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Bringing NUPRC closer to oil and gas operators will boost efficiency

Nigeria plans crude oil trading on Lagos exchange for first time to open access to funding for industry

With clear mandates – ensuring compliance with petroleum laws, regulations and guidelines, monitoring of operations at drilling sites, producing wells, production platforms and flowstations, crude oil export terminals, and all pipelines carrying crude oil, and natural gas, supervising operations being carried out under licences and leases, monitoring operations to ensure that they are in line with national goals and aspirations – the Nigerian Upstream Regulatory Commission, NUPRC, occupies a very influential position in Nigeria’s oil and gas industry.

The NUPRC also has the mandate to monitor operations to ensure that they are in line with national goals and aspirations, including those relating to Natural Gas Flare elimination & monetization, Domestic Gas Delivery Obligations and Domestic crude oil supply obligations and ensures that Health Safety & Environmental regulations conform to national and international best oil field practice.

Read also: NUPRC mulls relocating some departments to Lagos

The NUPRC maintains records on upstream petroleum operations, advises the government on technical matters, and ensures timely payments of rents, royalties, and revenues. However, politicians and analysts perceive NUPRC’s actions more as political than economic, closely monitoring its activities and complaining about developments that don’t fit their pre-conceived idealism. They prefer realism based on purely economic considerations, rather than focusing on politics.

The Nigerian Petroleum Regulator (NUPRC) is attempting to relocate personnel, particularly field officers, to Lagos, where many oil and gas companies have offices, due to the Petroleum Industry Act’s aim of restructuring and productivity. However, many personnel work from unsuitable locations, such as conference rooms and corridors.

NUPRC, led by Engr. Gbenga Komolafe, has consulted with key stakeholders, including labour unions, to reduce accommodation pressure in Abuja, maximise the use of the Lagos-based office, reduce operational costs, improve organisational efficiency, and enhance industry growth, in line with President Bola Tinubu’s commitment to cut costs and eliminate waste.

The decision to leave Abuja has been politicised and misinterpreted, causing a distraction to the Nigerian Petroleum Regulators Council (NUPRC) under Engr. Komolafe. The NUPRC has developed regulations to eliminate regulatory bottlenecks and ensure seamless upstream petroleum operations. These include Petroleum Licencing Round Regulations 2022, Petroleum Royalty Regulations 2022, Conversion and Renewal (Licences and Lease), Nigeria Upstream Petroleum Host Communities Development Regulations 2022, Domestic Gas Delivery Obligations Regulations 2022, Nigeria Upstream Petroleum Measurement Regulations 2023, Production Curtailment and Domestic Crude Supply Obligation Regulations, and Nigeria Upstream Decommissioning and Abandonment Regulations 2023.

Also, the 14 draft regulations awaiting gazetting include Upstream Petroleum Fees and Rent Regulations, Acreage Management Drilling and Production Regulations, Upstream Environmental Remediation Fund Regulations, Upstream Petroleum Safety Regulations, Upstream Petroleum Environmental Regulations, Upstream Petroleum Measurement Regulations, Advance Cargo Declaration Regulations, Draft Upstream Commercial Operations Regulations, Draft upstream Petroleum Code of Conduct & Compliance Regulations, Draft Upstream Petroleum Development Contract Administration Regulations, Draft Upstream Revocation of licences and Lease Regulations, Draft Upstream Petroleum Assignment of Interest Regulations, Draft Nigerian upstream Petroleum (Administrative Harmonisation) Regulations and Draft Amendment to the Nigerian Upstream Petroleum Host Communities Development Regulations 2022.

Read also: NUPRC awards 49 flaring sites for gas commercialisation

The Commission has engaged stakeholders on its draft regulatory framework for energy transition, decarbonisation, and carbon monetisation. The framework will govern the Energy Transition and Carbon Monetisation Division and the entire industry in considering energy transition in oil and gas field development.

Engr. Komolafe’s visit to the Philippines has attracted investors, with the country’s oil and condensate reserves at 37.046 billion barrels and 208.62 trillion cubic feet (TCF), respectively, up 0.37 percent and 1.01 percent, respectively, as per the reserves report as of January 1, 2022.

He has taken deliberate steps to drive the Decade of Gas programme declared by the Federal Government through more aggressive development of the nation’s huge gas resources, enhanced exploration activities, development of utilisation schemes leading to gas reserves growth, increased gas production, maturation of domestic and export gas markets, in addition to gas flare elimination and commercialisation through the Nigeria Gas Flare Commercialization Programme (NGFCP). Engr. Komolafe has also assisted many companies and projects to hasten development and achieve their first oil production. Some of the fields include: Anyala Field (First E&P), Ikike (Total), Efe Field (Newcross), Utapate Field (NEPL), and Akubo Field (SEEPCo).

He contributed immensely to the funding of the Federation’s activities. In the year 2021, the total revenue generated was N2.9 trillion, which signified a 44.82 percent increase in revenue generated as compared to the 2020 figure, which stood at N2.0 trillion. On the other hand, the total revenue generated in 2022 was N3.781 trillion, indicating an increase of 30.38 percent.

In 2024, plans are underway to hold the licensing round in line with Section 73 of the nation’s PIA. The Engr. Komolafe-led Commission will optimise the functionality of automation systems by enhancing the efficiency of existing optimising tools and the streamlined deployment of new ones while collaborating with relevant government entities to grow oil and gas production in the best interest of all stakeholders, including investors and Nigeria.

This and other plans are targeted at increasing oil and gas production and extending foreign exchange generation for the government and other stakeholders. As Engr. Komolafe disclosed at the just-concluded Petroleum Technology Association of Nigeria (PETAN) Sub-Saharan Africa International Petroleum Exhibition and Conference in Lagos, the operations of the agency will continue to be driven by modern technology, improved transparency in hydrocarbon measurement and accounting, and collaborative work programme administration with the exploration and production companies.

Read also: Nigeria has potential to produce 2.2m oil bpd – NUPRC boss

Indeed, the planned movement of field officers to Lagos should be endorsed and supported by everyone, as it promises to not only bring NUPRC much closer to the oil and gas companies and other stakeholders but also position the agency to operate more efficiently while minimising costs and maximising returns to the government and nation.

 

Ibrahim Musa is a Lagos-based energy analyst.