By Daniel Edu
Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has emphasized the necessity for oil sector operators to devise innovative strategies to counteract the impacts of energy transition. Speaking at the Energy Year Nigeria 2023 Book Launch and Awards Ceremony in Lagos, Komolafe stressed the importance of developing measures to mitigate the challenges posed by the transition to cleaner energy sources.
He highlighted the potential to optimize the value chain of crude oil by enhancing domestic refining capabilities, thereby generating a positive domino effect on midstream derivatives. These derivatives encompass various industries such as petrochemicals, methanol, ammonia production, and liquefied petroleum gas (LPG), which can drive industrial growth and boost revenue for economic development.
Komolafe indicated that Africa’s industrialization potential is hampered by its energy gap and limited midstream derivatives and feedstock for industrial advancement. He underscored that a weak level of industrialization corresponds to a fragile economy.
Addressing the funding aspect, Komolafe noted the need for innovative funding approaches for fossil fuel development in the Nigerian upstream sector, as energy transition efforts may lead to decreased investment in fossil fuels. He suggested exploring alternative funding mechanisms like pre-export financing, project financing, oil-for-service agreements, and prioritizing gas development as a transitional fuel.
He also emphasized the importance of increasing production while reducing unit costs by utilizing improved drilling techniques and enhancing oil recovery methods. Additionally, he highlighted the significance of adopting advanced technologies to transform the upstream sector, boost production, and deliver mutual benefits to both the government and investors.
Komolafe’s remarks underscore the ongoing need for innovation and adaptation within the energy sector as countries navigate the transition towards more sustainable and cleaner energy sources.