Upstream Commission, Midstream/Downstream Authority Formally Begin Operations


•Govt declares DPR, PEF, PPPRA defunct

•You have no reason to fret, FG assures agencies’ staff

•My immediate concern is to meet OPEC quota, says Komolafe

Emmanuel Addeh in Abuja

The federal government yesterday formally inaugurated the leadership of the Nigerian Upstream Regulatory Commission (NURP) as well as the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

The development signaled the official winding up of three agencies which they succeeded as prescribed by the Petroleum Industry Act (PIA).

The now defunct agencies according to the federal government are the Department of Petroleum Resources (DPR), whose Director, Mr Sarki Auwalu, was dropped by President Muhammadu Buhari after his name was initially sent to the National Assembly; the Petroleum Equalisation Fund (PEF) and the Petroleum Products Pricing Regulatory Agency (PPPRA).

Minister of State, Petroleum, Mr. Timipre Sylva, while speaking on the sidelines of the inauguration of the chief executives of the NURP, Mr. Gbenga Komolafe and his counterpart at the NMDPRA, Mr. Farouk Ahmed, in Abuja, described the occasion as historic, saying it marked the beginning of a new era in the oil and gas industry.

He explained that after a rigorous screening process and the issuance of letters of appointment to the new chief executives, both regulatory agencies have now taken off with competent leadership.

With the new law, Sylva stated that the federal government was expecting a lot of growth in the oil and gas industry, which he said had been stagnated for a long time while a lot of investors stood aloof.

“Today, the PIA has clarified the legal framework around the sector and the agencies and I don’t see anything now stopping investors from coming and we are very lucky to have very competent industry people with proven experience.

“We believe they can hit the ground running. Nigeria should brace up for exponential growth in the oil and gas industry,” the minister stated.

On the fate of the preceding agencies, he explained that it remains a matter of law, noting that as the PIA states, all the assets and even the staff of the agencies would now be vested in the commission and on the authority.

“That means that the DPR will not have anything. It doesn’t exist anymore. It also repeals the DPR Act, the Petroleum Inspectorate Act and the Petroleum Equalisation Act and the PPPRA Act. The law specifically repeals them and it is clear that those agencies do not exist anymore.

“The law also provides for the staff and for the jobs in those agencies to be protected. But I am sure that unfortunately, that doesn’t cover the chief executive who was on a political appointment,” he pointed out.

The minister disclosed that the process of assigning and aligning affected staff was ongoing and would be completed in the coming weeks.

“That process will be ongoing because we have to rationalise the staff. The authority has staffing coming from the defunct PEF, PPPRA and the DPR and of course the commission staff will come from the DPR. That’s going to be the process that will be ongoing for the next few weeks or so,” he emphasised.

The new chief executive of the upstream commission, Komolafe, in his comments, assured that the enactment of the PIA would usher in a massive turnaround in the activities of the upstream that he was appointed to midwife.

“Nigerians should expect massive deliverables from the moment we take over in the sense that the PIA has ended a regime of uncertainty in terms of the governance of the industry.

“Basically, we shall focus on activities that enhance the production activities in the upstream in a manner that we will be able to hit our OPEC quota and will endeavour to ensure that we deliver to Nigerians a 21st century regulatory commission.

“We will not just be a regulator, we will be an enabler of investment. So, Nigeria should expect be part of what we actually plan under our watch,” he stressed.

On plans by the international oil companies (IOCs) to exit their onshore and shallow water operations, Komolafe stated that it remains purely an investment decision, but stressed that the commission would strive to engage the IOCs to understand their challenges.

“We will engage critically with them and if it becomes their decision to move from their onshore activities, what will be paramount to us is to look at their challenges and see how far we can intervene positively. Don’t forget the act makes the commission both technical and financial regulator.

“We will do more because investment decisions are commercial decisions and we will see how we can intervene. But it’s an investment decision borne out of certain considerations. We will try to know what those considerations are and intervene where we can.

“But the key is that we focus on activities that will expand and enhance production activities in a manner that we can be meeting our OPEC quota and as much as possible to optimise the federation revenue,” he noted.

Also speaking, the midstream and downstream boss, Farouk, promised to give a lot of attention to the development of the country’s enormous gas resources.

“The key area that you touched which is close to my heart is the gas development. This will lead to industrialisation, job creation and our main focus is to attract investment in gas. Of course, we need to work with the commission, the IOCs to invest in our hydrocarbons and more so in the gas sector because we have abundance of gas even more than the reserve of crude oil.

“Why do we have shortage of gas, maybe because there’s no investment? Why are we having challenges in investment, maybe because our pricing framework and other parameters that investors look at don’t measure up? The PIB stagnated for over 20 years and the investors were sitting on the fence waiting to see what direction things were going. Now everything is clear, thanks to the government.

“We will ride on that and create more opportunities for investment by going through the whole value chain for production to consumption in terms of fair pricing to all stakeholders,” he noted.

The Permanent Secretary, Ministry of Petroleum, Dr. Nasir Gwarzo, in his remarks urged all the staff of the defunct agencies not to fret over their future, stating that everyone would be fairly treated.

“This is to assure our staff and CEOs that the transition process has been fine-tuned in such a way that shows smooth transition including the anxiety among members of staff across board. There’s a strong leadership under the minister of state to make sure everybody is given a fair transition,” he assured.

On his part, Auwalu remarked that the defunct DPR was willing to ensure a smooth takeover by the new agencies, stating that during week, meetings will be held to ensure a smooth transition.