•Ojulari says NNPC now able to raise funding for all its businesses

•Huge gas reserves position Nigeria for energy security, says Ekpo

•OPEC: Energy demand set to grow by 23% between now and 2050

Emmanuel Addeh and Peter Uzoho in Abuja

The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, yesterday read the riot act to oil companies operating in the country to either align with the federal government’s plans for the sector or relinquish their licenses, arguing that the problems of the industry were no longer governance-related.

Speaking at the ongoing Nigeria Oil and Gas (NOG) Week in Abuja, themed: “Accelerating Energy Progress Through Investment, Global Partnerships and Innovation,” Lokpobiri stressed that despite all the incentives provided by the Bola Tinubu administration, the oil companies have failed to raise production, despite several promises.

The minister insisted that it was unacceptable that certain individuals and corporate organisations will acquire the required permits to produce oil and gas, then hold on to them for years without adding to Nigeria’s total output.

He maintained that in the ongoing drive to boost national oil production, the federal government remains resolute in ensuring that maximum value is derived from upstream assets currently held by operators.

According to him, this objective has taken on greater urgency as global financing for oil and gas projects continues to tighten, making it increasingly difficult for all operators to secure the capital needed to develop these assets.

He said: “It is no longer acceptable for critical national resources to remain in the hands of companies that lack the technical or financial capacity to optimise them or worse, those who use such licenses merely as a lever to access scarce capital, only to divert it to unrelated ventures.

“Our oil and gas industry has witnessed far too many cautionary tales of this nature, and we must now draw a clear line. Let’s be clear: Joint Ventures and Financial/Technical Services Agreements (FTSAs) are not weapons to hold the sector hostage. They are frameworks built on trust that you will act in the nation’s best interest. If you cannot, it’s time to step aside or step up through partnership.

“In this regard, the federal government is prepared to re-evaluate existing partnerships in the oil and gas sector in order to ensure that they align with our strategic national objectives for resource development and economic value creation.”

According to him, the recent mandate by President Bola Tinubu to the new board of the Nigerian National Petroleum Company Limited (NNPC) to review all existing operatorship arrangements is not just an administrative exercise, but a clear signal for operators to sit up.

Besides, Lokpobiri insisted that operators must wake up to the responsibility they hold, pointing out that the era of dormant fields and underperforming assets must give way to action, unlock dormant and untapped assets and ensure re-entry of shut-in wells.

“It is worth noting, as a matter of strategic concern, that one company’s production volumes before the enactment of the Petroleum Industry Act (PIA) were higher than what we are all currently delivering today even with the full benefit of the incentives and business-friendly policies embedded not just  in the PIA but, even with the presidential directives.

“So, this cannot be a governance problem. I want to put it to you, the operators, what happened? How did we get here? And more importantly, what are we going to do differently? We must confront a reality that cannot be ignored. Last year, we stood here and spoke passionately about increasing production. Yet today, we find ourselves asking: what has truly changed? What tangible difference has been made?” the minister asked..

He emphasised that the federal government has implemented far-reaching reforms, executive orders, fiscal incentives, streamlined regulatory processes to make the work of operators easier and investment more attractive, without commensurate output growth.

“We cannot continue this way. If we are serious about ramping up production and reclaiming Nigeria’s rightful place among leading oil producers, then every operator must show cause – by performance, not promises.

“We are not just chasing barrels. We are building an economy. One that reflects the aspirations of Nigerians, the commitment of this administration, and the immense potential of our resources.

“The government has done a lot, and is willing to do more, but the results must now speak for themselves. The responsibility is collective, but the obligation to deliver rests first with those holding the assets,” he stressed.

On the African Energy Bank (AEB), he noted that Nigeria was firmly on course and steadily approaching the official launch, explaining that with any institution of this magnitude, it is critical that Nigeria takes the time to cross the T’s and dot the I’s.

Also speaking, the Group Chief Executive Officer of the NNPC, Mr. Bayo Ojulari, who presented NNPC updates on Pipeline Security and JV Cash Call Status at the official opening of the NOG, said the national oil company now has the capacity to raise funds for its businesses.

