The federal government has finalised its preparations for looking into additional financing options for Nigerian oil and gas development. Despite the funding difficulties that investors face when investing in Nigeria, this aims to achieve the sustainable development of the country’s petroleum resources.
This information was provided by Mr Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Downstream Regulatory Commission (NUPRC), at the official opening of the pavilion and exhibition stand of Nigerian oil and gas companies at the Oil Technology Conference (OTC), which began 3rd May 2023 in Houston, Texas, the United States of America.
Komolafe said that the necessity to develop the nation’s hydrocarbon resources necessitates enormous expenditure, which is why the commission decided to create an alternate finance model for the sector.
He promised that Nigeria would not be left out of the energy discourse because it is a site where possibilities and requirements collide. He also said that Africa, and thus Nigeria, is well-positioned because it has what it takes to close the energy gap in the face of the energy shift.
According to Komolafe, Nigeria is well-positioned to become a superpower if all of these hydrocarbon resources are established in a coordinated way. Nigeria has significant oil and gas deposits in addition to other energy sources.
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He also mentioned how the Petroleum Sector Act (PIA), which was signed into law, had brought about a historic change in the petroleum sector, including a favourable fiscal and regulatory framework.
“Globally, the conversation about the energy transition is gaining steam, and as a country, we need to keep track of that conversation,” he said. Good enough, Nigeria is keeping up with the discussion and is adjusting its policies to fit the energy debate.
“Preparation is moving along, and as you may remember, President Muhammadu Buhari promised that the country will achieve net zero emissions by 2060.
Nigeria has thus created its energy transition plan, and we, the regulatory commission, are adjusting our policies and rules to be consistent. The commission proposes a historic proposal to host an E&P International Financing Road Show for financiers, investment bankers, private equity, and multilateral institutional investors.
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The goal of the effort is to highlight the high-value fast-win possibilities that investors may take advantage of in the current deepwater mini-bid awards, the continuing National Gas Flare Commercialization Programme, and the recent PPL awards.
Similarly, Dr Leemon Ikpea, chairman of Lee Engineering and Construction Company Limited, whose business is preparing to construct a fabrication facility in Warri, Delta State, said that finance has been a major obstacle to the successful completion of many projects in the sector.
We are able to reach our current position thanks to a unique grace, he remarked. We have explored more logical approaches to get the required money.
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“Like other large businesses operating in a dollarized Nigerian economy, material costs climb abruptly over the course of a few days or weeks.
Going back to a customer to negotiate new terms on shifting rates is challenging. If the government offers tax breaks and import exemptions to attract investors, it won’t be too much.
