The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), yesterday, signed seven key regulations in furtherance of the implementation of the Petroleum Industry Act (PIA) 2021.
That was as the Nigerian National Petroleum Company Limited
(NNPC), yesterday, executed five new deals covering the renewal of Oil Mining
Lease (OML) 130 Production Sharing Contract, conversion of the acreage to a
Petroleum Mining Lease (PML), and three other deals.
Speaking at an event in Abuja, Chief Executive of NUPRC, Mr.
Gbenga Komolafe, noted that the signing into operation of the seven key
regulations in furtherance of the implementation of the PIA was in line with
the provisions of the new law and in fulfilment of the mandate of the
commission.
One of the new regulations, which had just been
operationalised, included the Nigeria Upstream Petroleum Measurement
Regulations, 2023, which Komolafe noted would close the metering gap in
upstream petroleum operations and encourage accelerated meter roll out in
upstream petroleum operations.
Besides, Komolafe stated that the metering regulation would
encourage the development of independent and competitive meters used in the
upstream, attract private investment in the provision of metering services, as
well as provide for the regulation of the measurement of petroleum produced.
Komolafe pointed out that the regulation would ensure
accurate measurement of petroleum as a basis for the calculation of petroleum
revenue accruable to the government and define requirements for the design,
fabrication, manufacturing, testing, calibration, operation and maintenance of
upstream metering equipment. For the second regulation, the Production
Curtailment and Domestic Crude Oil Supply Obligation Regulation, 2023, the
NUPRC chief executive stated that it would provide the general rules for
production curtailment and utilisation of the produced petroleum in relation to
export and domestic crude oil supply obligation.
The Frontier Basins Exploration Fund Administration
Regulations, 2023, Komolafe explained, would provide the general rules for the
exercise of the commission’s responsibilities with respect to frontier basins
to encourage and attract investment to the basins in Nigeria. For the Nigeria
Upstream Decommissioning and Abandonment Regulations 2023, the NUPRC boss
asserted that it seeks to ensure that decommissioning and abandonment
activities are conducted in accordance with good international petroleum
industry practice.
The regulations, he noted, also set the framework for the
establishment and administration of a decommissioning and abandonment fund.
According to Komolafe, 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, by the
retention of areas of significant crude oil and gas discovery by a licensee for
a specified time.
In explaining the Gas Flaring, Venting and Methane Emission
(Prevention of Waste and Pollution) Regulations, 2023, Komolafe stated that it
would reduce environmental and social impact associated with gas flaring and
venting of natural gas and fugitive methane emissions into the atmosphere.
Besides, he explained that it would help preserve and
protect the environment, prevent waste of natural resources and enhance energy
transition in Nigeria.
Komolafe added that the newly unveiled regulation would
create social and economic benefits from gas flaring and venting as well as set
out the procedure for the commission to exercise its rights to take gas at
flare point.
In addition, he said that the Nigeria Upstream Petroleum
Unitisation 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 licence or lease area into an area to
which another licence or lease relates.
Komolafe stated, “These seven regulations being signed today
represent a significant milestone achievement for the commission in its
continued stride towards the attainment of the goals of the PIA and the
reformation of the upstream petroleum sector. “All the regulations are
revolutionary in nature aimed at providing a regulatory environment that
assures efficiency, predictability, clarity, and effectiveness to the industry
in the discharge of the commission’s mandate.”
He recalled that five regulations that were successfully
gazetted between June and October 2022 were the Petroleum Licensing Round Regulations
2022; Petroleum Royalty Regulations 2022; Domestic Gas Delivery Obligations
Regulations 2022; Conversion and Renewal (Licences and Lease); and Nigeria
Upstream Petroleum Host Communities Development Regulations 2022.
Komolafe reaffirmed that the seven regulations that were
signed were part of the 13 draft
regulations that were presented for discussion during the first, second, and
third phases of the commission’s consultations with stakeholders between 2022
and 2023.
