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Tag: NUPRC

  • 40% of crude loses due to measurement inaccuracies – NUPRC

    40% of crude loses due to measurement inaccuracies – NUPRC

    Approximately 40% of the volumes credited to crude losses in the Nigerian petroleum industry are actually attributable to measurement inaccuracies and not theft as often reported.

    The Chief Executive of the Nigerian Upstream Regulatory Commission (NUPRC), Engr Gbenga Komolafe stated this in Lagos at the Petroleum Club Quarterly Dinner, said the revelation followed a forensic audit conducted by the Commission covering the period January 2020 to November 2022 on crude theft numbers. The audit was to ascertain with accuracy the stolen volume of crude oil within the reference period. 

    Delivering a speech on “Nigerian upstream petroleum sector: value optimization, energy transition and regulatory perspectives”, Engr. Komolafe said the Commission is committed to dealing with the issue of metering errors by ensuring that Original Equipment Manufacturers (OEMs) licensed directly as agents of the Commission will be responsible for deployment and maintenance of metering facilities across the Nigeria’s oil and gas facilities, for transparency in hydrocarbon accounting. 

    The reform measure adopted by the Commission offers a paradigm shift from the trajectory in Nigeria’s hydrocarbon measurement since oil was discovered in Nigeria in Oloibiri in 1956; and is aimed at ensuring that no one becomes a judge in his own case.

    Admittedly, one major area of value erosion in the industry is the menace of crude oil theft. Our records indicate that the menace of oil theft has negatively impacted the oil and gas sector for about two decades with attendant huge financial losses to our nation. The Commission, in collaboration with the various arms of the Security forces, the NNPC Limited and the host communities, have been able to suppress the ugly trend of hydrocarbon value decimation. Now, our nation has continued to record good dividends of these collaborative efforts as production figures are progressively increasing. The January 2023 volume is approximately 1.5 million barrels per day of oil and condensates. It is expected that this number will continue to increase as further measures are introduced and sustained to remove all illegal connections that aid crude oil theft.

    Currently, Nigeria is flaring about 10% of gas produced, a feature the Commission is also determined to eliminate through the on-going Gas Flare Commercialization Programme (GFCP). Nigeria produces about 8BSCF/D of gas, out of which approximately 20% is delivered to the domestic market, approximately 40% is exported to international markets, 30% is utilised for producer’s internal consumption and the excess gas is flared.

    In alignment with our objectives, as outline in Section 6 of the Petroleum Industry Act, the Commission is diligently pursuing the basic regulatory goals which include: increasing Nigeria’s oil and gas reserves and production, developing a transparent approach to hydrocarbon accounting, and attaining operational efficiency and effectiveness in industry operations. 

    In addition, the Commission is committed to facilitating peace and harmony in the host communities to guarantee conducive operating environment for investors, positively impacting on operating cost and attracting more investment opportunities. Komolafe outlined the measures undertaken by the Commission. Excerpts:

    Strategic Actions for Hydrocarbon Value Optimization

    In keeping with industry laws and regulations, the Commission has issued a licensing round guideline and published a licensing round plan for a total of seven open blocks (300-DO, 301-DO, 302-DO, 303-DO, 304-DO, 305-DO & 306-DO). We are currently evaluating the Expression of Interest (EOI) received from prospective investors. The exercise is indeed expected to be a huge success for Nigeria and a big step towards growing the nation’s oil and gas reserves. This will be done through aggressive exploration and development efforts. 

    Also, as part of our strategy for value optimization and increased production from our national oil and gas reserves, the Commission has focused on regulatory initiative aimed at reviving declining wells through enhanced oil recovery approach. We are working with operators to identify candidate wells and appropriate interventions that would lead to increased production.

    In addition, the Commission is focusing on shut-in wells which can be revived. In pursuance of this, The Commission inaugurated a committee on June 23, 2022, to conduct industry-wide study on reactivation of Shut-in strings. The committee has submitted its report, and includes recommendations categorised into Quick Wins, Medium and Long-Term initiatives that will enhance national oil and gas production volumes.

    Findings from the report revealed that over 900,000 barrels of oil per day can be earned from the quick win interventions while the medium and long-term initiatives could potentially add 1.2 million barrels of oil per day if properly and fully implemented. The total number of strings that need to be revived is also known and we have commenced engagement with the relevant operators to operationalize the initiative.

    We have also completed the 2020 Marginal Field Bid Round and issued fifty (50) Petroleum Prospecting Licenses (PPLs) to deserving awardees. It is expected that with the existing discoveries in the awarded fields, early Field Development Plan (FDP) would be pursued by the awardees leading to incremental oil and gas production. On its part, the Commission is facilitating timely approvals for expedited re-entry and early production. The estimated incremental production from the awarded fields is approximately 58,000 bpd and 87mmscf/d.

