The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, says the country’s total annual upstream capital expenditure has decreased from 27 billion dollars in 2014 to less than six billion dollars in 2022.
The Chief Executive of NUPRC, Gbenga Komolafe, revealed this l on the sideline of the World Petroleum Congress, WPC, held on Sunday in Calgary, Canada.
Mr Komolafe, represented by the Executive Commissioner, Mr Kelechi Ofoegbu, the figure represented a 74 per cent decrease in its capital expenditure, CAPEX.
He attributed the decline in CAPEX to several factors, while emphasising that regulatory uncertainty, significantly impacted investment in Nigeria’s oil and gas industry.
Mr Komolafe further said that prevalent in the years preceding the enactment of the Petroleum Industry Act, PIA, also affected investment in the industry.
The event was jointly organised by Cabtree Consulting, the Gas Aggregation Company of Nigeria, GACN, and CarbonAi x-rayed.
The topic was “Nigeria and Canada: Collaborating to Decarbonise Nigeria’s Oil and Gas Sector”.
He said other factors are de-funding of fossil fuel development occasioned by energy transition and the global call for decarbonisation.
According to him, most International Oil Companies, IOCs, deprioritised Nigeria in their portfolios which led to the redirection of CAPEX to other countries.
This, he noted, was with attendant dwindling investment in Nigeria’s upstream sector.
‘‘This under-investment impacted negatively on the country’s rig count. On average, Nigeria had seventeen (17) active oil rigs in 2019 representing one of the highest counts in the African continent as at then.
“The average rig count declined to eleven in 2020, seven in 2021, 10 in 2022, but recently grew to as high as 31 by August 2023, a positive signal of new investments trickling into the country.
“The relatively high crude oil prices may have also attributed to the increase in activities in the petroleum upstream sector.
“We also see this as a reflection of investors’ acceptance of the PIA and its effective implementation by the regulator.
“The projected outlook over the next few years looks promising, and as the regulator in the oil and gas upstream sector.
“We would leverage on this opportunity by doing all that is necessary to attract more investments and revamp the Nigerian upstream sector ’’ he said.
The NUPRC boss added that the PIA has repositioned the Nigerian petroleum sector by creating efficient and effective governing institutions, with clear and separate roles for the industry.