• Fri. Sep 29th, 2023

Crude oil theft: NUPRC consults stakeholders on upstream petroleum measurement regulation, others


Feb 7, 2023

By Bassey Udo 

To create an enabling environment for growth and investments in the Upstream Oil & Gas industry in the country, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Monday held third phase of consultations with industry stakeholders on regulation development as mandated by Section 216 of the Petroleum Industry Act (PIA) 2021.

Pursuant to its commitment, the Commission Chief Executive, Gbenga Komolafe, said in Abuja on Monday that five new draft regulations were presented for consideration in compliance with Section 216(4)(g) of the PIA 2021 prior to finalizing the round of consultations.  

They include regulations on the Upstream Petroleum Measurement; the Advance Cargo Declaration; Significant Discover y;Gas Flaring, Venting and Methane Emissions (Prevention of waste and Pollutions), and Domestic Crude Oil Supply Obligation. 

Reviewing the progress made so far with the stakeholder consultations, Komolafe said a total of 13 draft regulations were presented for discussion during the First and Second phases of the exercise held last year. 

He listed the regulations to include those for the Nigeria Upstream Petroleum Host Communities Development; Royalty Regulations; Domestic Gas Delivery Obligation; Nigeria Conversion & Renewal (Licence and Lease); Petroleum Licensing Round; Upstream Petroleum Fees and Rents, and Upstream Decommissioning and Abandonment

Others were for the Unitization; Acreage Management (Drilling & Production); Frontier Exploration Fund Administration; Upstream Environmental Remediation Fund; Upstream Petroleum Safety, and Upstream Petroleum Environmental

He said the inputs of the Stakeholders from those engagements were incorporated into the final draft regulations, where necessary, before being forwarded to the Attorney General of the Federation and Minister of Justice for vetting, legislative standardization, and approval. 

At the end of the process, the NUPRC Chief said  five of the regulations, namely those for the Nigeria Upstream Petroleum Host Community Development Trust; Royalty; Domestic Gas Delivery Obligation; Nigeria Conversion & Renewal (Licence and Lease), and Petroleum Licensing Round, have been gazetted, while the remaining six have been finalised and ready for gazetting. 

He said the successful outcome of the consultations was as a result of the Commission’s commitment to ensure that regulations and key policies necessitated by the PIA were developed and gazetted timely so that the industry operators could align their operations with the PIA provisions as quickly as possible.

The process of formulating the regulations, the CCE restated, has been a rigorous and strenuous exercise, adding that they were products of critical thinking and evaluation, and hard work by the Commission’s Regulation development Team and the Presidential Implementation Committee on PIA. 

Despite these efforts, he noted that the process was not complete until the Stakeholders’ critical inputs were obtained, discussed, and incorporated, where necessary, in the regulations.

He emphasised the importance of the third phase of consultations in the Commission’s regulations development efforts, and saying it was a final or exhaustive phase in the drive to support the upstream industry operators come up with robust regulations with international best standards. 

“The Commission will continue to embark on programmes and policies that will create an enabling environment for growth and more investments in the Nigerian upstream oil and gas sector,” Komolafe said.

The NUPRC, he said, has no plans to bring an incremental fiscal burden on operators in the industry, which would erode their commitment to business growth, adding that the regulations would support the sector to have visibility on production systems across the industry

The Executive Commissioner, Economic Regulation & Strategic Planning, NUPRC,  Kelechi Ofoegbu, said the new regulations would ensure transparent measurement of Nigeria’s hydrocarbons.

“It would also lay the necessary framework in standardisation of the processes involved in upgrading hydrocarbons measurements in alignment with international best practices,” he said.

Ofoegbu said it would further help operationalise the PIA, ensure accurate measurement of Nigeria’s oil and gas with proper calibration of LACT machines, similar to what happens with power consumption meters.

“It will give us the capacity and the capability to monitor upstream production from beginning to the end and ensure transparency in the loading process.

“We complain about crude theft. It is stolen and it makes its way to the international market. But how is that possible? These regulations will help us understand the DNA of every vessel coming into our shores to load crude,” Ofoegbu explained.

Present at the event were  Chief Executive Officers of the IOCs;

Chief Executive Officers of Indigenous Operators; Executive Commissioners of the NUPRC; members of the Oil Producers Trade Section of the Lagos Chambers of Commerce, and Independent Petroleum Producers Association. 

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