Low investment major challenge in upstream oil & gas – Komolafe, CEO NUPRC

By Haruna Salami

The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, has disclosed that one of the major challenges facing the upstream oil and gas sector is low investment.

Komolafe stated this Monday at an emergency investigative session on the state of the economy with the Senate Committee on Finance.

He said: “The major issue we have in the upstream, oil and gas in Nigeria, aside from the domestic challenges such as infrastructural gap and the menace of crude oil theft; the major challenge we have confronting the sector is the low level of investment.

“We understand that Nigeria as a crude producing nation is endowed with 37.5 billion barrels of crude oil. It is part of the statutory obligation of NUPRC to make declaration in terms of our reserve. So, as at April this year, the commission declared, verified, validated 37.5 billion barrels of crude and 209 trillion cubic feet of gas as our reserve”.

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He said as at today, the nation’s daily oil production stands at about 1.58 million barrels per day.

From the numbers he just read out, he said “we recognise that we suffer production to reserve ratio; we suffer worse carpet to reserve ratio, which is the most serious issue we are facing.

“Nigeria, as we speak, is plagued with one of the lowest in terms of carpet to reserve ratio among other nations. That illustrates the fact that the major issue we are facing is in terms of the low level of carpets in the industry.

The chairman of the Senate Committee on Finance, Senator Sani Musa (Niger East) said the reason for the emergency meeting has to do with the economy generally.

He said as a committee responsible to see how the country’s revenue is generated and how the fiscal policies of the country work, it is important that very important agencies like NUPRC should appear before the committee so that certain grey areas that we have, we can discuss, ask questions and see and see how we can go together.

The Managing Director of Ministry of Finance Incorporated (MOFI), Dr. Armstrong Takang, one of the stakeholders at the meeting assured the committee that the nation’s assets were being repositioned to play positive roles in the economy.