    In the short/medium term, we expect an estimated incremental volume of 461,000bpd and 565mmscf/d from new wells and well re-entry. In the long term we expect an estimated incremental volume of 162,000bpd and 868mmscf/d from FDPs which have been approved and are at various stages of execution.

    Implementation of Host Community Provisions under Section 235 of PIA

    Section 235 of the PIA 2021 saddles the Commission with the responsibility of ensuring conducive and peaceful relationship among stakeholders within the Host Community through the implementation of the Host Communities Development Trust.

    The Commission, in collaboration with the relevant stakeholders, has developed templates and gazetted regulations, which includes that of the Host Community Development Trust (HCDT). The essence of the HCDT is to integrate oil bearing communities into the value chain and effectively cater for the development needs of impacted communities, thus positively curbing restiveness in such communities and offering enabling environment for operators to thrive. This is expected to guarantee seamless operation, boost investor confidence, and provide enabling environment for sustainable development of the country’s hydrocarbon resources. We are happy to disclose that over 60 Host Community Development Trust have been approved by the Commission. This is indeed a milestone in the implementation of the PIA, 2021.

    FDP Budget, Cost Monitoring and Benchmarking

    Our strategic thrust is to ensure that all our interventions as regulator translate into significant reduction in the cost of doing business in the upstream petroleum industry. In addition to these measures, Section 8 of the petroleum act mandates the Commission to undertake the commercial regulation of the operations of the industry as well as develop cost studies and benchmarks for the evaluation of upstream petroleum operations.

    The focus on cost reduction as it relates to unit operating cost (UOC) stems from a comparative analysis of other jurisdictions, with a view to determining where we want to be. Our current UOC ranges from $15 (deep offshore) to $25 (onshore/shallow waters). It is obvious that Nigeria needs to improve its cost efficiency.

    Development of priority regulations as tool for sanity and predictability – Section 216

    The Commission is committed to creating enabling and predictable regulatory environment via the development of regulations that will give meaning and intent to the PIA 2021. In view of that, some priority regulations for the upstream petroleum sector have been developed by the Commission within its short existence. The Act also provides for a consultative forum to be held for the concurrence and input from all stakeholders in the upstream petroleum operations before the finalization of regulations. Five (5) of the regulations have been completed and gazetted while thirteen (13) other draft regulations have been reviewed with stakeholders and awaiting gazetting.

    INITIATIVES TO ENHANCE GAS PRODUCTION

    In line with the Federal Government’s declaration of the period 2021 – 2030 as the Decade of Gas, the Commission is taking steps to expand and develop the Nation’s huge gas resources through enhanced gas exploration, development and utilization schemes. This will ultimately lead to gas reserves’ growth, increased gas production, maturation of domestic and export gas market, as well as gas flare elimination.

    Furthermore, in the face of the global energy transition and the need for cleaner sources of energy, gas is being positioned as our immediate transition fuel to lower the Nation’s carbon emission footprint in line with our climate change commitment.

    Climate action plan in FDPs and operations

    Our commitment to the various climate agreements places a demand on us all to keep global temperature rise within 1.5 °C – 2.0 °C of pre-industrial levels. The implication of this for Nigeria’s oil and gas industry are far-reaching. The need to decarbonise our production facilities not only requires the right policy direction but also demands adequate measurement of all greenhouse gas (GHG) emissions to ensure we achieve our net-zero target by 2060.

    The Commission supported the review and assessment of the national GHG emissions as part of series of workshops that led to revision of the Nationally Determined Contributions (NDCs) policy submitted to the United Nations Framework Convention on Climate Change (UNFCCC) ahead of the 26th Conference of Parties (COP26) summit in Glasgow, Scotland 2021. Fugitive methane emission reduction target (60%) from Oil & Gas was added to Nigeria’s NDC for the first time based on robust data provided by the NUPRC.

    The development of guidelines on the management of fugitive methane and GHG emissions in the upstream sector that will drive emission reduction and mitigations targets of the National Determined Contributions (NDCs) has been approved and is being operationalized. The Commission is currently engaging the International Finance Corporation (IFC) on opportunities surrounding Carbon Capture Utilisation and Storage and development of national framework on CCUS.

    We look forward to a more collaborative working relationship with the operators in the industry for value optimization. Such collaborative aspirations would target unlocking the huge potentials we have as a nation in the Deep Play prospects, Frontier Basins and the Deep Offshore environments.

    We would also be leveraging on technology to achieve our mandates by ensuring all our processes become fully automated and more transparent in line with the prescriptions of the PIA. Furthermore, relevant guidelines that will provide clarity on every aspect of oil and gas operations will be issued by the Commission in keeping with our core values.

