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NUPRC not leaving Abuja as erroneously speculated

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By Ibrahim Musa

With clear mandates – ensuring compliance with petroleum laws, regulations and guidelines, monitoring of operations at drilling sites, producing wells, production platforms and flowstations, crude oil export terminals, and all pipelines carrying crude oil, and natural gas, supervising operations being carried out under licenses and leases, monitoring operations to ensure that they are in line with national goals and aspirations – the Nigerian Upstream Regulatory Commission, NUPRC, occupies a very influential position in Nigeria’s oil and gas industry.

The NUPRC also has the mandate to monitor operations to ensure that they are in line with national goals and aspirations, including those relating to Natural Gas Flare elimination & monetization, Domestic Gas Delivery Obligations and Domestic crude oil supply obligations and ensures that Health Safety& Environmental regulations conform to national and international best oil field practice.

The agency further maintains records on upstream petroleum operations, particularly on matters relating to petroleum reserves, production/exports, licenses and leases; advice Government and relevant Government agencies on technical matters and public policies while processing upstream petroleum–related applications for leases, licenses and permits as well as ensure timely and accurate payments of Rents, Royalties and other revenues due to the government from upstream petroleum operations while administering the National Data Repository (NDR).

Consequently, some persons, including politicians and analysts, who are aware of its various roles, have come to perceive the actions of NUPRC more from the realm of politics than economics. They keep a close watch on the activities in the agency and would complain about almost every development that does not fit into their pre-conceived idealism, instead of embracing realism based on purely economic considerations.

Take the latest efforts to move some personnel, especially field officers to Lagos, where many oil and gas companies have offices for example. The truth is that with the implementation of the Petroleum Industry Act, a comprehensive legislation, targeted at achieving restructuring, repositioning, increased productivity and transparency and accountability, the NUPRC inherited many personnel and its current building in Abuja from the defunct Department of Petroleum Resources, DPR. Sadly, many personnel do not have offices but work with their laptops from unsuitable locations, including conference rooms and corridors.

Meanwhile, NUPRC still bears the financial and other costs of taking them frequently to Lagos, Warri and Port Harcourt to carry out their official duties. After due consideration and in line with President Bola Tinubu’s commitment to cut costs, eliminate wastages and enhance service delivery, the Engr. Gbenga Komolafe-led NUPRC started consulting with key stakeholders, especially the labour unions. The consultation culminated in the taking of the decision, targeted at reducing pressure on accommodation in Abuja, maximizing the use of the Lagos-based office, reducing operational costs, improving organizational efficiency and enhancing industry growth.

Sadly, the decision has been unduly politicized and misconstrued to mean leaving Abuja. This constitutes a distraction to the NUPRC under the leadership of Engr. Komolafe that means so well for the industry and Nigeria as illustrated in the bold steps taken to make a positive impact in the past few years. Already, NUPRC has developed regulations, giving meaning and intent to the PIA, to ensure that all bottlenecks associated with regulatory processes are eliminated, to entrench seamless upstream petroleum operations. The gazetted regulations include: Petroleum Licensing Round Regulations 2022, Petroleum Royalty Regulations 2022, Conversion and Renewal (Licences and Lease), Nigeria Upstream Petroleum Host Communities Development Regulations 2022, Domestic Gas Delivery Obligations Regulations 2022, Nigeria Upstream Petroleum Measurement Regulations 2023, Production Curtailment and Domestic Crude supply Obligation Regulations, 2023, Frontier Basins Exploration Fund Administration Regulations, 2023, Nigeria Upstream Decommissioning and Abandonment Regulations 2023, Significant Crude Oil and Gas Discovery Regulations, 2023, Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023 and Nigeria Upstream Petroleum Unitization Regulations, 2023.

Also, the 14 draft regulations awaiting gazetting include Upstream Petroleum Fees and Rent Regulations, Acreage Management Drilling and Production Regulations, Upstream Environmental Remediation Fund Regulations, Upstream Petroleum Safety Regulations, Upstream Petroleum Environmental Regulations, Upstream Petroleum Measurement Regulations, Advance Cargo Declaration Regulations, Draft Upstream Commercial Operations Regulations, Draft upstream Petroleum Code of Conduct & Compliance Regulations, Draft Upstream Petroleum Development Contract Administration Regulations, Draft Upstream Revocation of licences and Lease Regulations, Draft Upstream Petroleum Assignment of Interest Regulations, Draft Nigerian upstream Petroleum (Administrative Harmonisation) Regulations and Draft Amendment to the Nigerian Upstream Petroleum Host Communities Development Regulations 2022.

