The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is committed to being open, transparent, accountable and predictable in its regulatory roles in the oil and gas industry, its Chief Executive Officer, Gbenga Komolafe, has said.
Komolafe who spoke while receiving officials of the Human and Environmental Development Agenda (HEDA) Resource Centre and Social Action, said as a regulator, the Commission has always engaged relevant stakeholders in the formulation of all regulations and other activities, to ensure inclusiveness in the discharge of its regulatory mandates.
He pledged to continue to work in collaboration Civil Society Organizations and relevant stakeholders to guarantee maximum exploration and exploitation of the country’s natural resources, adding that the NUPRC was dutybound to ensure smooth, transparent and efficient investment processes in the petroleum upstream sector.
The recent divestments from the country’s oil and gas industry by international oil companies (IOCs), the CCE said, raised huge concerns among stakeholders, saying the Commission has a responsibility as the regulator to ensure the divestments were conducted fairly and transparently to benefit all parties, including the Nigerian people.
To achieve this objective, he said the Commission established stringent regulatory frameworks and guidelines to govern the divestment process with a focus on transparency, accountability and adherence to global best practices.
“The Commission established mechanisms to monitor and evaluate the performance of divested assets pre and post-transactions. This includes regular audit inspections and reviews to ensure that operators meet their obligations and that the divested assets are managed efficiently and responsibly,” he said.
The divestment guiding framework by the Commission, the CCE pointed out was anchored on seven major pillars too ascertain compliance, with extant petroleum laws and the Assignees’ capacity to assume the responsibility of developing the assets acquired.
The pillars include the technical capacity of the Assignees; financial capability of Assignees; legal status of both the Assignors and Assignees; decommissioning and Abandonment (D&A) plans and funding; Host Community Trust/Environmental Remediation Fund; Industrial Relations and Labour Issues, as well as Data Repatriation by the Assignors.
Besides, the CCE said the Commission has been working with security agencies and other relevant government entities to curb the menace of oil theft, which has almost crippled the sector.
With this effort already yielding results, with increased oil production capacity in recent times, Komolafe said the Commission has also developed regulations to promote proper and efficient accounting of crude oil production and advanced cargo declaration to forestall leakages in revenues accrued to the government.
On the current global discussion on energy transition and the commitment of the Commission to the Conference of the Parties (COP) Agreement on achieving net zero emission by the year 2060, he said the Commission’s emphasis has been on getting appropriate funding for the development of the country’s hydrocarbon resources. Although the Federal Government has declared gas as the transition fuel for the country, he said the Commission has so far made successful moves at converting flared gas into commercial gains.
Apart from the offer of 49 flare sites to preferred winners to monetize the flared gas and eliminate gas flaring, he said the Commission has continued to pursue the Nigerian Gas Flare Commercialisation Programme (NGFCP), which accounts for the monetization of about 50% of gas currently being flared towards achieving Net Zero target.
“The industry has already achieved 60% Fugitive methane emission reduction target from Oil and Gas for the first time based on robust data provided by the NUPRC, while engaging the International Finance Corporation regarding opportunities surrounding Carbon Capture Utilization and Storage (CCUS),” he said.
On Energy Transition, Decarbonisation and Carbon Monetisation, the CCE said the Commission established an Energy Transition and Carbon Monetisation unit, formulated the Regulatory for Energy Transition, Decarbonisation and Carbon Monetisation in Nigeria’s Upstream Petroleum Sector, and commenced the process for enabling Carbon Credits Earnings through a defined framework for key climate action initiatives and related activities.
In line with the Petroleum Industry Act (PIA) on Host Community Development, Komolafe said 124 Host Community Development Trusts (HCDT) have been Incorporated, while an Original Equipment Manufacturer (OEM) developed a digital portal, HostComply, to create an online platform to ease regulatory compliance and oversight functions for the Regulator to enable the Settlors to meet Regulatory requirements in a timely, efficient, cost-effective manner.
The Portal, he said, would also provide the Host Community Development Trust the technology to interface and engage the settlors and professionally manage projects in their respective communities in conformity with global ESG best practices and foster an enabling environment for the seamless conduct of upstream industry operations.
Other achievements by the Commission since the enactment of the PIA 2021, the CCE said, include technical, operational and commercial activities to promote healthy, safe, efficient and effective conduct of upstream petroleum operations in an environmentally acceptable and sustainable manner; implementation of government policies for upstream petroleum operations, and promotion of an enabling environment for investment in upstream petroleum operations, among others.
To ensure effective discharge of its regulatory mandate, he said the Commission gazetted 12 Regulations in line with the provisions of the PIA 2021, with 13 others currently at different stages of being gazetted.