    Signed:

    Engr. Gbenga Komolafe, FNSE

    Commission Chief Executive

    February 17, 2023

  • NUPRC announces Nigeria Mini Bid Round 2022

    NUPRC announces Nigeria Mini Bid Round 2022

     

    The Nigeria, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced the Mini Bid Round 2022.

    TheNewsGuru.com, (TNG) reports this was contained in a statement issued and signed by the commission’s Chief Executive Officer, CEO Engr. Gbenga Komolafe, stating that:

    “The Mini Bid Round is an opportunity to spur new exploration and drilling activities in the prospective deep waters offshore Nigeria.

    “The Mini Bid Round is the first in a series of bid rounds, aimed at further development of this prospective petroleum basin will be held in accordance with the Petroleum Industry Act 2021 (PIA), with its enhanced legal and regulatory frameworks that seeks to encourage new investors and investments into the next phase of exploration in this region.

    “The Mini Bid Round will be managed by the NUPRC, in line with the provisions of the PIA, as the statutory body responsible for ensuring compliance with petroleum laws regulations, and guidelines in the Nigerian upstream petroleum industry.

    “The National Data Repository (NDR) of NUPRC and our multi-client partners are delighted and ready to support the Mini Bid Round underpinned by high-quality datasets. The blocks have extensive 2D and 3D seismic data coverage, including multi-beam and analog data.

    ” Additionally, a remarkable quality, 3D MegaSurveyPlus reprocessed Pre-stack Time Migration (completed October 2022), with angle stacks and gathers is also available to prospective bidders. Links to all data can be accessed via the dedicated NUPRC portal.

    “The Mini Bid Round is a market-driven programme and will follow a transparent and competitive procurement process designed to attract competent third-party investors from across the world that have the capability and proficiency in operating in deep-water environment.

    “Historically, this Mini Bid Round intends to build on the successes of the last bid round that held in April 2007 during which a total of forty-five (45) blocks, drawn from the inland Basins of Anambra, Benue and Chad; the Niger Delta Continental Shelf; Onshore Niger Delta and Deep Offshore were put on offer.

    “The 2007 bid round was held under a different regulatory regime (the Petroleum Act, 1969) and generated massive interest and participation with its attended revenue which made the exercise a success.

    “In this year Mini Bid Round, seven (7) Offshore blocks covering an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m is put on offer.

    “The success of the Mini Bid Round will ensure all stakeholders gain value from the country’s resources, whilst paying close attention to reduction in carbon emissions, as well as overall environmental, social and governance (ESG) considerations.

    “A dedicated programme portal (br.nuprc.gov.ng) for the Mini Bid Round has been published by NUPRC, which provides details of the bid round process, including the registration and prequalification requirements, and detailed guidelines for applicants.

    “A pre-bid conference is scheduled for 16th Jan 2023, to provide potential applicants with an opportunity to ask questions they may have concerning the Mini Bid Round process and requirements, after which interested companies will be invited to submit their pre-qualification applications by 31st Jan 2023. NUPRC will continue to provide further details and roadmap for this international competitive Mini Bid Round in due course.

    “It is a great privilege to announce the Mini Bid Round 2022 and we look forward to the success of the upcoming events and activities.

  • Giant strides in Nigeria’s oil and gas sector excite stakeholders

    Giant strides in Nigeria’s oil and gas sector excite stakeholders

    President Muhammadu Buhari has drawn accolades from stakeholders in the oil and gas sector of the Nigerian economy for the giant strides recorded in the industry.

    The stakeholders expressed satisfaction with the way President Buhari has handled his role as the Minister of Petroleum resources.

    They hailed the president for not stifling the independence and corporate authority of the agencies and institutions that he is supervising with overbearing presidential power.

    Similarly, the industry watchers commended the Nigerian National Petroleum Corporation (NNPC) Limited and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for providing stability in the sector, especially since the coming onstream of the Petroleum Industry Act 2021.

    They listed several silver linings in the industry of late while highlighting the three massive efforts that have resulted in the turnaround of fortunes for the sector.

    First, is the resolution of the long-running ADDAX Petroleum saga. Second is the resolution of the ill-fated Seplat Oil purported purchase of EXXONMOBIL Nigeria Ltd, and the award of Oil Blocks OPLs 321 and 323 to NJ Exploration Ltd, a subsidiary of NUEL OJEI Holdings Ltd, after over 17 years of legal, corporate and political back and forth.

    Recall ADDAX Petroleum recently exited four Nigerian oil blocks: OMLs 123/124 and 126/127, amicably with the signing of a Memorandum of Understanding (MOU) on the Transfer, Settlement, and Exit Agreement (TSEA) by which the long-drawn disputes on the blocks operated by ADDAX was formally resolved and thus charting a course for much-needed investment and growth on the oil blocks.

