Daily Trust

Insecurity in communitie­s, others stall 1m barrels crude daily

- By Simon Echewofun Sunday

Challenges that include insecurity, energy theft in Nigeria’s oilproduci­ng communitie­s, along with low investment, have stalled the production of about one million barrels of crude oil daily.

The Commission Chief Executive (CCE) of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr Gbenga Komolafe, gave the indication on Wednesday at a host community sensitisat­ion workshop in Abuja.

He said, “Currently, Nigeria has the technical allowable capacity to produce about 2.5 million barrels of oil per day (bopd). However, arising from the highlighte­d challenges, our current production hovers around 1.5 million barrels of oil and condensate per day.

“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 myriad of challenges ranging from insecurity, low investment, de-prioritisa­tion of funding of hydrocarbo­n developmen­t arising from energy transition.”

He stated that to stem the tide of sabotage and third-party interferen­ces on oil and gas critical infrastruc­ture, the Petroleum Industry Act (PIA) 2021 stipulated the incorporat­ion of Host Communitie­s Developmen­t Trust (HCDT) for settlors (upstream oil and gas companies) operating in those communitie­s to contribute three per cent of their actual annual operating expenditur­e of the previous financial year to fund developmen­t projects.

Komolafe further said: “So far, the commission has approved 75 HCDTs, out of which 41 have been fully incorporat­ed by the Corporate Affairs Commission (CAC). We have also prequalifi­ed 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.”

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