FG rallies operators on oil production optimisation ahead of transition

As the push for transition intensifies, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has rallied oil producers in the country on the need to optimise production to extract maximum value from its hydrocarbon resources.

According to the regulator, production optimisation has become expedient due to global actions, adding that Nigeria will begin to see critical deliverables of the Petroleum Industry Act (PIA) in the development of key upstream projects in the next 12 months.

The Chief Executive, NUPRC, Gbenga Komolafe, at a stakeholders’ engagement session between the Commission and the Oil Producers Trade Section (OPTS) in Lagos, said the implementation of the PIA is very germane to the present administration, hence the reason for soliciting the support of the OPTS to achieve a successful PIA implementation.

He assured the OPTS of the Commission’s support to act as business enablers rather than regulators considering the operating environment challenges worsened by the COVID-19 pandemic.

“We will be regulated with the best regulatory practices in our quest to promote good business ethics. We intend to be a 21st-century regulator. We will also serve as a business enabler because, at this point in time, we need to build good synergy with you as operators and investors.

“This engagement is to build confidence with the OPTS to unfold our agenda as a brand new regulator and also try to identify the challenges faced by operators in their quest to exploit the nation’s hydrocarbon resources in a manner that we can extract maximum value for the benefit of the economy,” he said.

He explained that the industry is in a critical period in the sense that it is in the energy transition era, adding that they are monitoring the discussions in Glasgow as the outcome is posing a threat needed to be addressed.

“We are aware that the upstream business is facing critical funding challenges among other challenges that are particular to our terrain. I want to solicit your cooperation and I also want to assure you that we will work as partners in a manner that we will be able to achieve the overall objective of the PIA and realise optimal benefit to the nation,” Komolafe said.

In his response, OPTS Chairman, Rick Kennedy, said the unveiling of the Commission represents a major milestone, reforms and operationalisation of Nigeria’s oil and gas industry, given the long journey to finally enact the PIA.

“We are willing to work with you as partners as it resonates with us very well. We are pleased that you are ready to kick off an era of strong collaboration between OPTS and OPTS member companies with the Commission.

“We will gladly engage with you and your team in discussions towards understanding the challenges we all face and moving forward in collaboration where we can work together on future regulations and how to manage the business effectively on behalf of Nigeria and its citizens,” he said.

He, however, noted that the OPTS would need collaboration with the commission regarding some of the key timelines in the implementation of the PIA.

Kennedy said the areas included the incorporation of development trusts for host communities, installation of flare meters as well as gas flare and monetisation plan.

He said the challenges faced by the companies were high operating cost, security, lengthy contract cycle, multiple levies and taxes, among others.

“The whole issue about transition timelines and effectively managing them is an important opportunity for us to work together,” he added.

The Managing Director and Country Chairman, Shell Companies in Nigeria, Osagie Okunbor, said the OPTS would be counting on the Commission to address areas where corrections have to be made and attention drawn to the specific regulation and legislation of the PIA.

“We will always be available at every short notice to relate with the Commission. The more we can sit down to talk, the more clearly we would be able to trash out issues hindering the sector. We want you to be assured of our full support for the successful implementation of the PIA,” he said.