    With this new setup, ADDAX has ceased as the Production Sharing Contract (PSC) contractor for the asset. In the same vein the NUPRC’s voiding of the purported purchase of EXXONMOBIL Nig Ltd by Seplat Oil, an action that President Buhari ultimately backed, acceded to the professional and technical advice of the regulators, industry and corporate players and critical stakeholders.

    But by far the biggest breath of fresh air in the oil and gas sector in recent times is President Buhari’s approval of the NUPRC re-award of OPLs 321 and 323 to NJ Exploration Limited, a subsidiary of NUEL OJEI Holdings Ltd – under a PIA guaranteed Sole Risk Arrangement.

    This award, the stakeholders believe, will galvanize NJ Exploration Ltd into reaching out to the Korean National Oil Corporation (KNOC), in the spirit of their long-standing relationship as well as other credible local and international players to partner with it to explore and develop the fields.

    Intriguingly, they noted that it took NJ Exploration Ltd 17 years to re-acquire the oil blocks first awarded to KNOC, its strategic partners, during the 2005 bid round under President Obasanjo.

    In 2009, the Federal Government headed by the late President Musa Yar’Ardua had voided the award and re-awarded it to ONGC-Videsh, which also participated in the 2005 bid round.

    KNOC ultimately resolved to go to court to reclaim what it felt rightly belonged to it. With the Supreme Court judgement of 2017, the coast became clear for the recommencement of exploration and development work on the blocks.

    The hope is that NJ Exploration Ltd, which has demonstrated uncommon resilience and strength of character in this over 17 years ordeal, should regard this golden opportunity as a basis of getting KNOC and other well-established global leaders in the industry back into the deal, and speedily engaging with the technical and logistic requirements for timely exploration and development of the blocks.

    Critical stakeholders in the industry are thus hopeful that fixing the mess in the oil and gas sector, a process already jumpstarted with the coming onstream of the PIA, would be further stimulated and accelerated by the resolution of the ADDAX petroleum and EXXON MOBIL saga and the re-award of Oil Blocks 321 and 323 to NJ Exploration Ltd 17 years after its successful participation in the 2005 bid round.

  • Petroleum upstream commission moves to enhance national crude oil production

    Petroleum upstream commission moves to enhance national crude oil production

    The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has expressed determination to take bold and revolutionary steps, using a non-kinetic approach, to address the challenges of crude oil theft, improve national crude oil production and save the country’s economy from further degeneration.

    This was contained in a statement released on Tuesday by Gbenga Komolafe, the Commission’s Chief Executive. He stated that although NUPRC is not an operator/producer, it has a statutory responsibility as a regulator to probe into the situation and seek drastic solutions to the challenges as the current situation has seriously affected the country’s economy and posed a huge challenge to the funding of the national budgets.

    The statement reads: “The Commission will do everything within its authority to challenge the narrative and halt further degeneration by ensuring transparency in hydrocarbon accounting.

    “One of the steps, in line with its technical and regulatory powers, is to probe into the operational and commercial activities of exploration and production companies operating within the country to ascertain the level of compliance with the terms and conditions in their operational contracts, as well as the challenges impeding expected deliveries.

    “The Commission will particularly be interested in the mode of operation of the companies in relation to the approvals as per their operational licences, the level of conformity with the technical provisions and production terms,  their level of investments to enhance capacity utilization, and the challenges they are facing, especially those contributing to the current unacceptable situation.

    “Beginning Wednesday September 28, the Commission will be engaging all the exploration and production companies individually to get to the root of the current situation as it believes strongly that there might be more fundamental issues in the industry affecting expected output and deliveries beyond the much touted issue of crude theft.

    “Already invitations have been extended to all the operators for the  engagement during which they would be expected to present their work programme performance, acreage status, divestment plans (if any), field development plan (FDP) implementation status, Upstream investment in the last five years, exploration activities including geophysical acquisition/processing/re.processing, leads and prospects maturation plans; and exploratory wells drilled in the last five years.

    “Also during the engagements, the companies would be required to present their reserve status; life index, current reserves replacement ratio (RRR) and reserves growth strategy (RGS); status of Joint Venture/Production Sharing Contract activities, including ongoing facility projects, number of drilled wells, re-entry applications and approvals grafted in the past five years; shut-in wells, their potentials and reactivation plan(s) and expected incremental volumes; technical allowable/production performance and production optimization strategy, including production profile for the last ten years; status of production facilities, as well as unit technical cost of production on field basis.

    “The Commission would also insist on knowing their gas development strategy, gas reserves commitment status and domestic gas delivery obligation performance; status of utilization activities (if any); crude oil evacuation route and exported volumes from January this year, status of statutory payments as well as the challenges they are facing in the course of their operations.

