*Set to enforce compliance on installation of measurement devices
Emmanuel Addeh in Abuja
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has released six new regulations to guide operators in the Nigerian oil and gas industry in line with the provisions of the Petroleum Industry Act (PIA).
Key highlights of the regulations, according to the sector regulator, are that henceforth, the noose would be tightened on operators who load petroleum liquids in unauthorised locations as well as those who do not install standard measuring devices on their facilities.
Speaking during the programme which took place at the NMDPRA headquarters in Abuja, the Authority’s Chief Executive, Mr. Farouk Ahmed, listed the new guidelines as: The midstream and downstream petroleum operations regulations, the petroleum measurement regulations and assignment or transfer of licence and permit regulations.
Other regulations mentioned by Ahmed included: “The natural gas pipeline tariffs regulation, the gas pricing, domestic demand and delivery regulation as well as the petroleum (transportation and shipment) regulation.”
Describing the PIA as the key legislative instrument that governs the business of petroleum operations in Nigeria, Ahmed stated that the law emplaces a framework for the development of the relevant regulations that will support sustainable growth across the oil and gas value chain in Nigeria.
According to him, the regulations were designed to enable businesses through regulatory clarity, certainty, fairness, transparency, and best industry standards.
In addition to the regulations that were launched, he explained that 14 other regulations, had been developed and will be issued shortly.
He lauded all the stakeholders, some of whom he said spent days working on the new regulations, led by the authority’s regulations drafting team who worked tirelessly to deliver on the critical assignment.
Giving a breakdown of the regulations, the NMDPRA Secretary/Legal Adviser, Dr. Joseph Tolorunse, stated that the objectives of the midstream and downstream petroleum operations regulations, aside guiding the operations of the companies in the sector, will provide procedures for the granting of licences, permits, authorisations and payment of fees as well as proffering sanctions and penalties for non-compliance.
Its application, he said, would encapsulate gas operations, petroleum liquid operations, oil and gas service permits as well as spell out duties and obligations of licensees and permits holders.
The regulation will also apply to the importation, exportation, shipping, unshipping, and landing of petroleum, petroleum liquids, and products, conformity assessment.
He added that it would further guide technology adaptation, meaning that if a company intends to introduce a new technology, it will have to be approved by the authority to ensure that it’s adaptable to the Nigerian environment.
On the assignment or transfer of license and permit regulations, he stated that it will establish procedure for assignment or transfer of license or permit by holders in cases of mergers , acquisition and takeovers as well as prescribe fees for such assignments or transfer.
Tolorunse added that it would further provide sanctions or administrative penalties for failure to comply with the regulations, ranging from punitive measures to suspension of operations.
This, he said, would apply to the midstream processing facilities, installations, terminals and pipelines, blending facilities and petroleum products facilities as well as oil and gas retail outlets.
Also, he stated that on the liquids measurement regulation, it will ensure accurate measurement and allocation of gas or its derivatives as well as crude oil or its derivatives.
“It’s important for companies to install appropriate measurement instruments in appropriate points in oil and gas operations. It will also help determine the basis for calculating revenue accruing to government, licensees, contractors, and other parties in the midstream and downstream petroleum operations,” he added.
He mentioned that if appropriate metering are installed, it will stem the spate of crude losses through theft in the value chain.
In all, he noted that the regulations will aid the Authority in controlling processes, setting standards, and monitoring operations in the technical and commercial aspects of the midstream and downstream petroleum sector in Nigeria and enhance internally generated revenue.
NMDPRA’s General Manager, Information Technology, Anne Omezi, who made a presentation on the launch of the midstream and downstream oil and gas service permits, explained that going forward, no company or person shall be engaged by any person or operator in the sector without a service permit issued.
“Consequently, the licensee or anyone wishing to render service in the downstream and midstream must possess a service permit,” she stated.
According to her, the permits fall into three categories: The general category for artisans , major category and the specialised permits, with applications billed to be processed within three working days, except for those requiring verification of skills, place of service and capacity of technical workforce.
She explained that a portal has now been made available for that purpose and urged applicants to avail themselves of the information which can be also be accessed through the NMDPRA website.
Chairman of the NMDPRA board, Idare Ogan, explained that as much as the NMDPRA wants to provide an environment that encourages growth and development, without strict compliance, nothing will be achieved.
“Compliance is not only a major issue for operational efficiency, the authority will hammer on compliance when things go wrong,” he noted.