Senate summons NNPCL over 60% fund for frontier acreages

Senate summons NNPCL over 60% fund for frontier acreages

The Senate Gas Committee has revealed its intention to summon officials from the Nigerian National Petroleum Corporation Limited (NNPC) to provide an explanation for the delay in funding exploration and development of new frontier acreages.

Chairman of the Committee, Jarigbe Jarigbe, made this announcement during a press conference following a closed-door meeting with the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, and his team.

It is worth noting that the Petroleum Industry Act (PIA) of 2021 introduced the Frontier Exploration Fund, which is designed to support exploration and development activities in Nigeria’s frontier acreages. These acreages are located in regions such as Anambra, Benue, Dahomey, Bida, Sokoto, Chad, and other areas where hydrocarbon exploration has not yet taken place.

The PIA specifies the funding mechanism for these ventures. The fund is intended to be comprised of 30 percent of NNPC’s “profit oil and profit gas” from various contracts, which will be allocated for exploration and development purposes.

Jarigbe emphasized, “We were briefed by the CEO of NUPRC and his team regarding the agency’s activities. Section 9, subsection 4 and 5 of the PIA mandate the NUPRC to establish a Frontier Acreages exco account for the exploration and development of frontier acreages, with the fund subject to the approval of the National Assembly.”

Furthermore, he pointed out, “Section 22, subsection 1 of the Petroleum Industrial Act also specifies that the National Assembly oversees the budget and expenditure of the NUPRC.”

“We were informed that no funds have been allocated from the 30 percent oil profit and 30 percent gas profit, as stipulated in Section 9, subsection 4 of the PIA. We also plan to engage with the NNPC on this matter. We currently lack budget figures because none were provided. We will seek more information on this and report back,” Jarigbe stated.

Members of the committee earlier stressed the growing importance of gas as a primary alternative source of revenue for countries blessed with natural gas resources. They emphasized that Nigeria cannot afford to miss the opportunity to fully exploit this invaluable resource and must act swiftly to capitalize on it.