    “The move by the Commission is to ensure transparency and accountability in the industry to guarantee effective operation and output delivery in the interest of the country’s economy and the benefit of the investors and industry operators”.

  • Gas leak in Sangama Community caused by suspected oil thieves, NUPRC report reveals

    Gas leak in Sangama Community caused by suspected oil thieves, NUPRC report reveals

    The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said its report after investigating the reported gas leak in Sangama Community of Bonny Local Government Area of Rivers State revealed that it was caused by suspected vandals and thieves.

    This is contained in a press statement signed by the commission’s executive, Gbenga Komolafe, a copy of which was made available to TheNewsGuru.

    According to the statement, a Joint Investigation Visit (JIV) was carried out on September 11, by a team from NUPRC, National Oil Spill Detection and Response Agency (NOSDRA), Rivers State Ministry of Environment as well as Community representatives with the Nigerian Police Force (NPF) upon receipt of a notification to the development.

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    The statement reads in parts, “The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) been notified of a gas leak incident on the Nigerian Petroleum Development Company’s (NPDC), Well 6, in Sangama community, Bonny Local Government Area of Rivers State. Efforts are being made alongside other relevant agencies to deal with the situation.

    “The incident which was reportedly observed on September 3, 2022 at about 13:30 hours, was reported by the Nigerian National Petroleum Company Exploration & Production Limited (NNPC E&P LTD) on September 9, 2022.

    “A Joint Investigation Visit (JIV) was carried out on September 11, by a team from NUPRC, National Oil Spill Detection and Response Agency (NOSDRA), Rivers State Ministry of Environment as well as Community representatives with the Nigerian Police Force (NPF) in attendance.

    “During the JIV, the team observed gas leak from one of the valves on the well head. A closer look revealed that the Anode valve on the well head had been tampered with. It was adjudged by the regulators to have been caused by third party interference.”

    The statement said the community had a disagreement with the regukatira, hence their refusal to sign the investigation report.

    “However, the community did not agree with the regulators and as a result would not sign the joint investigation report in spite of the technical explanation by the team. This prompted the team to reconvene on September 15, 2022 when, after an extensive discussion, all stakeholders eventually signed the incident report.

    “Efforts are on-going to prevent further leakage, repair the damage and ensure that the development does not in any way affect the health and social lives of the people of the area and does not negatively impact the environment,” it concluded.

  • NUPRC inaugurates team to drive FG’s flare gas commercialisation programme

    NUPRC inaugurates team to drive FG’s flare gas commercialisation programme

    The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) at the weekend inaugurated a 12-member Flare Gas Commercialisation Programme Team whose responsibility will be to drive the process and coordinate the Flare Gas Commercialisation Programme towards the Federal Government’s initiative to end gas flaring by 2025.

    Gas flaring in the oil and gas industry has continued to be a menace which needs to be eradicated because of its adverse effect on the environment and the people. The wasteful disposal of natural gas is not only fraught with serious health/environmental consequences but is also a major resource waste and value erosion to the country.

    Against this backdrop, the Federal Government declared the period 2021 to 2030 as the “Decade of Gas”, a period within which the nation must shift focus from oil-centred exploitation to gas driven industrial development.

    Even though the World Bank has set 2030 as the target year to end gas flaring, Nigeria has not only set a country deadline for 2025, President Muhammadu Buhari made a commitment towards the Paris Agreement during the COP26 Leaders’ Summit to achieve Net Zero carbon emissions by 2060.

    In 2016, the Federal Government initiated the Nigerian Gas Flare Commercialisation Programme (NGFCP) to end flaring of natural gas by oil companies operating in the country. Although the initiative was well-received by stakeholders and industry watchers, unforeseen constraints truncated its execution.

    At the inauguration of the Flare Gas Commercialisation Programme Team in Abuja at the weekend, NUPRC’s Chief Executive, Engr. Gbenga Komolafe, stated that monetising gas resources is a positive step towards guaranteeing energy security, especially in the global energy transition period. He said as a nation, Nigeria must ensure that it harnesses all available gas resources for value creation.

    He announced that NUPRC is recommencing the process of issuing flare sites to technically competent companies, following a competitive bid process. This process has become crucial in view of the policy direction of the Federal Government to ensure all gas resources are developed for National development.

    The Commission is currently carrying out a study in conjunction with external technical resources to identify suitable flare sites for the auction process. It was for the purpose that the committee of staff of the Commission was inaugurated to drive the process and coordinate implementation of the programme.

    The steering committee members are K.O. Ofoegbu and O.I. Anyanechi; while A.T. Adeyiga, J.O. Ogunsola, J.C. Anyanwu, A.O. Okwah, O.E. Oje, N.E. Odega, K. R. Abisoye, J. C. Echendu, C. I. Chukwukaelo and G. L. Umoru form the programme team.

