Gbenga Komolafe: Reforming NUPRC, One Step at a Time
Hamid Ayodeji highlights some of the achievements of the Chief Executive Officer of the Upstream Petroleum Regulatory Commission, Mr. Gbenga Komolafe since he assumed the position
Since 2021 when he was appointed Chief Executive Officer of the Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe, has been taking gradual, but steady steps towards reforming the commission in line with his promise when he assumed office.
The 58-year-old engineer from Ondo state, has shown that he is a round peg in a round hole as he continues to take critical decisions to ensure that NUPRC’s mandates are achieved.
A Fellow of Nigerian Society of Engineers, Council of Registered Engineers of Nigeria and member of the Nigerian Bar Association (NBA), Komolafe’s expertise as a seasoned engineer and lawyer have no doubt been instrumental in giving the regulatory body the needed impetus to achieve its mandate.
He was Group General Manager, Special Duties at the NNPC, Group General Manager, Crude Oil Marketing Division and Executive Director (Commercial) Pipelines and Petroleum Marketing Company (PPMC). In addition, he was General Manager, Operations, Petroleum Equalisation Fund (PEF), General Manager, Operations of the Petroleum Products Pricing Regulatory Agency (PPPRA), among several others. Aside being an engineer, Komolafe has degrees in law, industrial and labour relations and is a recipient of various awards.
He is an expert in institutional process study and designs to curb revenue leakages and attainment of optimum national productivity.
As Group General Manager, Crude Oil Marketing Division, he facilitated optimum revenue for the Nigerian federation and performed transparently as acknowledged by the Nigeria Extractive Industries Transparency Initiative (NEITI) in its report within the period he served in office. In the same vein, as Executive Director, (Commercial) between 2012 – Mar 2014, he initiated strategic sales and retail plans and coordinated implementation of achievement of set revenue targets from downstream supply and distribution of refined petroleum products for nationwide consumption.
At the PEF, he initiated operations policies for effective petroleum products supply and bridging to the inner parts of the country and price equalisation management nationwide and pioneered successful implementation of electronic tracking of petroleum products distribution nationwide.
This, it was learnt, resulted in transparent bridging of petroleum products and price equalisation management that saved government hundreds of billions of naira through institutional process expertise.
He also successfully coordinated seamless supply of petroleum products nationwide with multiplier sectorial effect in the Nigerian economy as General Manager, Operations in the PPPRA.
Komolafe was Assistant General Manager (Head, Kaduna Zone), Assistant General Manager, Planning Research & Development and Branch Manager, Nigeria Social Insurance Trust Fund (NSITF), Warri.
Komolafe is said to have been heavily involved in strategic policy formulation and implementation in the oil and gas industry, where he clearly distinguished himself.
All these he brought to bear when he was appointed at CEO of the NUPRC, which ensured that he hit the ground running. That is why after a long wait, the federal government through the NUPRC at the weekend announced its readiness to issue Petroleum Prospecting Licences (PPL) to successful awardees of marginal fields in the 2020 bid round. According to the commission, the move was in fulfilment of the promise made early this year, pursuant to the provisions of the Petroleum Industry Act (PIA), 2021. The event would hold in Abuja tomorrow.
In a statement, he explained that the event would also witness the unveiling of the implementation template for the Host Communities Development Trust Fund for the
commencement of the provisions under Section 235 of the PIA, 2021.
According to him, this would positively impact restiveness in the host communities and the process guarantees seamless operations and boost investors’ confidence.
Furthermore, the NUPRC chief executive stressed that it will provide enabling environment for sustainable development of the country’s hydrocarbon resources.
“These will mark the conclusion of some of the most urgent and critical tasks inherited by the commission when it was inaugurated in October 2021, after the signing into law of the PIA 2021,” he stated.
He recalled that the commission had in March this year informed all participants in the 2020 marginal field bid round programme that it had put all necessary machinery in place to progress the bid round exercise to a conclusion in line with the PIA 2021.
“In furtherance of that resolution, the commission constituted an in-house work team to distil and address the concerns of awardees with a view to close-out issues affecting multiple awardees per asset and formation of Special Purpose Vehicles (SPV) by awardees in line with the respective letters of the award.
“Awardees were therefore enjoined to avail themselves of the resolution mechanism provided by the commission in the overriding national interest,” he noted.
The NUPRC explained that the successful coordination and resolution of the issues culminated in the emergence of the successful awardees that would be handed over licences this week.
