The Federal Government made the announcement on Wednesday that Nigeria’s oil production is currently lower than its technical allowable capacity by approximately one million barrels per day.
It said that obstacles like a lack of investments, uncertainty, and decreased funding for hydrocarbons as a result of the energy transition were to blame for the low oil output.
The public authority uncovered this through the Nigerian Upstream Oil Administrative Commission at the host networks sensitisation studio with the subject, “The Execution of The Host People group Advancement Trust,” held in Abuja.
“While the commission is prioritising efforts towards increasing oil and gas production and ensuring maximum federation revenue through the optimisation of oil and gas value chain, the efforts have been constrained by a myriad of challenges.
“These challenges range from insecurity, low investment, and de-prioritisation of funding of hydrocarbon development arising from the energy transition. Currently, Nigeria has the technical allowable capacity to produce about 2.5 million barrels of oil per day. However, arising from the highlighted challenges, our current production hovers around 1.5 million barrels of oil and condensate per day,” the Chief Executive, NUPRC, Gbenga Komolafe, stated.
The workshop, according to Komolafe, who was represented by Kelechi Ofoegbu, Commissioner, Economy, Regulatory and Strategic Planning, NUPRC, would raise awareness of the host community provisions in the Petroleum Industry Act 2021 and provide a forum for knowledge sharing.
He stated that the provisions would be implemented in a manner that would benefit the Niger Delta and other oil and gas host communities.
“Our objective in this workshop is to create further awareness on this very important piece of legislation and provide updates on the commission’s activities geared towards the implementation of the regulations for Nigeria oil and gas industry.
“It is to provide a clear roadmap for the implementation of the Host Communities Development Trust to enhance peaceful and harmonious co-existence between oil and gas industry operators and host communities, and ultimately support the development of host communities,” the NUPRC boss stated.
He stated that to further stop the flood of sabotage and third-party interferences on oil and gas essential infrastructure, the PIA has in effect domesticated the protection of our oil and gas infrastructure to the host communities.
“One critical milestone under the PIA is the incorporation of Host Communities Development Trust by the settlor provided for in Section 235 as well appointment of Board of Trustees by the settlor in consultation with the host communities. The settlors are the oil and gas companies operating within host communities.
“Section 240 (2) of the PIA stipulates that each settlor, where applicable through the operator, shall make an annual contribution to the applicable host communities development trust fund of an amount equal to three per cent of its actual annual operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities for which the applicable host community’s development trust fund was established.
“In addition, Section 247 of the Act requires the Board of Trustees to set up a management committee which shall be responsible for the general administration of the Host Communities Development Trust Fund,” Komolafe explained
He said that the commission had so far authorized 75 Host Community Development Trusts, of which 41 had been completely established by the Corporate Affairs Commission, to the heads of host communities and other attendees at the workshop.
“We have also pre-qualified a total of 19 fund managers and commenced the process of establishing a baseline of ongoing community development projects, in preparation of ensuring the migration of such into the HCDTs.
“In addition, the commission has in partnership with an OEM (Original Equipment Manufacturer) developed an industry intelligent, digital automated platform for reporting and monitoring the Host Community Development Trust for transparent The settlors, Board of Trustees, management committees, advisory committees, fund managers, and other stakeholders would benefit from the portal’s ability to help them fulfill their responsibilities to host communities and to promote accountability and transparency in the management of the HCDT program, according to him.administration of the HostCom provisions of the PIA,” Komolafe stated.
“The portal will also enable quick feedbacks from the stakeholders and the public for the commission to carry out its regulatory oversight effectively,” the NUPRC executive stated.