    The committee is expected to carry out its mandate bearing in mind the over-arching significance of the programme to the socio-economic well-being of the nation.

    The Chief Executive appreciated the support from the USTDA, USAID and other stakeholders and reiterated the Commission’s commitment towards ensuring that the programme is expeditiously executed. The inauguration was witnessed by a delegation from USAID comprising Mr Oladiran Adesua, Jennifer Ifeanyi Okoro and Andrew Smith.

  • NNPC Ltd launches crude theft monitoring applications

    NNPC Ltd launches crude theft monitoring applications

    The Nigerian National Petroleum Company Limited (NNPC Ltd.) on Friday launched  ‘Crude Theft Monitoring Applications’ to curb oil theft and pipeline vandalism.

    The launch held in Abuja on the sideline of the signing of renewed Production Sharing Contracts (PSCs) agreements between NNPC and its partners in Oil Mining Leases.

    The portal with the address ‘stopcrudetheft.com’ could also be accessed through a mobile phone.

    The portal has application options for reporting incidences, with prompt follow up and responses and another one for crude sales documents validation.

    Speaking during the launch, Malam Mele Kyari, Group Chief Executive Officer (GCEO), NNPC Ltd. said ”vandals’ actions on pipelines became a difficult thing to deal with, but it engaged partners to ensure that it responded to the situation.”

    According to the GCEO, there was involvement of government regulatory bodies, security agencies and host communities while it put up a robust framework to curtail the menace.

    “There are still ongoing activities of oil thieves and vandals on our pipelines and assets, very visible in the form of illegal refineries that are continuously put up in some locations and insertions into our pipeline network.

    “Arrests have been made and vessels have been arrested by Nigerian Navy, I commend the Armed forces, in the last three months, they have done substantive work and had destroyed some illegal refineries,” he said.

    Kyari said international refineries where the stolen crude could be taken to had obligations to ensure they bought Nigerian crude from credible sources which could be validated.

    He said, ”if they refused to do that, they would be held responsible as part of the culprits involved.”

    He explained that the platforms were created for members of the communities and other Nigerians to report incidences of theft and be rewarded.

    Kyari urged that on the international arena, companies must report suspicious sale.

    He further said,”every product that left the country must have a unique registration number by the NNPC and validated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

    “Ahead of this, we are also creating a platform where end-users, particularly refiners and traders can validate the product.

    “We cannot do this without international collaboration. It is impossible for any refinery to take a crude they do not know the source, refineries are designed to process certain specific grade of crude.

    “It is their duty to ensure that they validate this, because we have unique number of every crude that leaves this country,” he said.

    The GCEO, while stating that it has a total coordination process now, said it had a line of sites around all marine movement in the country and had created a functional platform.

    “We have visibility around everyone’s operations and the Economic and Financial Crime Commission (EFCC) is following everyone related to those transactions.

    “Wherever there is massive movement of cash, EFCC will follow the person, we believe that the combination of all these will get us back to normalcy,” he said.

  • Status quo remains in share sale by ExxonMobil to Seplat energy – NUPRC

    Status quo remains in share sale by ExxonMobil to Seplat energy – NUPRC

    The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) jas affirmed that status quo remains in respect to ExxonMobil/Seplat Energy share acquisition.

    Mr Gbenga Komolafe, Commission Chief Executive (CCE), NUPRC made this known in a statement on Monday in Abuja.

    President Muhammadu Buhari on Monday, consented to the acquisition of ExxonMobil shares in the U.S.A by Seplat Energy Offshore Limited.

    Responding to media enquiries on latest development about the transaction, Komolafe clarified that NUPRC, in line with provisions of the Petroleum Industry Act 2021 was the sole regulator in dealing with such matters in Nigerian upstream sector.

    He said as it were, the issue at stake was purely a regulatory matter and the commission had earlier communicated the decline of Ministerial Assent to ExxonMobil in this regard.

    The CCE said as such the Commission further affirmed that the status quo remained.

    “That position remains the status quo and to the best of our knowledge as a regulator nothing has changed.

    “The Commission is committed to ensuring predictable and conducive regulatory environment at all times in the Nigerian upstream sector,” he said.

  • FG moves to tackle crude oil theft

    FG moves to tackle crude oil theft

    The Federal Government through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says it has developed key initiatives aimed at reducing to the barest minimum activities of crude oil theft and illegal artisanal refining.

    Engr Gbenga Komolafe, Chief Executive Officer, NUPRC, made this known at the Lagos Chamber of Commerce and Industry (LCCI) Public Private – Dialogue on Crude Oil Theft and Artisanal Modular Refineries on Thursday in Lagos.