Other regulations are Upstream Petroleum Fees and Rents
Regulations; Upstream Decommissioning and Abandonment Regulations; Unitization
Regulations; Acreage Management (Drilling and Production) Regulations; Frontier
Exploration Fund Administration Regulations; and Upstream Environmental Remediation
Fund Regulations.
They also include the Upstream Petroleum Safety Regulations;
Upstream Petroleum Environmental Regulations; Upstream Petroleum Measurement
Regulations; Advance Cargo Declaration Regulations; Significant Discovery
Regulations; Domestic Crude Oil Supply Obligation Regulations; and Gas Flaring
and Venting (Prevention of Waste and Pollution) Regulations.
Furthermore, Komolafe stated that the inputs of the
stakeholders from the various engagements were considered in the drafting of
the regulations. He noted that they were subsequently forwarded to the Attorney
General of the Federation and Minister of Justice for vetting, legislative standardization
and approval. In his remarks, Executive Secretary of the Nigeria Extractive
Industries Transparency Initiative (NEITI), Dr. Ogbonnaya Orji, expressed the
readiness of the initiative to collaborate to push the boundaries of
transparency and accountability in the oil and gas industry.
He lauded the NUPRC for finding the courage and selflessness
to enact some of the regulations, which would further strengthen the regulatory
institution. Orji reiterated that Nigeria lost over 600 million barrels of oil
to theft and other sharp practices in the sector over a period of 12 years,
amounting to about $46.16 billion or N16.25 trillion.
NNPC Eyes $2.1bn Gas Revenue, Executes 5 Suite of Agreements
on OML 130 with Total, CNOOC, Others
Meanwhile, NNPC Limited executed five new deals covering the
renewal of the OML 130 Production Sharing Contract, conversion of the acreage
to a PML and three other deals. The new deals were based on the provisions of
the Petroleum Industry Act (PIA) 2021, and with the utmost aim of unlocking gas
revenues of up to $ 2.1 billion for Nigeria in both short and long terms.
The execution of the deal for renewal, conversion to PML and
three other agreements by all the parties took place in Abuja, and was
witnessed by Permanent Secretary, Ministry of Petroleum Resources, Mr. Gabriel
Aduda.
We learnt that the deal was part of the gas commercialization
programme being considered by NNPC, which seeks to end the perennial dispute
over OML) 130, thereby upscaling the country’s crude oil output to about three
million barrels per day and unlock gas revenues to the tune of about $2.1
billion in both short and long terms for the country.
NNPC executed the deals with its partners, including Total
Exploration and Production Nigeria (TEPNG), China National Offshore Oil
Corporation (CNOOC), South Atlantic Petroleum Nigeria Limited (SAPETRO), and
Prime 130 Limited, and the Nigerian Upstream Petroleum Regulatory Commission
(NUPRC).
A statement issued by NNPC after the signing of the deals
said the suite included PSC Contract between NNPC Limited and its contractors,
China National Offshore Oil Corporation (CNOOC) & South Atlantic Petroleum
(SAPETRO) with Total Upstream Nigeria (TUPNI) as the operator; Heads of
Agreement (HoA) Amendment between NNPC Limited, TUPNI, SAPETRO, PRIME 130,
& CNOOC; a Settlement Repayment Agreement (SRA) Addendum between NNPC and
its Contractors (CNOOC & SAPETRO).
Others were Concession Contracts for one Petroleum
Prospecting License (PPL) and three Petroleum Mining Leases (PML) and Lease
& License Instruments between NNPC, TUPNI, SAPETRO, PRIME 130 and NUPRC. The
national oil company further emphasised that the deals paved the way for
firming up Final Investment Decision (FID) on the Preowei, amounting to $ 2.1
billion.
It further explained that the Preowei project would
subsequently be followed by Egina South projects lined up by TUPNI and the OML
130 partners to introduce additional volumes to the best-in-class Egina
Floating, Production, Storage and Offloading (FPSO) Vessel.
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