• Sunday, June 23, 2024
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New oil regulations offer hope for improved output, investments – experts

Energy experts have said that Nigeria can propel its oil production, attract investments, and generate more revenue by implementing the new seven regulations issued by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

These seven regulations make a total of 12 regulations now gazetted out of the 18 initially identified as priority regulations.

The seven new regulations are: the Nigeria Upstream Petroleum Measurement Regulations, 2023; the Production Curtailment and Domestic Crude Oil Supply Obligation Regulations, 2023; and the Frontier Basins and Exploration Fund Administration Regulations, 2023.

Others are the Nigeria Upstream Decommissioning and Abandonment Regulations, 2023; the Significant Crude Oil and Gas Discovery Regulations, 2023; the Gas Flaring, Venting, and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023; and the Nigeria Upstream Petroleum Unitization Regulations, 2023.

Joshua Olorunmaiye, team lead/executive associate, energy and natural resources at Bloomfield LP, said he expects a positive impact on boosting oil production, curbing theft, monetising gas flaring, and attracting investment, as these regulations substantially provide for matters that were not clear, from a regulatory point of view.

“With regards to oil production, the Nigeria Upstream Petroleum Unitization Regulations, 2023, establishes rules, principles, and procedures for the implementation of unitisation of oil and gas from a petroleum reservoir that extends beyond the boundaries of a license or lease area into an area to which another license or lease relates,” he said.

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“The Production Curtailment and Domestic Crude Oil Supply Obligation Regulation, 2023, also provides the generic rules for production curtailment and utilisation of the produced petroleum in relation to export and domestic crude oil supply obligations as provided in sections 8(c) and 109 of the PIA.”

Olorunmaiye added that regarding oil theft, the Nigeria Upstream Petroleum Measurement Regulations, 2023, would tackle inaccurate measurements of the volume of oil and gas produced in the country and improve

“Thus, this directly improves on the data and ascertainment of Nigeria’s gas production levels, which previously, encouraged oil theft, as there were no means for accurate measurement of petroleum as a basis for the calculation of petroleum revenue accruable to the government,” he said.

Speaking on the Frontier Basins Exploration Fund Administration Regulations, Kelvin Emmanuel, energy sector expert and co-founder/CEO at Dairy Hills, said it will ensure that in areas where the geological surveys have shown prospects for oil deposits, especially in inland basins, the Nigerian National Petroleum Company Limited can award prospecting license for companies to explore, as a tool for more states to participate in oil derivation, and consequently raise the daily output for the joint venture partners.

“This is because, for a state like Cross Rivers State that had a 2011 Supreme Court judgment awarding its midstream oil wells to Akwa Ibom, developing inland basins is absolutely critical to getting the state back on fiscal track,” Emmanuel said.

Olorunmaiye added that the Frontier Basins Exploration Fund Administration Regulations will encourage investment in the oil sector as it provides the general rules for the exercise of the commission’s responsibilities with respect to frontier basins.

The energy lawyer added that the Significant Crude Oil and Gas Discovery Regulations, 2023, would ensure optimum exploitation of petroleum covered by Petroleum Prospecting Licenses (PPLs) granted under the Act through the retention of areas of significant crude oil and gas discovery by a licensee for a specified time.

“These certainly create a more attractive environment for investment, as investors will want to be sure that operations will provide optimum returns on investment,” Olorunmaiye said.

Olorunmaiye added that regarding monetising gas flaring, the Gas Flaring, Venting, and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023, reinforces the right of the FG to take gas destined for flaring at no cost, and also provides for the sake of such gas to bidders for a fee that would hurt her to not have been gained.

On the other hand, Emmanuel said this regulation places stiffer punitive damages and penalties as it regards flaring and seeks to outline a timetable for the utilisation for economic purposes or venting if companies are unable to find infrastructure to channel gas from feeder lines into the manifold.