By Esther Agbo
The 47th Nigeria Annual International Conference and Exhibition (NAICE), organised by the Society of Petroleum Engineers (SPE) Nigeria Council took place on August 5, 2024.
The event, themed, “Petroleum Industry Value Chain Optimisation: The Inevitability of Midstream and Downstream Development,” brought together key stakeholders in the oil and gas industry to discuss the path forward for Nigeria’s petroleum industry, particularly in optimising the value chain through robust midstream and downstream development.
The Permanent Secretary of the Ministry of Petroleum Resources, Ambassador Nicholas Agbo Ella, representing the Honourable Minister of State for Petroleum Resources (Oil), emphasised on the crucial need for midstream and downstream sector development in Nigeria’s petroleum industry.
Addressing the theme “Petroleum Industry Value Chain Optimisation: The Inevitability of Midstream and Downstream Development,” Ella highlighted the necessity of this progression for the industry’s future sustainability and efficiency.
In his remarks, delivered via a web video link, Ella underscored the indispensable role of the midstream and downstream sectors, not only in enhancing efficiency and sustainability but also in maintaining Nigeria’s competitive position in the global petroleum market.
“The optimisation of these sectors is not just an option but a necessity for enhancing efficiency, ensuring sustainability, and maintaining our competitive edge in the global market,” Ella stated, noting the industry’s long-standing contribution to national revenue, job creation, and industrial growth.
However, he also acknowledged the evolving energy landscape’s challenges and opportunities, stressing the need for a comprehensive and integrated approach.
He identified technological advancements, regulatory frameworks, and strategic partnerships as key enablers of this transformation.
“At this juncture, it is imperative that we leverage these advancements to enhance the profitability and environmental performance of our industry.
“By doing so, we can ensure that our petroleum resources are utilised most efficiently and sustainably,” he added.
The Nigerian government, through the Ministry of Petroleum Resources, is committed to fostering an enabling environment for investment and innovation in the midstream and downstream sectors.
Agbo Ella highlighted ongoing efforts to attract both local and international investments, foster technological innovation, and ensure regulatory compliance. Key focus areas include infrastructure development, such as expanding and modernising pipelines, storage facilities, and refining capacity, to meet domestic and international demands.
Similarly, the Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, in his goodwill message highlighted the crucial need for Nigeria to enhance its focus on the midstream and downstream sectors to achieve a sustainable and diversified energy future. He noted that the Nigerian oil and gas industry stands at a critical juncture, particularly with the evolving landscape of International Oil Companies (IOC) divestments.
These changes, he argued, present both challenges and opportunities for the industry, especially for indigenous players.
“Let me state the theme of this year’s conference, ‘Petroleum Industry Value Chain Optimization: The Inevitability of Midstream and Downstream Development.’ aligns with the objectives of the Petroleum Industry Act, 2021(PIA) for overall industry stability, growth, and sustainability. A core imperative of the PIA is to ensure that the midstream segment is developed as a standalone segment to transition the nation from oil-centric operations to an oil and gas-based industrial economy,” he stated.
Komolafe emphasised that the optimization of the entire petroleum value chain is essential for maximising the value derived from Nigeria’s hydrocarbon resources. He underscored the NUPRC’s commitment to ensuring the optimal development of petroleum resources, thereby creating sustainable value across the chain.
“A chain is as strong as its weakest link,” he remarked, stressing the importance of functional integration across all segments of the industry.
In addition, according to Ella, the Ministry prioritises adopting digital technologies and data analytics to improve operational efficiency and decision-making processes. There is also a strong commitment to promoting local content and capacity building, ensuring that Nigerian companies and professionals lead in these critical sectors.
He however lauded initiatives like the Young Professionals’ Workshop and the Women Leadership Programme, showcased at the conference, as vital components of the government’s strategy to foster inclusivity and leadership development. He stressed the importance of equipping young professionals and female leaders with the necessary knowledge, skills, and opportunities to thrive in the evolving petroleum landscape.
Addressing the prospects of indigenous operators, Komolafe highlighted their significant growth over the past two decades and expressed optimism about their role in driving robust development across the value chain. He encouraged these operators to pursue vertical integration and in-country value addition, contrasting this with the export-centric approach of some major operators.
Komolafe also outlined the NUPRC’s efforts to streamline regulatory frameworks in collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and other key stakeholders. These efforts include strengthening the administration of the Domestic Crude Supply Obligation (DCSO) and the Domestic Gas Delivery Obligation (DGDO), which are crucial for bolstering domestic energy security.
Furthermore, he addressed the broader context of the global energy transition, advocating for conscious efforts toward upstream decarbonization and the establishment of structures to support midstream operations. He said the NUPRC is actively implementing a Regulatory Framework for Upstream Decarbonisation and Carbon Monetisation in Nigeria, aiming to align with Environmental, Social, and Governance (ESG) principles.
In his closing remarks, Ella called for active engagement from all participants, encouraging them to share insights and explore collaboration opportunities. He expressed gratitude to the Society of Petroleum Engineers (Nigeria Council) for organising the event, emphasising the importance of such gatherings in shaping the industry’s future.
“Let us work together to unlock the full potential of our midstream and downstream sectors and drive the sustainable development of our petroleum industry.
“Together, we can achieve great milestones and ensure the continued growth and prosperity of Nigeria’s petroleum industry,” he concluded, setting a collaborative and optimistic tone for the conference’s discussions.
The 47th edition of NAICE aimed to serve as a premier platform for fostering dialogue on oil and gas matters and energy sustainability, reflecting the industry’s commitment to evolving and optimising the petroleum value chain for national economic development.