The Commission has also held several Stakeholder Engagements on the Commission’s Draft Regulatory Framework for Energy Transition, Decarbonisation and Carbon Monetisation and incorporated the inputs arising from the engagements into the regulatory framework, which will not only govern the activities of the newly established Energy Transition and Carbon Monetisation Division of the Commission but those of the entire industry in considering Energy Transition in oil and gas field development.

Engr. Komolafe has attracted many investors expected to boost investment in the nation. The reserves report as of 1st January 2022 put the nation’s oil and condensate reserves status at 37.046 billion barrels, with a life index of 60 years, representing an increase of 0.37% compared to 36.910 billion barrels as of 1st January 2021. On the other hand, the nation’s reserves status stood at 208.62 (trillion cubic feet) TCF with a life index of 80 years, representing an increase of 1.01% compared to 206.53 TCF as of 1st January 2021.

He has taken deliberate steps to drive the Decade of Gas programme declared by the Federal Government through more aggressive development of the Nation’s huge gas resources, enhanced exploration activities, development of utilization schemes leading to gas reserves growth, increased gas production, maturation of domestic and export gas markets, in addition to gas flare elimination and commercialisation through the Nigeria Gas Flare Commercialization Program (NGFCP). Engr. Komolafe has also assisted many companies/projects to hasten development and achieve their first oil production. Some of the fields include: Anyala field (First E&P), Ikike (Total), Efe field (Newcross), Utapate, (NEPL), and Akubo Field (SEEPCo).

He contributed immensely to the funding of the Federation’s activities. In the year 2021, the total revenue generated was N2.9 trillion which signified a 44.82 per cent increase in revenue generated as compared to the 2020 figure which stood at N2.0 trillion. On the other hand, the total revenue generated in the year 2022 was N3.781 trillion, indicating an increase of 30.38 per cent.

In 2024, plans are underway to hold the licensing round in line with Section 73 of the nation’s PIA. The Engr. Komolafe-led Commission will optimise the functionality of automation systems by enhancing the efficiency of existing optimising tools and the streamlined deployment of new ones while collaborating with relevant government entities to grow oil and gas production in the best interest of all stakeholders, including investors and Nigeria.

This and other plans are targeted at increasing oil and gas production and extending foreign exchange generation for the government and other stakeholders. As Engr. Komolafe disclosed at the just-concluded Petroleum Technology Association of Nigeria (PETAN) Sub-Saharan Africa International Petroleum Exhibition and Conference in Lagos, that the operations of the agency will continue to be driven by modern technology, improved transparency in hydrocarbon measurement and accounting and collaborative work programme administration with the exploration & production companies.

Indeed, the planned movement of field officers to Lagos should be endorsed and supported by everyone as it promises to not only bring NUPRC much closer to the oil and gas companies and other stakeholders but also position the agency to operate more efficiently while minimizing cost and maximizing returns to the government and nation.

. Ibrahim Musa is a Lagos-based Energy Analyst

Energy

Kyari emphasises role of gas in driving economic growth, industrial development

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The Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPC Ltd.) Mr. Mele Kyari, has reiterated the crucial role of natural gas in fueling economic growth and industrial development in Nigeria.

Kyari spoke at the public presentation of the book “The Rise of Gas: From Gaslink to the Decade of Gas” authored by Engr. Charles A. Osezua, which highlighted gas’ global acceptance as a crucial energy source that sustains economic growth and drives industrial activities.

Represented by NNPC Ltd.’s Head of Relationship and Stakeholder Management, Mrs. Oluwakemi Olumuyiwa, the GCEO also emphasised the importance of documenting Nigeria’s gas sector.

The GCEO underscored the significance of prioritising natural gas production and supply, particularly in the context of geopolitical dynamics and energy security in the global economy.

With Nigeria boasting substantial gas reserves exceeding 200 trillion cubic feet (Tcf) and the potential to reach 600 Tcf, the GCEO said it is pertinent that Nigeria leverages the gas resource for sustainable development, energy security, and job creation.

He noted that the book aligns with the Federal Government’s “Decade of Gas” initiative, aimed at optimising Nigeria’s abundant gas reserves for both domestic consumption and international export.

Kyari added that, as a key stakeholder, NNPC Ltd. has played a leading role in advancing the “Decade of Gas” agenda through strategic investments in critical gas infrastructure such as pipelines and processing facilities.

In his remarks, the author, Engr. Charles Osezua, who described the unveiling of “The Rise of Gas” as his contribution to Nigeria’s energy literature, expressed gratitude to the NNPC Ltd. for its support towards the book launch.

Osezua said NNPC Ltd.’s participation at the occasion underscores the company’s commitment to fostering knowledge sharing and innovation within the gas industry.