    Komolafe said that an unprecedented level of theft estimated at a daily average of 103,000 barrels which was recorded in 2021 had grown to 120,000 barrels in first quarter of 2022.

    He added that daily average production in 2021stood at 1.5 million barrels while the national production advised by the commission was 2.2 million barrels.

    “Consequently, only 58 per cent of the technical rate was achieved in 2021 and similar performance has continued in 2022 hence the need for more concerted efforts across all quarters to stem the tide.

    “Unfortunately, the amount of oil received at the terminals indicates that over nine million barrels of oil is lost to crude oil theft amounting to a loss of one billion dollars in first quarter of 2022,” he said.

    Komolafe said that the effect from this level of theft had resulted in the declaration of force majeure, shortage of wealth, a hostile, unsafe environment and was a disincentive to investors in the Nigerian upstream sector.

    He added that many operators had deliberately shut down facilities and pipelines which had further aggravated the low oil production also impacting gas production both for domestic utilisation and exports.

    He said that in view of the development and the ongoing government’s efforts to enable the industry deliver production target of three million barrels daily in three years, the commission has developed some key initiatives.

    Komofale said that the initiatives were aimed at mitigating oil theft and creating enabling regulatory environment for local refining in Nigeria.

    He said they include: a roadmap for tackling the insecurity challenges in the industry, identifying and implementing areas of collaboration between government and operators in ensuring that operators realise their full production potentials.

    Others, he said were massive collaboration with the top civil echelon of the Nigerian security forces for a robust security for both operators and host communities.

    “The commission is also promoting the implementation of modern security technology for real time loss detection that would enable swift and more proactive responses.

    “We also advocate a refinery regulation in terms of establishment of more modular refineries to curb activities of artesians from refining crude which is outside the ambit of the law and absolutely below acceptable minimum standards of technology in the 21st century,” he said.

    Dr Michael Olawale-Cole, President, LCCI, expressed concerns over Nigeria’s battle in recent years with dwindling revenue, security challenges, weak infrastructure, rising inflation, high cost of production, and a burdening and unsustainable fuel subsidy.

    Olawale-Cole said that crude oil theft had taken a worrisome dimension spiking production costs to $32 a barrel with losses from pipeline vandalisation and theft overwhelming the International Oil Companies (IOCs).

    He added that the development had led to several indigenous oil firms contending with rising operational expenses driven mostly by personnel, maintenance, and security costs.

    Olawale-Cole said that there were also concerns about the culpability of the nation’s security agencies, noting that barges of oil could not be stolen and moved on the coastal waters without the collaboration of some powerful stakeholders.

    “The menace of oil theft has become a national disaster and a critical threat to our revenue base as Nigeria is losing crude oil at the level of about 91 per cent of output.

    “Nigeria lost $3.2 billion to crude oil theft between January 2021 and February 2022, as revealed by the NUPRC, the LCCI Oil Producers Trade Section, and the Independent Petroleum Producers Group (IPPG).

    “This menace has prevented Nigeria from meeting its crude oil output capacity,” he said.

    The LCCI President reiterated the chamber’s position in favour of the removal of fuel subsidies and full deregulation of the petroleum downstream sector to attract required investments into the sector.

    He said that the twin factor of fuel subsidy payments and crude oil theft have combined to deny Nigeria the gains of the high crude oil price on the international market.

    “No investor wants to invest in an industry where they cannot even recover their cost of production.

    “While we expect some respite from the commencement of commercial private sector refining and modular refineries, we call on the regulators to ensure a conducive business environment that supports these investments coming on stream soon,” he said.

  • Marginal fields: Amid rancour NUPRC awards licences to 161 coys

    Marginal fields: Amid rancour NUPRC awards licences to 161 coys

    Amid rancour, The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has awarded Petroleum Prospecting Licences (PPLs) to 161 successful 2020 marginal fields awardees.

    The commission also officially unveiled the Host Communities Development Regulations and model Petroleum Prospecting Licences (PPLs).

    Chief Timipre Sylva, the Minister of State Petroleum Resources, at the unveiling and licences presentation on Tuesday in Abuja said the maiden presentation of the PPL was part of the implementation of Petroleum Industry Act (PIA), 2021.

    The successful companies include Ardova Plc, Matrix Energy Ltd., Sun Trust Oil Company Limited, Deep Offshore Integrated Service Ltd., Island Energy Ltd. and Sigmund Oil Field Ltd.

    Others are Shafa Exploration and Production Company Ltd., Emadeb Energy Ltd., Zigma Ltd., Inland Basin Ltd. and Petraco Oil Ltd., among others.

    57 fields presented in the 2020 bid round met the criteria and were subsequently offered for bidding.

