The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has urged new oil block owners to strengthen their technical capacity and operational structures to avoid the difficulties experienced by previous operators of the oil assets.
The Commission Chief Executive, Oritsemeyiwa Eyesan, gave the advice at the maiden onboarding workshop for holders of Petroleum Prospecting Licences (PPLs), where she highlighted the challenges faced by some operators who acquired oil assets without fully understanding the requirements of running an oil and gas business.
Eyesan drew on experiences from the 2010 to 2012 divestments and earlier marginal field operations, noting that while some operators successfully increased production from assets they acquired, others later struggled to sustain output.
She attributed some of the difficulties to gaps in operators’ understanding of the specialised nature of the oil and gas business, explaining that meeting financial obligations alone was not enough to establish a properly functioning operation.
She cited an instance involving an oil and gas company whose accounting was handled using an Excel spreadsheet, illustrating some of the operational shortcomings she encountered while working in the industry.
According to her, the new licence holders need to understand that managing an asset as its owner comes with different responsibilities from working within an existing operating structure.
The commission organised the two-day workshop to familiarise the PPL holders with the upstream petroleum value chain, regulatory requirements, the process of engaging with the regulator and the responsibilities associated with operating their assets.
Eyesan said the commission was also working to improve regulatory efficiency and make its processes more predictable for operators.
She identified the approval of Field Development Plans (FDPs) as one area where processing times had improved, noting that some applications that previously took much longer were now being approved within weeks.
However, she acknowledged that the commission still needed to improve its response times to industry concerns and said efforts were underway to address the gaps before the end of the year.
Eyesan also encouraged the new licence holders to participate in industry associations, including the Oil Producers Trade Section (OPTS) and the Independent Petroleum Producers Group (IPPG), to learn from other operators and address common industry challenges.
She said the commission expected more than half of the 22 PPL awardees to achieve first oil within two years, while expressing the expectation that they would proceed to drill their second wells within three to four years.
The acommission Chief Executive urged the awardees to make use of the knowledge shared during the workshop as they work towards developing their assets and commencing production.
