•Says Commission has restored investor confidence in oil industry
Peter Uzoho in Abuja
The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe has given kudos to President Muhammadu Buhari over his swift response in resolving the regulatory overlap between the Commission and the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The NUPRC chief executive stated these yesterday, during an interview on Arise News Channel, where he fielded questions around the regulatory overlap between the two agencies, the implementation of the Petroleum Industry Act (PIA) so far and the achievements of the commission since establishment among others.
Komolafe, especially thanked the president for his directive to the Commission to take over the supervision of all crude oil export terminals in Nigeria, while also mandating the NMDPRA to hands off activities relating to the regulatory work at crude oil export terminals in the country.
The NUPRC boss also highlighted some achievements recorded by the agency over the last 18 months of its commencement as the new upstream regulator, saying the commission had succeeded in restoring investor confidence in the Nigerian oil and gas industry.
In wading into the overlap and misalignment between the two agencies created by the PIA 2021, which industry operators had observed was causing additional risks to their business operation, the president had issued a matching order to both agencies to focus only on regulating and supervising activities under their respective jurisdictions.
Buhari in a letter to the NUPRC, NMDPRA, the Nigerian National Petroleum Company Limited (NNPC) and international oil companies (IOCs), directed the Commission to take over the supervision of all crude oil export terminals in Nigeria.
He also mandated the NMDPRA to hands off any activities relating to the regulatory work at crude oil export terminals in the country.
Speaking during the interview, Komolafe explained that PIA clearly provides the statutory functions of the two regulators in the industry.
He said, “Chapter 1, Part 3 of the PIA provides for the functions of the Commission while Part 4, Chapter 1 of the PIA provides clearly statutory functions of the Authority.
“And in that respect, Section 7ee of the PIA also mandates the Commission to be fully be responsible for the regulatory activities of the terminal and issuance of Certificate of Quality and Quantity to exporters of crude oil and gas liquids within the Nigerian terminals. So in that respect, as far as the Commission is concerned, there is no ambiguity in the provisions of the PIA.
“And in the course of the implementation, there was observation of overlap by the industry, and I want to say, kudos to Mr. President. I want to recognise that Mr. President quickly responded to the situation and gave express directive to both the Authority and the Commission, and that directive is being carried out.”
He recalled that the NUPRC was established pursuant to the passage of the PIA in August 2021, after the nation had waited for almost two decades before the passage of the laudable law that comprehensively reformed the upstream sector of the Nigerian oil and gas industry.
He said credit must specifically be given to Buhari for achieving the enactment of the PIA amidst high expectations from both investors and the public.
However, since his appointment as the pioneer chief executive of the commission, Komolafe said the agency had recorded some laudable achievements within the last 18 months of its commencement as the new upstream regulator.
Komolafe, maintained that the commission had succeeded in restoring investor confidence in the Nigerian oil and gas industry.
He said he and his team had a clear line of sight right from day one on the navigational part to drive the regulatory activities of the Nigerian upstream oil sector, adding, “and I’m proud to say that within then, we have recorded a basket of achievements.”
He said the first key achievement recorded by the commission which could be fact-checked on the basis of the positive feedback that had been received was their success in restoring investor confidence into the industry, considering the importance of confidence to attracting investments.
“In view of the fact that no investor will want to put his money in an environment of uncertainty and lack of clarity, we’ve been able to restore confidence in the mind of investors, and I’m able to say that we have been able to do this via the processes that we have adopted in terms of the regulatory tools that we have put in place.
“As a matter of fact, as part of our achievements, within a record time of 18 months, we have been able to develop 18 key regulations and five of these regulations we are happy to say have been fully gazetted while the rest of the things are being reviewed by the Ministry of Justice and we are optimistic that those 18 will be gazetted within the shortest possible time so that implementation of those regulations can commence in earnest,” Komolafe stated.
Also, he recounted that the NUPRC had been able to ensure the conversion of 40 Oil Prospecting Licences (OPLs) and Petroleum Mining Licenses (PMLs) to Petroleum Prospecting Licences (PPLs) and Petroleum Mining Leases.
Additionally, he mentioned that the commission had been able to incorporate 74 Host Community Development Trusts (HCDT), which is a key part of the host community provisions in the PIA, noting that they had engendered a sense of ownership into the host communities.
Komolafe maintained, “By the time the Host Community Development Trust begins to implement developmental projects within those host communities, that itself, will engender peace in the host communities and we know that creating conducive environment for operators to thrive itself will help in achieving our core objectives, that is, to increase the oil and gas production in Nigeria.”
However, unlike pre-PIA regime, he said there was now clarity in the oil and gas industry and that issues of discretion had been abolished in the industry, saying “we now operate with clarity and our decisions are fully guided by the law.”
Komolafe also disclosed that the Commission had equally been able to automate its processes in a manner that ensures operational efficiency, which they felt was key in effectively regulating the upstream sector.
He added, “We have outlined for ourselves to ensure that there is transparency in hydrocarbon accounting as a key objective and the reason for that is to ensure that we are able to cut leakages.
“Aside that, we equally have a key objective to enhance the national oil and gas production which is a key objective drawn from the statutory mandate of the Commission.
“The other objective that we are equally pursuing is to ensure that we are able to reduce the unit cost of production of oil per barrel, believing that once we are able to achieve that, then we will be able to optimise revenue for the federation from the nation’s hydrogen resources.”
