*NNPC eyes $2.1bn gas revenue, executes five suite of agreements on OML 130 with Total, CNOOC, othersEmmanuel Addeh in Abuja and Peter Uzoho in Lagos
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), yesterday, signed seven key regulations in furtherance of the implementation of the Petroleum Industry Act (PIA) 2021.
That was as the Nigerian National Petroleum Company Limited (NNPC), yesterday, executed five new deals covering the renewal of Oil Mining Lease (OML) 130 Production Sharing Contract, conversion of the acreage to a Petroleum Mining Lease (PML), and three other deals.
Speaking at an event in Abuja, Chief Executive of NUPRC, Mr. Gbenga Komolafe, noted that the signing into operation of the seven key regulations in furtherance of the implementation of the PIA was in line with the provisions of the new law and in fulfilment of the mandate of the commission.
One of the new regulations, which had just been operationalised, included the Nigeria Upstream Petroleum Measurement Regulations, 2023, which Komolafe noted would close the metering gap in upstream petroleum operations and encourage accelerated meter roll out in upstream petroleum operations.
Besides, Komolafe stated that the metering regulation would encourage the development of independent and competitive meters used in the upstream, attract private investment in the provision of metering services, as well as provide for the regulation of the measurement of petroleum produced.
Komolafe pointed out that the regulation would ensure accurate measurement of petroleum as a basis for the calculation of petroleum revenue accruable to the government and define requirements for the design, fabrication, manufacturing, testing, calibration, operation and maintenance of upstream metering equipment.
For the second regulation, the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation, 2023, the NUPRC chief executive stated that it would provide the general rules for production curtailment and utilisation of the produced petroleum in relation to export and domestic crude oil supply obligation.
The Frontier Basins Exploration Fund Administration Regulations, 2023, Komolafe explained, would provide the general rules for the exercise of the commission’s responsibilities with respect to frontier basins to encourage and attract investment to the basins in Nigeria.
For the Nigeria Upstream Decommissioning and Abandonment Regulations 2023, the NUPRC boss asserted that it seeks to ensure that decommissioning and abandonment activities are conducted in accordance with good international petroleum industry practice.
The regulations, he noted, also set the framework for the establishment and administration of a decommissioning and abandonment fund.
According to Komolafe, the Significant Crude Oil and Gas Discovery Regulations, 2023, would ensure optimum exploitation of petroleum covered by Petroleum Prospecting Licenses (PPLs) granted under the Act, by the retention of areas of significant crude oil and gas discovery by a licensee for a specified time.
In explaining the Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023, Komolafe stated that it would reduce environmental and social impact associated with gas flaring and venting of natural gas and fugitive methane emissions into the atmosphere.
Besides, he explained that it would help preserve and protect the environment, prevent waste of natural resources and enhance energy transition in Nigeria.
Komolafe added that the newly unveiled regulation would create social and economic benefits from gas flaring and venting as well as set out the procedure for the commission to exercise its rights to take gas at flare point.
In addition, he said that the Nigeria Upstream Petroleum Unitisation Regulations, 2023 establishes rules, principles, and procedures for the implementation of unitisation of oil and gas from a petroleum reservoir that extends beyond the boundaries of a licence or lease area into an area to which another licence or lease relates.
Komolafe stated, “These seven regulations being signed today represent a significant milestone achievement for the commission in its continued stride towards the attainment of the goals of the PIA and the reformation of the upstream petroleum sector.
“All the regulations are revolutionary in nature aimed at providing a regulatory environment that assures efficiency, predictability, clarity, and effectiveness to the industry in the discharge of the commission’s mandate.”
He recalled that five regulations that were successfully gazetted between June and October 2022 were the Petroleum Licensing Round Regulations 2022; Petroleum Royalty Regulations 2022; Domestic Gas Delivery Obligations Regulations 2022; Conversion and Renewal (Licences and Lease); and Nigeria Upstream Petroleum Host Communities Development Regulations 2022.
