Platforms Africa presents the figures-don’t-lie implication of the target Tinubu gave to NNPC Limited for oil production increase at a time Komolafe declared crude reserves index stands at 64 years, even with the current 1.64 million barrels daily
Nigeria’s oil and gas industry was, in the last two weeks, laced by two critical issues that have kept tongues wagging. The first was the target president Bola Ahmed Tinubu gave to Bayo Ojulari, the new Group Chief Executive Officer of the Nigeria Nigeria National Petroleum Company Limited (NNPC Ltd) to upscale crude oil production share through the Joint Ventures (JVs) and Production Sharing Contract (PSC) assets with independent and international oil companies (IOCs).
The second of the issues is the declaration by the Commission Chief Executive Officer of the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), Engineer Gbenga Komolafe, who on Saturday gave the 2025 crude oil reserves index, sounded the alarm that Nigeria’s oil reserves are projected to dry up in a mere 64 years if the current rate of production and exploration persists.
Like Tinubu, Komolafe is not unfamiliar with the weight of his statement. He witnessed how panellists and stakeholders at the last year’s edition of the Nigeria Oil and Gas (NOG) Energy Week in Abuja clamoured for strict adherence to regulatory frameworks in the Petroleum Industry Act (PIA), including transparent declaration of annual oil and gas reserves figures, which could lead to an increase in exploration.
As he gave his words before the world at the 2024 NOG Energy Week panel session, themed; ‘Accelerating Investment, Enabling Industry Growth, Meeting Energy Demand,’ Komolafe at the weekend officially released the annual reserves data, maintaining that Nigeria has 37.28 billion barrels as the total oil and condensate reserves and 210.54 trillion cubic feet (TCF) as total gas reserves in its official National Petroleum Reserves Position for 2025.
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“The Reserves Life Index is 64 Years and 93 Years for Oil and Gas, respectively,” he declared, few days after Tinubu handed out an immediate action plan to Bayo Ojulari and his 11-man NNPC board to ramp up production, conduct a strategic portfolio review of NNPC-operated and Joint Venture Assets to ensure alignment with value maximisation objectives. Furthermore, the president expects the new board to elevate NNPC’s share of crude oil refining output to 200,000 barrels by 2027 and reach 500,000 by 2030.
Implications
Though their outlooks may differ, the expectation expressed by Tinubu for production increase at a time when crude oil reserves index stands at 64 years, with the current 1.64 million barrels daily, means that Nigeria Oil Reserve Face imminent depletion (dry up) if the sector does not receive or make a commensurate investments into exploration to increase the reserves.
The stark but indirect warning by Komolafe serves as a clarion call for stakeholders, including his NUPRC, to redouble their efforts in attracting investments into the oil and gas sector. The question is, what can Nigeria do to avert this impending crisis and ensure the sustainability of its oil and gas resources?
Wayout Through The Lens of Industry Experts
According to Wunmi Iledare, a renowned professor of petroleum economics, “Nigeria needs to create a more attractive investment climate to lure investors into the oil and gas sector.” He emphasized the importance of stability in policies and regulations, as well as the need for transparency and accountability in the sector. Iledare’s sentiments are echoed by many industry experts who believe that a favourable business environment is crucial for attracting investments.
Going back to Komolafe, Bayo Alamutu, a Port-Harcourt l-based petroleum engineer, said; “One key area that requires attention is the regulatory framework governing the oil and gas sector. The NUPRC has taken steps to streamline regulations and provide clarity on issues such as licensing and taxation. However, more needs to be done to ensure that the regulatory environment is stable, predictable, and attractive to investors. A stable regulatory framework would provide investors with the confidence they need to commit to long-term investments in the sector.”
Another critical factor, Alamutu continued, “is the issue of security. The Niger Delta region has been plagued by insecurity, including pipeline vandalism and kidnappings, which have discouraged investors and hindered the growth of the sector. The government must take concrete steps to address these security challenges and provide a safe operating environment for investors.
“Infrastructure is also a major concern. Nigeria’s oil and gas infrastructure is in dire need of upgrade and expansion. The government can attract investments in this area by providing incentives for companies that are willing to invest in infrastructure development. This would not only improve the efficiency of operations but also reduce costs and increase productivity.”
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Corroborating Alamutu’s view, an energy policy analyst, Adeola Yusuf, added, “the government needs to prioritize local content development. By promoting local participation in the oil and gas sector, Nigeria can create jobs, build capacity, and retain more value from its natural resources. This can be achieved through initiatives such as training programs, mentorship schemes, and partnerships between local companies and international oil majors.
“In addition, transparency and accountability are essential for attracting investments. The government must ensure that revenue from the oil and gas sector is managed transparently and that contracts are awarded based on merit rather than cronyism. This would help to build trust with investors and improve the reputation of the sector.
The role of technology, according to Yusuf, “can not be overstated. The adoption of cutting-edge technologies such as artificial intelligence, data analytics, and digitalization can improve efficiency, reduce costs, and increase productivity in the oil and gas sector. The government can encourage the adoption of these technologies by providing incentives for companies that invest in research and development.
“Moreover, Nigeria needs to diversify its economy and reduce its dependence on oil revenue. By investing in other sectors such as agriculture, manufacturing, and tourism, Nigeria can reduce its vulnerability to fluctuations in the global oil market and create a more sustainable economic future.”
Last line
In conclusion, attracting investments into Nigeria’s oil and gas sector, as agreed by all stakeholders at the last NOG Energy Week and other conferences, requires a multifaceted approach. The government must create a favourable business environment, prioritize security and infrastructure development, promote local content, ensure transparency and accountability, and encourage the adoption of technology. By taking these steps, Nigeria can attract the investments it needs to prevent its oil reserves from drying up and ensure the sustainability of its oil and gas resources for generations to come. The time to act is now.
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