Also speaking, Chairman of the Impact Investors Foundation and former Group Executive Director of NNPC, Engr. Afolabi Oladele, lauded the book for its comprehensive insights into the gas value chain, saying it will be relevant to policymakers amid the global energy transition.

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Energy

Low crude production responsible for revenue loss —PETAN

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The Petroleum Technology Association of Nigeria has claimed that the country is losing a lot of revenue daily due to its inability to ramp up crude oil production.

The Chairman of PETAN, Wole Ogunsanya, stated this in Lagos recently when the representatives of the Association of Energy Correspondents of Nigeria, led by its Chairman, Ugo Amadi, paid a courtesy visit to PETAN.

He reiterated the association’s resolve to support the efforts of the President Bola Tinubu-led administration toward increasing Nigeria’s oil and gas production for maximum value.

He said the vision of PETAN was to support the authorities to ensure that all the values existing in the oil industry stay in Nigeria.

According to Ogunsanya, if Nigeria could retain between 60 and 70 percent of the oil and gas value chain in the country, it stands a better chance of being among the top 20 economies in the world.

He expressed concerns that Nigeria was losing a lot due to its inability to produce up to its oil production capacity.

He pointed out that the country was underproducing to the tune of at least 500,000 barrels per day, which he said was a huge loss to the country.

The PETAN leader maintained that such losses would not have been possible if there had been full in-country retention of values and beneficiation across all the chains of the industry.

He explained, “Essentially, if Nigerian organisations are involved in taking that oil out, taking it to a refinery owned by Nigerians and refining it, if we have petrochemicals refining the gas and the product, we are taking that gas; processing it in power plants; and running pipelines to connect all those power plants. This country will be among the top 20 economies in the world.

“And we believe very strongly that there is no better prescription for Nigeria’s economic solution than that.”

Reiterating PETAN’s commitment to support the retention of those values, he acknowledged the Presidency’s high interest in increasing production.

He pointed out that the Presidency had given the directives and formulated a lot of gazettes, stating that PETAN aligned with those initiatives.

Ogunsanya further said, “Our intention is to support this government, and this country to increase the production of oil and gas. I presented this vision to the whole house of PETAN exactly a week ago and the vision is very clear. PETAN wants to support Nigeria through innovative means to increase the production of oil and gas in this country.”

He acknowledged the challenges facing the industry in Nigeria, including funding, logistics and others.

He noted that his association cannot make progress with some of its plans without collaborating with energy correspondents.

“We cannot do without you. Our message cannot resonate and cannot get across without your partnership with us.

“Essentially, we both need each other. PETAN needs you to tell that story, to sell what our vision is to help the situation we find ourselves in. We are going to support you as PETAN, as we have done in the past. I give you that assurance, we will work with you immediately,” he told the NAEC representatives.

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Energy

High tariff will lead to electricity theft — FCT residents tell FG

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Some electricity consumers in the Federal Capital Territory (FCT) have appealed to the Federal Government to review the new tariff  downwards to avoid electricity theft.

Some of the consumers who are mainly business owners  told journalists on Wednesday that if the cost of electricity remained high some of them consumers might bye-passing their meters.

Recall the Nigerian Electricity Regulatory Commission (NERC) had announced an increase in electricity tariff paid by Band A customers from N68/KWh to N225/KWh.

Band A customers are those who enjoy electricity supply for at least 20 hours per day.

The consumers, mainly printers, who do operate mainly at UTC and Murg Plaza in Area 10, FCT said that they use heavy equipment in doing their jobs hence their electricity consumption is high.

According to them, if they have to pay N225/KWh this will greatly affect their jobs making it difficult for them to cope with the present economic situation in the country.

Mr Amos Okolo, a printer, said that it was good that the government plans to give them 20 hours of electricity in the new tariff but the cost is too high for any business person.

Okolo said that by the time he purchases electricity with the huge money, nothing would be left in his business to cater for his family.

“I am appealing to the government to review the tariff downward as such increase can lead to some consumers bye-passing their meters and this is not good for Abuja Electricity Distribution Company (AEDC),”he said.

On his part, Mr Samuel Kolawole, also a printer, said that the cost indicated in the new tariff was so high that it could negatively impact businesses.

He said that the government should try and reduce the tariff so that it can benefit the rich and the poor people.

According to him, 20 hours of electricity is good for business owners as this will reduce the cost of buying fuel or diesel for generators but the pricing should be business friendly.

“We are appealing to the government to reduce the tariff to what we can afford so as to benefit everyone,” he said.

Also speaking on the issue, Mr Abel Ajibola, also a graphic designer at Murg Plaza said that the government means well for the people but the new tariff is outrageous, especially for small business owners.

Ajibola said that he would be glad if the government could review the tariff so that electricity consumers would not be tempted to start stealing electricity.

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