who we have seen grow in leaps and bounds within the last two decades.
We see greater prospects for robust development across the value chain from Indigenous operators, some of which have demonstrated their keenness for vertical integration and in-country value addition compared to some export-centric major operators. The future for integrated upstream, midstream, and downstream development is therefore brighter for Nigeria. I beckon on all investing parties to seize this opportunity for greater value addition for shared prosperity.
On another note, we recognize the role of a streamlined regulatory framework in enabling the industry across the value chain. Hence, in the NUPRC, we are entrenching collaboration with our sister agency – the NMDPRA, and other key stakeholders to deepen end-to-end value in critical areas of operations.
For example, to ensure robust development of oil and gas midstream operations, we are strengthening alignments on the administration of the Domestic Crude Supply Obligation (DCSO) and the Domestic Gas Delivery Obligation (DGDO) to grow the sector consistent with the provisions of the PIA. We are confident that our efforts to foster regulatory alignment in this respect will stimulate further activities for domestic energy security in the short term. We will not rest on our oars! We are committed to entrenching collaboration for enhanced value to the industry and the nation!
Distinguished Ladies and Gentlemen, as we deliberate on the strategies and innovative approaches that will propel the industry forward, let us remember that the optimization of the midstream and downstream segments is not merely an option but inevitability. By focusing on these areas, we can mitigate the risks associated with market volatility, enhance our refining capacities, and ensure a more stable and efficient energy security for our nation, in a world undergoing change.
Let me take a moment to highlight the importance of conscious actions to mitigate the impact of energy transition and position the nation for a decarbonized world. No matter what our individual views may be, the world is on the energy transition course. Hence, deepening of in-country value from our oil and gas resources via mid- and downstream operations is highly imperative.
Thus, we must take concrete steps towards upstream decarbonisation, whilst creating the structures that allow midstream operations to strive and diversify our economic base. For us at the Commission, we have made deliberate and conscious efforts to position the Upstream appropriately through the implementation of the ongoing Regulatory Framework for Upstream Decarbonisation and Carbon Monetisation in Nigeria. The Commission is therefore championing decarbonization initiatives to sustain (and grow) investment in upstream oil and gas while entrenching Environmental, Social, and Governance (ESG) principles.
Similarly, we are rallying the continent’s oil and gas regulators towards a harmonized position to deepen value across the value chain from Africa’s abundant oil and gas resource, in a world undergoing transition. This collaboration will be achieved through the recently established Africa’s Petroleum Regulatory Forum (AfriPERF) which will foster collaboration, promote best practice dissemination, and enable the co-creation of approaches that support our national aspirations for energy security and economic development from petroleum resources.
Distinguished Delegates, Ladies and Gentlemen, let me conclude by saying that whereas the industry faces issues and emerging dynamics, TOGETHER, we can confront these challenges and mitigate their impacts for overall industry growth and sustainability. We stand together with you to work out measures and mechanisms to achieve the imperative of Petroleum Value Chain Optimization. Together, we can create a resilient and diversified energy sector that not only meets our domestic needs but also positions Nigeria as a formidable player in the global arena. Optimising value across the petroleum value chain, in a sustainable manner, is the key to achieving that noble objective.
This Goodwill Message was presented by Engr. Gbenga Komolafe,
Commission Chief Executive (CCE) NUPRC at the 47th Nigeria Annual International Conference and Exhibition (NAICE) 2024
