Nigeria Commences Third Round of Regulations, Moves to Ensure Transparency in Oil Measurement

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Monday began the stakeholders’ consultation on its third round of regulations under the Petroleum Industry Act (PIA), with five new introductions essentially meant to ensure more transparency in the sector.

The new regulations included: The Upstream Petroleum Measurement Regulations, Advance Cargo Declaration Regulations as well as Significant Discovery Regulations.

Other newly-introduced regulations were: Gas Flaring, Venting and Methane Emissions (Prevention of waste and Pollutions) Regulations as well as the Domestic Crude Oil Supply Obligation Regulation.

Those present at the event included the Oil Producers Trade Section of the Lagos Chambers of Commerce, the Independent Petroleum Producers Association, chief executive officers of International Oil Companies (IOCs) and chief executive officers of indigenous operators.

Speaking at the event in Abuja, the NUPRC Chief Executive, Mr. Gbenga Komolafe, stated that the stakeholders’ meeting was part of the commission’s commitment to creating an enabling environment for growth and investments in the upstream oil and gas industry in Nigeria.

Represented by the Executive Commissioner, Development and Production, Dr. Habib Nuhu, Komolafe said five of the new regulations have now been officially gazetted while six at an advanced stage.

He noted that 13 draft regulations were presented for discussion during the phase one and two of the consultations with stakeholders last year.

Komolafe listed the regulations as the Nigeria Upstream Petroleum Host Communities Development Regulations, Royalty Regulations and the Domestic Gas Delivery Obligation Regulations. Other regulations churned out by the commission, he said, were the Nigeria Conversion & Renewal (Licence and Lease) Regulations, Petroleum Licensing Round Regulations, Upstream Petroleum Fees and Rents Regulations  as well as Upstream Decommissioning and Abandonment Regulations.

Furthermore, he listed the Unitisation Regulations, Acreage Management (Drilling & Production) Regulations, Frontier Exploration Fund Administration Regulations, Upstream Environmental Remediation Fund Regulations, Upstream Petroleum Safety Regulations and Upstream Petroleum Environmental Regulations as other regulations where stakeholders’ feedback had already been obtained.

“The inputs of the stakeholders from the engagement were incorporated, where necessary, in the draft regulations. Thereafter, the regulations were forwarded to the Honourable Attorney General of the Federation and Minister of Justice for vetting, legislative standardisation, and approval.

“I am happy to inform you that five of these regulations, the Nigeria Upstream Petroleum Host Community Development Trust regulations, Royalty Regulations, Domestic Gas Delivery Obligation Regulations, Nigeria Conversion & Renewal Regulations and Petroleum Licensing Round Regulations have been gazetted while the remaining six have been finalised and ready for gazetting,” he stressed.

He reiterated that the process of formulating the regulations had been a rigorous and strenuous exercise and were products of critical thinking and evaluation by the commission’s regulation development team and the Presidential Implementation Committee on PIA.

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

According to him, the current phase of the regulations development is by no means a final or exhaustive one in the commission’s drive to support the upstream industry operators.

“The Commission will continue to embark on programmes and policies that will create enabling environment for growth and more investments in the Nigerian upstream oil and gas sector,” he added.

Komolafe added that the commission has no intention to bring incremental fiscal burden on operators which will erode its commitment to business growth, maintaining that the regulations will support the sector to have visibility on production systems.

In his remarks at the event, Executive Commissioner, Economic Regulation & Strategic Planning, NUPRC, Kelechi Ofoegbu, noted that the new regulations would ensure transparent measurement of Nigeria’s hydrocarbons.

According to him, it would also lay the necessary framework in standardisation of the processes involved in upgrading hydrocarbons measurements in alignment with international best practices.

Ofoegbu stated that it would further help operationalise the PIA, ensure accurate measurement of Nigeria’s oil and gas with proper calibration of LACT machines, similar to what happens with power consumption meters.

“It will give us the capacity and the capability to monitor upstream production from beginning to the end and ensure transparency in the loading process.

“We complain about crude theft. It is stolen and it makes its way to the international market. But how is that possible? These regulations will help us understand the DNA of every vessel coming into our shores to load crude,” he explained.

Emmanuel Addeh in Abuja

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