Downstream/Midstream Commission Set to Release Regulations on Gas Pricing, Others
* Oil industry lacking strong corporate governance, says Ahmed
Emmanuel Addeh in Abuja
The Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) yesterday said that it was drafting six regulations on midstream and downstream operations to ensure clarity, including on the issue of appropriate gas pricing.
The Authority Chief Executive (ACE), NMDPRA, Mr. Farouk Ahmed, who spoke during a meeting with members of the Independent Petroleum Producers Group (IPPG) in Abuja, noted that the new regulations will further improve business processes and ease of doing business in the sector.
Ahmed listed the other new regulations as: The environmental management plan, environmental remediation fund, decommissioning and abandonment, gas infrastructure fund and natural gas pipeline tariff.
He also informed the group that a working team chaired by the Executive Director, Distribution Systems, Storage & Retailing Infrastructure (DSSRI), Mr Ogbugo Ukoha, had been set up to review the draft regulations, engage and consult stakeholders for smooth implementation when released.
“One of our key concerns is boosting local refining. Dangote and BUA refineries are coming on board; however, we want to see more companies investing in refineries so we can stop the importation of refined petroleum products, save our foreign earnings, create jobs and add value to the economy,’’ he stated.
The NMDPRA also acknowledged the gradual growth of indigenous players in local exploration and production of petroleum products, but said that more needed to be done.
Ahmed further pledged the authority’s commitment in making the business climate in the midstream and downstream conducive for local and foreign investment to thrive.
Earlier, the IPPG Chairman, Mr Abdulrazaq Isa said the group was an association of 25 indigenous Exploration and Production (E&P) companies with the vision to promote the continued development of the Nigerian petroleum industry for the benefit of industry stakeholders and the nation.
Isa noted that timely communication with industry players was important at this time that the authority is going through a transition period.
IPPG called on the NMDPRA to, as a matter of urgency, enact regulations on tariffs, domestic gas and clear license issuance modalities, amongst others.
Meanwhile, Ahmed has said that the oil sector needs strong corporate governance from the players in the sector to be able to make the needed headway.
Speaking when the Advisory Board of Oil Trading and Logistics (OTL) Africa , led by Dr Mumuni Dagazau, paid him a visit in Abuja, he noted that a situation of unclear lines of authority wasn’t good for the industry.
”We can collaborate on information sharing, from your source, from our source, but it has to be credible, it has to be very transparent, so that anybody who wants to invest in the industry or in the sector, can see the projections based on the factual numbers.
”The industry needs very strict corporate governance, that is what we are lacking. Every player thinks he is indispensable and that is why we are having some problems regarding distribution of petroleum products.
”Of course they have their own reasons. With due regards they are in the business to make money, they are also in the business to put regulations in place but when the consumer is being taken advantage of for whatever reason, it is not acceptable.
”So I agree with you that strong regulations and corporate governance is necessary in order to have confidence in the industry,” Ahmed said.
On the forthcoming OTL Africa Downstream annual event, Ahmed assured that the authority would take advantage of it and ensure its presence.
”We are always ready to collaborate with stakeholders but we must be mindful of the fact that we are regulators. We will look at your propositions and add where we can latch in because we need to also support our own internal capacities like the OTL,” he said.
Earlier, Dagazau, who represented the OTL board chairman, Mr Tunji Oyebanji, called for partnership between the the organisation and the authority, adding that the collaboration would benefit both parties.
Also, Founder, OTL Africa Downstream, Dr Emeka Akabogu, said the organisation had transited to a repository for industry information for the purpose of advancing business, operations and policy.
He said the authority has strategic role within the context of the Nigerian midstream and downstream industry and was positioned by virtue of the Petroleum Industry Act (PIA)to be exceptional.
”We want to collaborate with the Authority to ensure competition is effectively regulated, ensuring that the right standards are in place and a whole range of areas which propel the industry are explored,” he said.