The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has rolled out seven new regulations for an efficient, predictable, clear and effective regulatory environment for the Nigerian oil and gas industry.
The seven new regulations are the Nigeria Upstream Petroleum Measurement Regulations, 2023; Production Curtailment and Domestic Crude Oil Supply Obligation Regulations, 2023; Frontier Basins Exploration Fund Administration Regulations, 2023; Nigeria Upstream Decommissioning and Abandonment Regulations 2023; the Significant Crude Oil and Gas Discovery Regulations, 2023; Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023, and Nigeria Upstream Petroleum Unitization Regulations, 2023.
The new regulations signed and issued on Thursday at the Commission’s headquarters in Abuja by the Commission Chief Executive, Gbenga Komolafe, was witnessed by the Executive Secretary of the Nigerian Extractive Industry Transparency Initiative (NEITI), Orji Ogonnaya Orji.
This brings to 12 the total number of regulations so far finalised, approved and issued by the Commission since it was established and given the mandate as the sole regulatory authority in the Nigerian upstream petroleum industry under the provisions of the Petroleum Industry Act (PIA) 2021.
Previously, five approved regulations were successfully gazetted by the Commission between June and October 2022. They included the Petroleum Licensing Round Regulations 2022; Petroleum Royalty Regulations 2022; Domestic Gas Delivery Obligations Regulations 2022; Conversion and Renewal (Licences and Lease), and the Nigeria Upstream Petroleum Host Communities Development Regulations 2022.
Initially, 18 regulations were identified by the Commission as priority legislations required to make the industry work and operate efficiently and effectively under a stable regulatory environment to attract new investments, while retaining existing ones.
Issuing the regulations, which the Commission Chief Executive described as revolutionary in nature, represents a significant milestone achievement for the agency in its continued stride towards the attainment of the goals of the PIA and the reformation of the upstream petroleum sector.
At the formal presentation of the latest set of regulations in Abuja on Thursday the Commission Chief Executive said all the regulations issued so far were aimed at providing a regulatory environment that assures efficiency, predictability, clarity, and effectiveness to the industry in the discharge of the Commission’s mandate.
The PIA 2021 empowers the Commission to make regulations that would give meaning and intent to the spirit of the PIA. Consequently, in fulfilment of its mandate, the Commission embarked on the drafting of the five initial regulations that were gazetted and published, to demonstrate its commitment towards providing an enabling business environment in the Nigerian upstream oil and gas industry.
“Our drive to promote clarity, trust and predictability in the industry has remained unflinching as evident in the efforts deployed towards ensuring that regulations and key policies necessitated by the PIA are developed and gazetted expeditiously to enable alignment with the provisions of the PIA.
“The latest seven regulations to be signed and issued are part of the 13 draft regulations presented for discussion during the first, second and third phases of our consultations with industry stakeholders between 2022 and 2023,” the CCE said.
From the various engagements, he said inputs from stakeholders were considered in the drafting of the regulations, which were subsequently forwarded to the Attorney General of the Federation and Minister of Justice for vetting, legislative standardisation, and approval.
Details about the functions of the seven new regulations showed that the Nigeria Upstream Petroleum Measurement Regulations, 2023 would help close the metering gap in upstream petroleum operations; encourage accelerated hydrocarbon measurement metering devices roll-out in upstream petroleum industry operations; encourage the development of independent and competitive meters used in the upstream industry; attract private investments in the provision of metering services; provide for the regulation of the measurement of petroleum produced; ensure transparent and accurate measurement of crude oil and gas as a basis for the calculation of oil and gas revenues accruable to the government, and define requirements for the design, fabrication, manufacturing, testing, calibration, operation and maintenance of upstream metering equipment.
This regulation is a clear departure from the existing situation in the Nigeria upstream petroleum sector since oil was discovered in Nigeria in 1956 and production commenced in 1958.
The Production Curtailment and Domestic Crude Oil Supply Obligation Regulations, 2023 is designed to provide general rules for production curtailment and utilisation of the produced petroleum in relation to export and domestic crude oil supply obligations, pursuant to Sections 8(c) and 109 of the PIA.
The Frontier Basins Exploration Fund Administration Regulations, 2023 would provide the general rules for the exercise of the Commission’s responsibilities with respect to frontier basins in Nigeria, pursuant to Section 9 of the PIA and the administration of the Frontier Exploration Fund.
The aim is to encourage and attract investments to the frontier basins in the country.
The Nigeria Upstream Decommissioning and Abandonment Regulations 2023 seeks to ensure that decommissioning and abandonment activities are conducted in accordance with good international petroleum industry practice.
Also, the regulations set the framework for the establishment and administration of a Decommissioning and Abandonment Fund.
Similarly, the Significant Crude Oil and Gas Discovery Regulations, 2023 would ensure optimum exploitation of petroleum covered by Petroleum Prospecting Licenses, granted under the PIA, by the retention of areas of significant crude oil and gas discoveries by a licensee for specified time in accordance with Section 78 of the PIA.
The Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023 seeks toto provide reduce environmental and social impact associated with gas flaring and venting of natural gas and fugitive methane emissions into the atmosphere; 1preserve and protect the environment; prevent waste of natural resources; enhance energy transition in Nigeria; create social and economic benefits from gas flaring and venting, and set out the procedure for the Commission to exercise its rights to take gas at flare point, in accordance with the PIA and all other applicable laws.
The Nigeria Upstream Petroleum Unitization Regulations, 2023 establishes rules, principles, and procedures for the implementation of unitization 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.
In rolling out the latest regulations, the CCE urged the regulation development team to accelerate efforts to speedily conclude work on the other pending regulations along with others that have been identified and being developed.
He assured the industry of the Commission’s continuous dedication to develop and issue policies that would create an enabling environment for growth and more investments in the Nigerian upstream oil and gas sector.