Komolafe reaffirmed that the seven regulations that were signed were part of the 13 draft regulations that were presented for discussion during the first, second, and third phases of the commission’s consultations with stakeholders between 2022 and 2023.
Other regulations are Upstream Petroleum Fees and Rents Regulations; Upstream Decommissioning and Abandonment Regulations; Unitisation Regulations; Acreage Management (Drilling and Production) Regulations; Frontier Exploration Fund Administration Regulations; and Upstream Environmental Remediation Fund Regulations.
They also include the Upstream Petroleum Safety Regulations; Upstream Petroleum Environmental Regulations; Upstream Petroleum Measurement Regulations; Advance Cargo Declaration Regulations; Significant Discovery Regulations; Domestic Crude Oil Supply Obligation Regulations; and Gas Flaring and Venting (Prevention of Waste and Pollution) Regulations.
Furthermore, Komolafe stated that the inputs of the stakeholders from the various engagements were considered in the drafting of the regulations. He noted that they were subsequently forwarded to the Attorney General of the Federation and Minister of Justice for vetting, legislative standardisation and approval.
In his remarks, Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Dr. Ogbonnaya Orji, expressed the readiness of the initiative to collaborate to push the boundaries of transparency and accountability in the oil and gas industry.
He lauded the NUPRC for finding the courage and selflessness to enact some of the regulations, which would further strengthen the regulatory institution.
Orji reiterated that Nigeria lost over 600 million barrels of oil to theft and other sharp practices in the sector over a period of 12 years, amounting to about $46.16 billion or N16.25 trillion.
NNPC Eyes $2.1bn Gas Revenue, Executes 5 Suite of Agreements on OML 130 with Total, CNOOC, Others
Meanwhile, NNPC Limited executed five new deals covering the renewal of the OML 130 Production Sharing Contract, conversion of the acreage to a PML and three other deals.
The new deals were based on the provisions of the Petroleum Industry Act (PIA) 2021, and with the utmost aim of unlocking gas revenues of up to $ 2.1 billion for Nigeria in both short and long terms.
The execution of the deal for renewal, conversion to PML and three other agreements by all the parties took place in Abuja, and was witnessed by Permanent Secretary, Ministry of Petroleum Resources, Mr. Gabriel Aduda.
THISDAY gathered that the deal was part of the gas commercialisation programme being considered by NNPC, which seeks to end the perennial dispute over OML) 130, thereby upscaling the country’s crude oil output to about three million barrels per day and unlock gas revenues to the tune of about $2.1 billion in both short and long terms for the country.
NNPC executed the deals with its partners, including Total Exploration and Production Nigeria (TEPNG), China National Offshore Oil Corporation (CNOOC), South Atlantic Petroleum Nigeria Limited (SAPETRO), and Prime 130 Limited, and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
A statement issued by NNPC after the signing of the deals said the suite included PSC Contract between NNPC Limited and its contractors, China National Offshore Oil Corporation (CNOOC) & South Atlantic Petroleum (SAPETRO) with Total Upstream Nigeria (TUPNI) as the operator; Heads of Agreement (HoA) Amendment between NNPC Limited, TUPNI, SAPETRO, PRIME 130, & CNOOC; a Settlement Repayment Agreement (SRA) Addendum between NNPC and its Contractors (CNOOC & SAPETRO).
Others were Concession Contracts for one Petroleum Prospecting Licence (PPL) and three Petroleum Mining Leases (PML) and Lease & License Instruments between NNPC, TUPNI, SAPETRO, PRIME 130 and NUPRC.
The national oil company further emphasised that the deals paved the way for firming up Final Investment Decision (FID) on the Preowei, amounting to $ 2.1 billion.
It further explained that the Preowei project would subsequently be followed by Egina South projects lined up by TUPNI and the OML 130 partners to introduce additional volumes to the best-in-class Egina Floating, Production, Storage and Offloading (FPSO) Vessel.