One of the pressing tasks before the NUPRC, created by the Petroleum Industry Act (PIA 2021) in place of the defunct Department of Petroleum Resources (DPR), has been the closing out on the 2020 marginal oilfield award process. This placed the regulator in a somewhat precarious position as it has to contend with several interests involved in the award of the assets including the interests of the government, the awardees, the Nigerian public as well as other competing vested interests.
In the past, there have been cases where the regulator was either alleged to have given approvals without recourse to extant rules and laws guiding the sector to the dissatisfaction of some parties and eventually landing in law courts. There were also instances where the regulator was blackmailed and pressured to give approvals when it refused to act in violation of the law.
With the foregoing in mind, however, NUPRC, which is yet to clock one year of operation, has insisted on ensuring strict adherence to the rules guiding approvals and issuance of licenses in the upstream sector.
The commission believes that optimising the value of the Nigerian oil resources can only be achieved when it does its work diligently and in line with the rule of law that guarantees increased competition, opportunities and value creation.
Komolafe, had in a recent session, warned that no marginal field operator would be allowed to “trade” in papers issued by the organisation.
It is no longer news that several fraudulent elements parading themselves as oil and gas investors had in the past deceived or blackmailed the regulator to issue them approval papers which they later used to access funds without carrying out the project they presented.
In March, oil workers under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) called on President Muhammadu Buhari, who is the country’s Minister of Petroleum to take steps to check the presence and activities of portfolio and briefcase investors in the oil and gas sector whose sole aim it claimed was to milk the country without adding value.
However, displaying good knowledge of such malfeasance in the sector, Komolafe stood his ground in ensuring that due process was followed in every of the commission’s dealings, especially as it concerns the award of the 57 marginal field.
This development followed the NUPRC’s inauguration of a project committee on the reactivation of inactive oil wells in Nigeria to spur production. The country’s oil production capacity had dropped to 1.02 million barrels per day amid operational difficulties and the shutting of many oil wells due to lack of investments.
Inaugurating the committee in Abuja, the NUPRC boss, said the Commission would conduct an industry-wide technical integrated study on reactivation of the shut-in strings.
Komolafe said the country had suffered significant losses in crude oil production, especially in land and swamp terrains due to crude oil theft.
He said the major consequence of the heinous activity was the declaration of force majeure at Bonny Oil and Gas Terminal (BOGT).
He added the shut-in of wells from fields evacuating through the Nembe Creek Trunk Line (NCTL) and the Trans Niger Pipeline (TNP) was another consequence.
In the light of these issues and government’s production target of three million barrels of oil per day in three years, Komolafe said the NUPRC developed regulatory initiatives and optimisation to tackle the menace.
He said the strategies involved industry stakeholders and cut across techno-socioeconomic and security initiatives.
Another programme which the commission is also saddled with is the National Gas Flare Commercialisation Programme (NGFCP).
In February 2020, the federal government, had identified 45 out of 178 gas flaring sites to be awarded to successful bidders among the 200 bidders at the time, in the first phase of the programme.
Although not much has been heard about the update of the programme, Komolafe assured that the process would be wrapped up this year, just as he said he would ensure fairness, transparency and competitiveness in awarding the flare sites to bidders.
As part of efforts to increase stakeholders’ understanding and adherence to the Act, the commission is currently in the process of developing regulations for the activation of the PIA in order to give the law effect by regulations.
He, however, explained that the PIA provided robustly for abandonment, host community and award of acreages, arguing that it could not be given effect until the entire process was consummated.
Komolafe said he had all that was needed to tackle the challenges, adding, “I came with a revolutionary mind-set. I am a unique person in the industry, going by my background. I intend to do things differently in terms of adhering to processes.”
Also, in response to the funding challenge in the oil and gas industry, exacerbated by energy transition, NURPC is currently collaborating with indigenous operators on the platform of Independent Petroleum Producers Group (IPPG) to look at alternative ways of getting funds to accelerate hydrocarbon exploration and production in the country.
In one of his engagement’s with members of IPPG in Lagos, Komolafe, who said he understood the challenges faced by the indigenous operators, noted that the industry generally, was facing a critical challenge including access to finance.
With Komolafe at the helms of affairs, there is no doubt that he would continue to discharge the mandate of the NUPRC in the interest of Nigeria and to support the federal government in ensuring that the continues to derive value from the oil sector.