He said NNPC’s ability to become cash call compliant was one of the benefits of the Petroleum Industry Act (PIA) which laid the foundation for the transformation of the company.

Ojulari stated: “The narrative has always been NNPC not having the ability to pay its cash call. That has been the narrative for several years. Ladies and gentlemen, this is one of the benefits of the PIA and its implementation thus far. The PIA has enabled NNPC to begin the journey of transforming from a corporation to a limited liability company.

“That journey, again, I would say, is about halfway through the process.  But as we clean up the company, it will begin to seek its own financing and begin to collaborate with institutions and with yourselves (industry partners). And that’s the end result. So today, NNPC is able to raise its finance for all its businesses”.

From the point of responsibility, he said it was very important that NNPC and its partners collaborate.

He pledged NNPC’s support to its partners struggling with raising finance, saying “we want to collaborate with them to unlock that fund because it is by unlocking that that we are able to translate it to investment.”

Ojulari, however, lamented that underinvestment continues to hobble Nigeria’s oil and gas production despite the industry now boasting of 100 per cent availability of transport pipelines.

He said two fundamental issues including security of pipelines and investment have over the last one or two decades impeded the progress of the industry, particularly in growing production up to the country’s capacity.

He added: “As at the 29th of June, we have 100 percent availability on all our pipelines. So, whatever we say, whatever we do, Nigeria’s oil industry has been characterised for several years for the issues around security. As of today, different solutions have been put together to be able to surmount that.

“But what does it tell you? You’ve had this availability situation between May and part of June, but you know what our production levels are. As of last month, we were doing about 1.35 million barrels of oil, and together with condensate, you get about 1.6 million barrels. So now that the pipelines are available, where is the production?”

He said that brought to the fore the issue of investment in the industry, noting that Nigeria oil and gas industry has been under-invested for several years for different reasons.

He also announced the industry attracted $17 billion in new investments in 2024. He said the target is to increase investment across the energy value chain to a minimum of $30 billion by 2027 and $60 billion by 2023.

Also, the Minister of State  Petroleum Resources (Gas), Ekperikpe Ekpo reaffirmed the country’s commitment to utilising gas as its transition fuel of choice, citing its cleaner nature compared to liquid fuels, abundance in Nigeria, and versatility in power generation, industrial use, and transportation.

“Nigeria boasts one of the largest proven gas reserves in the world with over 200 trillion cubic feet of proven natural gas reserves, yet we recognise that value is only created when resources are developed and utilised,” he said, adding: “I am deeply aware of the pivotal role natural gas must play in Nigeria’s journey toward economic transformation, industrialisation, and net-zero ambition.”

The ‘Decade of Gas Initiative’, according to him, is a national development strategy, not just a slogan, backed by policy reforms, infrastructure expansion, and strategic collaborations.

According to Ekpo, the activation of the Midstream and Downstream Gas Infrastructure Fund (MDGIF) now provides a dedicated vehicle for capital mobilisation, just as investment incentives are being aligned with project execution, including modular gas plants, pipeline expansion, and virtual gas networks.

He also said Nigeria’s regional gas pipeline projects are progressing well with the West African Gas Pipeline delivering gas to neighboring countries, promoting regional energy cooperation.

In his intervention, the Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Haitham Al Ghais, who spoke virtually, said accelerating global energy progress is arguably now more important than ever, especially in the developing world.

“OPEC’s World Oil Outlook sees global primary energy demand growing by 23 per cent between now and 2050. This will be driven by many factors, but in the interest of brevity, I will consider demographics, urbanisation and economic growth.   

“The global population is expected to rise from around 8.2 billion people in 2024 to almost 9.7 by 2050. This growth will be concentrated almost entirely in the non-OECD region.

“Moreover, almost 1.9 billion people are expected to move to cities by 2050. This is equivalent to adding around 111 cities the size of Lagos or 452 cities the size of Abuja to the global urban landscape,” he stated.

​