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Nigeria mulls emergency declaration in troubled oil sector

Grey Matter: Reforming the Nigerian Oil and Gas Sector – The 2024 Executive Order and Directives

The Nigerian government is considering declaring a state of emergency in the oil sector following continuing sabotage of oil and gas assets in the Niger Delta.

“The imperative is on Nigeria to declare some sort of emergency in its oil and gas sector,” said Abel Nsa, head of the National Oil and Gas Excellence Centre (NOGEC), a department at the Nigerian Upstream Regulatory Commission (NUPRC), in an address at the Association of Nigerian Energy Correspondents (NAEC) conference held in Lagos on Thursday.

Rampant sabotage of oil and gas resources is taking a toll on the industry with investors unwilling to commit resources to new projects while increasing pollution in the region.

State-oil firm, NNPC Ltd said as much as 200,000 barrels of oil was stolen in 2021 with the operation now assuming industrial-scale theft.

The NUPRC boss acknowledged that the challenges of seamless production in the form of rampant crude theft and sabotage of critical infrastructure were still with us.

He said the commission has developed key initiatives aimed at reducing the menace to the barest minimum in a short while and eventual elimination in the long-run

Some of the measures will be implemented by the government while others will be implemented by the operators.

“Some of these include a roadmap for tapping the challenges in the industry and implementation of areas between government and operators,” he said.

The government will be tasked with providing security as the commission is liaising with the top security echelon of the Nigerian security network to ensure that government security forces provide pipeline and asset security.

Read also: Guyana’s new $10bn field project exposes Nigeria’s inability to pump more oil

The commission will promote the implementation of surveillance technologies on main trunk lines at each manifold for real-time loss detection that

Nsa also said the regulator will enforce the installation of tamper detection technologies as part of the design for pipelines and related oil and gas production facilities.

He also said the commission will ensure that operators implement approved security protocols in areas within their control and properly identify and remove illegal connections and conduct remedial works in record time.

Nsa said the commission was working to implement the provisions of the Petroleum Industry Act (PIA) and has developed six regulations to aid the proper implementation of the law.

In line with the provisions of the Act, several stakeholder engagements were held to get the buy-in and sensitise the industry players

The commission has issued six regulations which comprise the Nigerian Upstream Host Community Development Regulation, Nigeria Upstream Fees and Rents Regulations, Nigeria Royalty Regulations, and Conversion, and Renewal Regulations.

Others are Domestic Gas Delivery Obligations Regulations and Licensing Round Regulations.

He said the commission was also in the process of issuing additional seven regulations in phase two of the exercise in consultation with stakeholders in line with Section 216 of the PIA.

While the passage of the PIA has brought an end to marginal fields, operators have now been issued Petroleum Prospecting License (PPL) to local operators who are developing previously abandoned fields.

“A breakdown of the allocation of the fields to indigenous operators is as follows: two fields awarded in 1999, 24 in 2003/2004, one each in 2006 and 2007, and two in 2010. Ten years after, in 2020, 57 fields were put up for bidding,” he said.