The Nigerian Senate has announced its intention to invite the Nigerian National Petroleum Company Limited (NNPC) to address concerns regarding the shortage of funds for the exploration and development of new frontier acreages. This decision was revealed by the Chairman of the Senate Committee on Gas, Jarigbe Jarigbe, during a press briefing held on Friday, following a closed-door session with Gbenga Komolafe, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission, and his team.
The development comes in the wake of the Petroleum Industry Act (PIA) of 2021, which introduced the Frontier Exploration Fund, aimed at supporting exploration and development in untapped or underdeveloped areas of Nigeria, including Anambra, Dahomey, Bida, Sokoto, Chad, and Benue.
The Frontier Exploration Fund is designed to constitute 30 percent of the “profit oil and profit gas” from various contracts entered into by NNPC Limited. These funds are intended to finance exploration and development activities in the designated frontier acreages.
Jarigbe highlighted that the Senate is committed to upholding the provisions outlined in Section 9 subsections 4 and 5 of the PIA, which stipulate that the Nigerian Upstream Petroleum Regulatory Commission should have a Frontier Acreages Escrow Account for the exploration and development of frontier acreages, and that the fund is subject to the approval of the National Assembly. Section 22(1) of the PIA further provides that the National Assembly has oversight of the budget and expenditure of the NUPRC.
During the session, lawmakers emphasized the critical importance of gas to the Nigerian economy, noting that it has become a vital resource capable of sustaining the country. They also recognized the global shift toward the use of gas as an energy source.
The CEO of the Nigerian Upstream Petroleum Regulatory Commission stressed that gas, like oil, was pivotal to revenue generation, pointing out that Nigeria’s 208 trillion cubic feet of gas reserves positioned it as having the largest reserve in Africa and the ninth-largest globally. Efforts are being made to enhance gas production and translate it into increased revenue, with a focus on accelerating gas production.
Additionally, the Commission is actively exploring undeveloped gas fields and plans to transparently auction those fields in line with the PIA’s provisions, ultimately harnessing the potential benefits of gas for the nation. The primary challenges hampering gas production include the lack of funds and necessary infrastructure.