Tony Rlumelu
By Adebayo Obajemu
The chairman of Heirs Holdings and United Bank For Africa Group, Mr. Tony has poured encomium on the leadership of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), he also spoke on the centrality of the energy mix and Africapitalism.
Speaking at the third anniversary of the NUPRC, on the on the theme “Transformation, Innovation & Excellence” Elumelu, who is also the Chairman Transcorp,
talked about the challenges in the oil sector.
Elumelu who is the Chairman of Heirs Energies, an integrated and indigenous energy group which has played a major role in facilitating energy sufficiency in Nigeria, is more than qualified to speak on the topic given that he is also the Chairman of the United Bank for Africa, which has been providing substantial funding across the energy value chain, amounting to several billions of US Dollars, to both indegenious and international oil and gas operators and oil trading companies.
The business stands at the intersection of finance and energy, two pillars that are crucial to the nation’s prosperity.
He noted that “Transformation, Innovation & Excellence,” resonates greatly with the challenges and opportunities facing Nigeria’s energy space.
He stated that no one can contest the transformative and bold initiative of NPRC: the Project 1 million barrel of oil (MMBOPD).
He acknowledged the threat of declining production and investment, and according to him, the elephant in the room was the Nigeria’s oil production which has been on a downward trajectory, falling from peaks of over two million barrels per day to recent lows, below 1.5 million.
He said that the decline has in large measure translated to lost revenues, reduced global market share, and missed opportunities for national development.
“The root causes are multifaceted: aging infrastructure, security challenges in the Niger Delta, stalled investments, regulatory uncertainties, and a global shift towards renewable energy that has compounded the investment challenge.
“These factors, combined, threaten the very foundation of our economy, as we are heavily dependent on oil.
“As a nation, we cannot permit this to continue, and squander our inheritance and betray our next generation.
The Solution: Project 1MMBOPD and Beyond
“This is where project 1MMBOPD is so critical, a crucial part of the solution to unlocking the next phase of our development.
“By targeting to grow production by 1 million barrels of oil per day from current levels, we are setting a clear and challenging goal; one that I believe is achievable as I see all stakeholders are at the table and will commit to play their parts and bring the needed collaboration, innovation, and excellence to make this project a success, for the benefit of our country.
In his view, “to be sustainable, this initiative should go beyond just increasing production; it should catalyse a comprehensive strategy to revitalize our entire upstream sector.
He averred that the project should encompass key elements:
Infrastructure Modernization, which involves upgrading our aging facilities to improve efficiency and reduce downtime;
Security Enhancement, which is to implement advanced technologies and community engagement strategies to secure our assets;
Regulatory Streamlining, this has to do with NUPRC’s commitment to creating a more transparent and efficient regulatory environment.
He also mentioned investment Attraction. This involves leveraging this improved landscape to attract both domestic and foreign investment;
then, technology adoption, which has to do with embracing cutting-edge technologies to optimize production and reduce environmental impact.
By addressing these areas comprehensively,he noted, we will not only aim to reach the 1MMBOPD target but also to create a sustainable framework for future growth.
On the focus on gas, he said there is a need to embark on the ambitious project to boost oil production, which is to le focus on the critical role of gas in our energy mix.
The path to 1MMBOPD, he stated, must be constructed on strategies that maximize the value of our gas resources, reducing flaring and increasing utilization for domestic and export markets.
This dual focus according to him, will help diversify our energy portfolio and mitigate the risks associated with over-reliance on oil.
He emphasized the criticality of gas in improving access to electricity in Nigeria. “Access to electricity is the single most important factor in our quest for industrialisation. You can now see that our oil and gas sector is pivotal to the development of our country.
He noted that in its three short years, NUPRC has already laid the groundwork for this solution.
“Your efforts in promoting sustainable practices, such as the Nigerian Gas Flare Commercialisation Programme, exemplify the innovation required to balance environmental stewardship with economic growth.
“These initiatives not only reduce our carbon footprint, but also create valuable opportunities for our workforce and communities.
He appreciated the critical role independents have been playing, noting that Heirs Energies has actively been contributing to this solution.
“In the first 100 days after we took over operational control of our OML-17 asset in 2021, we doubled our production from 28,000 to over 50,000 barrels per day.
“We suffered a setback with unabated crude theft, which caused us to shut-in and work collaboratively with the NNPC Limited to better secure the pipeline system. From a low of 5% terminal receipts in December 2021, year-to-date in 2024, we have recorded an average terminal receipt of 85%; a remarkable improvement and a good example of what a purposeful collaboration between NNPCL and operators underpinned by rigorous execution can deliver.
“With the improvement in the operating environment, we have restarted our investment and production growth journey, and have now successfully reversed the fall in production that we suffered in 2022 and 2023, as a consequence of the evacuation challenges. A few days ago, OML-17 attained over 51,000 barrels per day, and we continue our production growth journey.
“Relatedly, we are also working to grow our gas production that feeds many power generation plants and gas-based industries.
“These achievements indicate what is possible, where there is a strong industry collaboration, and in particular, when regulatory support meets private sector drive and innovation.
He stressed the need for Africapitalism, adding that ” am not just an oil and gas investor – I am an investor across the Nigerian – and indeed African – economy.
“I have a very clear vision of where Africa should be and needs to be.
“A vision to address the promise of our enormous youth population and to ensure Africa reaps the rewards, finally and fittingly, of her resource wealth.
That younger generation is why I invest in entrepreneurs.
