The Federal Government is hopeful that United States President Donald Trump’s support for oil drilling will put an end to the funding challenges faced in the course of hydrocarbon production.
The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, stated this on Tuesday while addressing newsmen shortly after he won the ThisDay CEO of the Year Award in Lagos.
Komolafe explained that the oil sector has faced funding challenges for years as many foreign financial institutions are no longer willing to fund fossil fuels.
According to him, the momentum gathered by renewable energy made funding fossil fuels somewhat difficult thereby impacting new investments in the oil sector.
However, with Trump’s ’Drill, baby drill’ slogan, and his disposition to ramp up crude production in the US, Komolafe projected a positive outlook for Nigeria in 2025 and beyond.
“As a regulator, it is our opinion that the programme, that is the ’Drill, baby drill’ programme of President Trump, would have a positive effect on us as a nation with large hydrocarbon reserves.
“What that means is that the challenge of funding for the development of hydrocarbons will relapse. If you remember, one of the major challenges facing the optimisation of hydrocarbon reserves is funding. Because the momentum in renewables and the investment in renewables were already having a negative impact on the funding of hydrocarbon.
“But given the position of President Trump, it means that funding challenges in fossil fuel will be relapsed, and that will have a favourable impact on the development of hydrocarbon in Nigeria,” Komolafe said.
Reacting to Trump’s call that the Organisation of the Petroleum Exporting Countries should reduce the price of crude oil, Komolafe said the organisation does fix the price of crude oil.
The US President had opined that when the price of crude oil goes down, the war between Russia and Ukraine would come to an end.
“I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil. You got to bring it down, which frankly, I’m surprised they didn’t do before the election. I was a little surprised by that. If the price came down, the Russia, Ukraine war would end immediately,” Trump was quoted as having said.
Speaking to this, Komolafe replied, “I’m not sure he said OPEC should reduce the price of crude because OPEC does not fix the price of crude. Rather, what OPEC does is regulate production among member countries. It is the market fundamentals that dictate the price of crude, not OPEC.
“So, if the idea will be to control growth, that is global inventory. If there is a cut in the global inventory, that itself will regulate the price. But if there is an increase in production from the US based on the ‘Drill, baby drill’ plan, that will increase the global inventory. And if the inventory increases, then that will have an impact on the price. The price will come down.”
On its zero-routine emission plans, the chief executive maintained that the commission initiated the Nigeria Gas Commercialisation Programme which implementation it is monitoring to reduce gas flaring.
“It’s one of the programmes we are monitoring the implementation. In fact, we believe that given the diligent implementation of the programme, the nation will begin to feel the effect in terms of cutback in gas flaring in the Year 2025. We are very much committed as a commission to effective implementation of the gas commercialisation programme so that it will have a positive impact,” he stated.
