April 12, 2024
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OIL & GAS

Senate Summons NNPC Over Frontier Exploration Funds Shortfall

The Nigerian Senate has announced its intention to summon the management of the Nigerian National Petroleum Corporation Limited (NNPCL) following concerns about insufficient funds allocated for exploring and developing new frontier acreages.

Senator Jarigbe Jarigbe, Chairman of the Senate Committee on Gas, made this announcement on Friday after a closed-door session with Gbenga Komolafe, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and his team, according to Dailytrust.

Under the recently established Petroleum Industry Act (PIA), the Frontier Exploration Fund was created to support exploration and development activities in Nigeria’s frontier acreages, including regions like Anambra, Dahomey, Bida, Sokoto, Chad, and Benue, where hydrocarbon exploration has yet to occur or remains undeveloped. The PIA specifies that the Fund, comprising 30% of NNPCL’s profits from oil and 30% from gas contracts, is designated for financing these critical exploration efforts.

Senator Jarigbe stated, “Section 9 subsection 4 and 5 provides that the NUPRC should have a Frontier Acreages an exco account for the exploration and development of frontier acreages and that fund is subject to the approval of the National Assembly.” He further emphasized the Senate’s oversight role, stating, “Section 22 subsection 1 of the Petroleum Industrial Act also provides that the National Assembly oversees the budget and expenditure of the NUPRC.”

Expressing concerns over the absence of funds as stipulated in the PIA, Senator Jarigbe indicated the Senate’s intention to engage with the NNPCL to address this issue. He explained, “We discovered that there is no fund raised from 30 percent oil profit and 30 percent gas profit as provided for in Section 9 subsection 4 of the PIA. We also intend to engage with the NNPCL on that. We don’t know the budget because we weren’t given any figure. We will get details on that and get back.”

Earlier in the session, the CEO of NUPRC underscored the significance of gas in the country’s revenue generation, highlighting its critical role comparable to that of oil. The Senate’s move to summon NNPC Limited’s management underscores the government’s commitment to ensuring transparent and efficient utilization of funds allocated for vital energy exploration initiatives, aligning with the objectives outlined in the PIA.

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