NUPRC Begins New Phase of Regulations, Moves to Improve Ethical Standards in Upstream Operations

Emmanuel Addeh in Abuja

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday, began the phase four of its consultation with stakeholders on regulations development, as mandated by Section 216 of the Petroleum Industry Act (PIA) 2021.

The meeting which was held with members of the Oil Producers Trade Section (OPTS), the Independent Petroleum Producers Association, Chief Executive Officers of the International Oil Companies (IOCs) as well as indigenous operators held in Abuja.

Chief Executive of the NUPRC, Mr Gbenga Komolafe, who spoke on the occasion, said a novel regulation which would see the introduction of high ethical standards in upstream operations was being introduced.

Represented by the Executive Commissioner, Economic Regulation and Strategic Planning, Dr Kelechi Ofoegbu, the NUPRC boss noted that the new phase of public hearings on the making of regulations for the upstream will be divided into two segments.

The first segment, according to him, would witness discussions on Draft Upstream Commercial Operations Regulations 2023, which is meant to foster a business environment conducive for petroleum operations.

He explained that the best way to actualise this objective was by establishing a framework for the economic regulation of commercial operations in upstream oil and gas ventures.

“This draft regulation proposes to establish the framework on the procedure and process for evaluation and approval of field development plans and annual work programme and budget approvals,” he stated.

The Draft Upstream Petroleum Development Contract Administration Regulations, Komolafe explained, prescribes the framework for the regulatory administration of petroleum development contracts relating to upstream petroleum operations.

Also listed for discussion was the Draft Upstream Revocation of Licences and Lease Regulations, which proposes to set out the framework for implementing the revocation provisions of the Act and for dealing with post revocation issues in a systematic manner.

On the Draft Petroleum Assignment of Interest Regulations 2023, the NUPRC head explained that it would elevate the provisions of the existing guidelines on divestment of interest to a regulation and by so doing, improving the rules to reflect current realities.

However, he pointed out that the second segment would consider the Draft Upstream Petroleum Code of Conduct & Compliance Regulations 2023.

“This is a novel regulation aimed at ensuring commitment by licensees, lessee and permit holders to maintain high ethical standard in the conduct of upstream petroleum operations.

“The regulation also establishes a framework for compliance and consequences for non-compliance which would ultimately create an enabling environment for industry to thrive.

“The code of conduct covers areas bordering on corporate governance, operational activities, and dispute resolutions,” the NUPRC chief executive noted.

Also, Komolafe explained that the Draft Nigerian Upstream Petroleum (Administrative Harmonisation) Regulations 2023 seeks to provide regulatory clarity on the implementation of the dual regulatory regime in the upstream.

He explained that this was occasioned by the preservation of licences and leases granted under the Petroleum Act and not converted under the PIA.

Besides, he listed the Draft Amendment to the Nigerian Upstream Petroleum Host Communities Development Regulations 2022, which would introduce certain amendments to the existing regulation on the implementation of the host community regime to further ease the administrative process.

In addition, he maintained that the regulation would provide regulatory clarity to the challenges that the implementation of the regime has thrown up in the last one year since the initial regulation was established.

“The process of formulating the above regulations has been a rigorous and strenuous exercise. They are products of critical thinking and evaluation, and hard work by the commission’s regulation development team.

“Despite this however, the process is not complete until the stakeholders’ critical inputs are obtained, discussed, and incorporated, where necessary, in the regulations,” he stressed.

Komolafe stated that he was of the firm view that with the level of turnout a healthy, robust, and intellectual discussion on the regulations that meet best international standard and practice was assured.

He further recalled that many regulations had already been gazetted and published to date between June 2022 and July 2023.

He listed them as: Petroleum Licensing Round Regulations, Domestic Gas Delivery Obligations Regulations, Conversion and Renewal (Licenses and Lease) Regulations and the Nigeria Upstream Petroleum Host Communities Development Regulations.

In addition, Komolafe said other documents gazetted included the Nigeria Upstream Petroleum Measurement Regulations, Production Curtailment and Domestic Crude Oil Supply Obligation Regulations, Frontier Basin Exploration Fund Administration Regulations and Nigeria Upstream Decommissioning and Abandonment Regulations.

Also listed were the Significant Crude Oil and Gas Discovery Regulations, Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations and Nigeria Upstream Petroleum Unitisation Regulations, while many others were ready for gazetting.

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