    Out of the 665 entities that expressed interest in the exercise,161 emerged as potential awardees while out of the 57 fields, 41 were fully paid for.

    Also, 37 fields were issued with the PPL having satisfied all conditions for award.

    The minister commended the management and staff of the NUPRC for ensuring the successful completion of the process, which began in 2020.

    He described it as a giant milestone for the administration.

    “The implementation of the PIA 2021 is in top gear. Consequently, the new awardees should note that their assets will be fully governed by the provisions of the PIA 2021.

    “As you develop your assets with the special purpose vehicles (SPVs), ensure that good oilfield practice is employed, environmental considerations and community stakeholders’ management are not neglected.

    “It is my strong belief that the awardees would take advantage of the current attractive oil prices to bring these fields into full production within a short period to increase production, grow reserves and reduce cost of production.

    “The onboarding of new oil and gas players in the petroleum sector is part of this government’s policy to encourage more indigenous participation in our petroleum operations,’’ he said.

    Sylva said the development would boost activities in the oil and gas sector.

    He added that it would boost production output and create additional employment opportunities for Nigerians

    Mr Gbenga Komolafe, Commission Chief Executive (CCE) NUPRC, recalled that one of the major tasks inherited by the commission, upon its inauguration in 2021 was the need to conclude the 2020 Marginal Field Bid Round.

    He said the exercise was faced with several constraints which included the COVID-19 interruption, partial payment of Signature Bonuses by some awardees, and the unwillingness of co-awardees to work together in forming SPVs for field development.

    He said the marginal field’s award initiative began in 1999 and was borne out of the need to entrench the indigenisation policy of government in the upstream sector and build local content capacity.

    He recalled that since its inception, a total of 30 fields had been awarded with 17 currently producing.

    He said that the 2020 Marginal Field Bid Round exercise in respect of which PPLs were being issued had attracted government revenue of about N200 million and seven million dollars, respectively.

    He said it was significant to note that the passage of the PIA brought an end to the era of Marginal Field awards.

    “Section 94 (9) of the Act states that no new Marginal Field shall be declared under this Act”.

    “Accordingly, the minister shall now award PPL on undeveloped fields following an open, fair, transparent, competitive, and non-discriminatory bidding process in line with Sections 73 and 74 of the Act,’’ he quoted.

    Komolafe said the impact of the upswing in the crude oil price was not reflecting in the nation’s revenue earnings due to disruptions in our national oil production owing to sabotage, theft, and other operational challenges.

    He urged the potential companies to take advantage of the current market realities and quickly bring their fields to production.

    Speaking on the unveiled Host Communities Development Regulations, he said it was significant for the commencement of implementation of the provisions of Section 235 of the PIA, for attraction of dividends to the host communities.

    Marginal oilfields: Ijaw leaders urge Petroleum Ministry to respect court order

    Meanwhile, some Ijaw leaders in Bayelsa had urged the Minister of Petroleum Resources to respect a substituting order of the Federal High Court, Yenagoa on the Marginal Oilfields Licensing rounds.

    The Court sitting in Yenagoa had restrained the Federal Government from issuing licences on marginal oilfields in the Niger Delta pending the determination of a pending suit.

    The Ijaw leaders, in a letter to the Minister of Petroleum Resources through the Minister of State for Petroleum by their counsel, Mr Enie Otrofaniwei said the letter was to draw the federal government’s attention to the subsisting order.

    The letter noted that as parties with legal representation in the suit, the Ministry of Petroleum Resources was expected to show examples in promoting the rule of law and abide by the court order.

    They vowed to take legal steps to oppose violation of the court order

    Marginal fields are shallow fields with less than 10 million barrels reserve which may not produce crude oil in commercial quantities immediately and would require further development to boost volume.

    Some Ijaw leaders approached the court in 2020 seeking to halt licensing on marginal oilfields located in their domains.

    Following setbacks and delays in the suit, however, the Federal Government announced bid winners on the fields on June 1, 2021.

    Presiding Justice Isa Dashen granted the restraining order in favour of the Ijaw leaders.

    Ijaw leaders who filed the suit are Chief Brown Agu (Opu Agu VIII), Mrs Rosemary John-Oduone, President Ijaw Women Connect and Mr Femowei Friend on behalf of themselves and the Ijaw ethnic nationality.

    The Attorney-General of the Federation and Minister of Justice, the Minister of Petroleum Resources and the Minister of State for Petroleum Resources are defendants in the suit.

    The Ijaw leaders asked the court to restrain the Federal Government from further advertising and receiving bids in respect of the marginal fields.

    They also asked the court to restrain the Federal Government from approving licences in respect of the marginal fields.

    Justice Dashen inherited the case from Justice Abimbola Awogboro following the latter’s transfer to the Lagos Division of the Court.