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NUPRC Proposes Declaration of State of Emergency  to Tackle Oil Theft, Others
NUPRC
NUPRC
– By Ikenna Omeje

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NUPRC Proposes Declaration of State of Emergency  to Tackle Oil Theft, Others

As part of measures to address numerous challenges confronting the Nigerian oil and gas industry such as oil theft, insecurity, ageing and decaying infrastructure, amongst others, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has proposed the declaration of State of Emergency.
The Chief Executive Officer of NUPRC, Engr. Gbenga Komolafe stated this in his keynote address at the 2022 annual international conference of the Nigerian Association of Energy Correspondents (NAEC), which held in Lagos with the theme,  “Energy Transition: “Shaping the Future of Nigeria’s Energy Industry, an Appraisal of PIA, Evolving Benefits and Challenges.”


Urgent Need to declare state of Emergency

Represented by the Director of the National Oil and Gas Excellence Centre (NOGEC), Dr. Abel Nsa, Komolafe said: “The imperative is on Nigeria to declare some sort of emergency for the oil and gas industry. Aside energy transition, other issues bedevil our industry — such as oil theft, security, ageing and decaying infrastructure, amongst others.
“All these contribute to high production costs, which must be minimised. The commission, in line with the spirit of the PIA, will champion urgent access to the industry for all serious-minded players so that unexplored reserves can be tapped into to derive value for investors as well as for Nigeria.”

The Road Map

He, however, informed that there is a Road Map for tackling the security challenges in the industry, through collaboration with the security agencies and installation of gadgets for real time loss detection in line with  the provisions of the Petroleum Industry Act (PIA).
According to Komolafe, the PIA “has put an end to the marginal fields era,” adding that “no marginal fields shall be declared under this era because the PIA provisions have foreclosed this as well as any discretionary allocation of oil blocks.”
He said that the PIA provides incentives aimed at growing reserves towards realisation of the nation’s aspiration of 40 billion barrels reserves, and there are plans to reward production Milestones in line with Sections 232 and 233 of the Act.

Additional Guidelines

The NUPRC boss also noted that the Commission is planning seven additional regulations in line with provisions in the Act to guarantee return on every dollar invested in the country over any other jurisdictions.
Komolafe said: “The Commission has issued six priority regulations comprising of: Nigeria Upstream Host Communities Development Regulations, Nigeria Upstream Fees and Rents Regulations, Nigeria Royalty Regulations, Conversion and Renewal Regulations, Domestic Gas Delivery Obligations Regulations and Licensing Round Regulations.
“The Commission is also in the process of issuing additional seven Regulations in the Phase II of the exercise in consultation with stakeholders in line with Section 216 of the PIA.
“As a reminder, Section 92 of PIA 2021 provides a flexible tool for honouring investment guarantees and contract sanctity. This has created the much desired stability and predictability for the Nigerian oil and gas industry to excel and enabling existing pre-PIA businesses to succeed.“
The generous fiscal terms consciously enshrined in the PIA are also targeted towards bolstering return on every dollar invested in Nigeria as against any other jurisdiction.
“In consonant with the statutory regulatory mandates of the Nigerian Upstream Petroleum Regulatory Commission, the Act empowers the Commission on technical and commercial regulation of the Upstream petroleum activities in a manner to ensure sustainable hydrocarbon exploration and production at optimum cost, dealing with issues of environmental remediation, decommissioning, and abandonment, and setting up of Host Community Development Trust (HCDT).”

NNPC Boss Speaks

NNPC GMD, Mallam Mele Kolo Kyari copy (1)
NNPC GMD, Mallam Mele Kolo Kyari copy (1)

Also speaking at the event, the Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, said the company  was working with security agencies and other stakeholders to tackle oil theft.

Kyari noted that the NNPC’s target was to increase production and bring back domestic refining capacity to ensure the country’s  energy security, adding that addressing security challenges in the Niger Delta will bring back investment and ramp up production to 2.1 mbpd.
“As you are all aware, we’re doing everything possible to contain it. Security is a major challenge regarding crude oil theft. Yes, we understand today that our production is very low for two reasons. One, because of the security situation in the Niger Delta assets.“
But more than anything, it cannot stop us from investing in the assets and therefore, you can’t have decline. Also, you’re unable to put money into it and expect to have high production,” he said.
“Resolving the security challenge will surely bring back investment and will also optimise the current availability or capacity that we have.“We know that with certainty that we will resolve the security issue and we can easily come to 2.1 million barrels of oil per day.”
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