Close button
The Guardian
Email YouTube Facebook Instagram Twitter WhatsApp

Delay in FDPs approval and Nigeria’s quest for 40 billion reserves target



The Federal Government’s desire to grow Nigeria’s strategic oil reserves to about 40 billion barrels and daily crude oil production to four million barrels per day may suffer setback due to delay in the approval of Field Development Plan (FDPs) in the oil and gas sector.

Getting regulatory approvals for oil and gas projects in Nigeria has remained a tough call, especially considering the many layers of bureaucracy prospective investors must pass through to begin a project.

Nigeria, oil and gas companies are constantly under increasing pressure from investors to translate oil discoveries into cash flow as quickly as possible.


On the other hand, growing field complexity in Nigeria has made FDPs increasingly difficult to formulate, approve and execute.

This has made the overall performance of Nigerian projects worse than that of their counterparts in other developed countries.

Field Development Plan can be defined simply as the process of turning an oil and gas opportunity into a sanctioned project. It consists of identifying and defining, as a system, all the components required to develop and operate oil and gas fields successfully.

Some of the reasons attributed to delays in getting approval or even outright rejection of FDPs include inadequacy of plans in addressing the entire project’s pressing issues.

Partners working in isolation without consulting stakeholders and regulators, lack of understanding of fiscal regimes, gas utilization, project execution, contracting strategy and project economics are some of the challenges observed by experts as responsible for the delay in FDP approval.

In Nigeria, the enabling law that gives legal backing to FDP approval is the Petroleum (Drilling & Production) Regulation of 1969, as amended, Manual of Procedure Guide for the Petroleum Inspectorate, Procedure Guide for the Design and Construction of oil and gas production facilities and numerous other Guidelines developed in that regard by the DPR.

These laws are made pursuant to the powers conferred on the Minister of Petroleum Resources under Section 9 of the Petroleum Act (CAP 350) laws of the Federation of Nigeria 1990. The regulations put in statutory form –both the regulatory and operational details governing field exploration, development and production. It also prescribes the various fees, rents and royalties that shall be payable when the field is put on production

Stakeholders therefore believed that there is currently an increased need for FDP approvals as oil price is now rising and there is noticeable willingness of companies to commence developments of their fields.

They also called for the need for regulators to standardize approval processes for new field development and updates.

For the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, failure to provide timely approvals will result in delayed production, loss of revenue and profitability, reduced economic growth and loss of future investment opportunities

According to him, expedited FDP approval process is vital to the development of the upstream sector, adding that the Federal Government is fully committed to this process.

Kachikwu said: “Timely FDP approval process is a win-win for government and investors. The Federal Government of Nigeria Gas Flare Commercialization Program (NGFCP), designed to use innovative technologies to eliminate gas wastage and thus stimulate economic growth will henceforth rely on a plan for gas utilization as part of the FDP requirements by Department of Petroleum Resources (DPR).

“Therefore, to a large degree, it defines the success or otherwise of the field. This is the document the regulator of our oil and gas industry must approve before the commencement of activities in any oil fied of our nation.”

The DPR is one of the Federal Government’s agencies said to be responsible for the delay in getting FDP approval in Nigeria.

According to stakeholders, DPR lacks the technology and staff strength to facilitate FDP approval.

But the DPR’s Assistant Director, Operations, Babajide Fashina said that DPR being the regulatory arm of the Nigerian oil and fas industry is saddled with responsibility of regulating activities from block discovery to field abandonment.

He noted that part of its goal through the requirements for FDP before approvals, is to conserve the hydrocarbon resources of the nation in a safe, secure and environmentally friendly manner, which it achieves by the acts, regulations and guidelines governing the Nigerian oil and gas industry.


Ladan affirmed that contrary to speculations in some quarters, staffing was not a constraint to the timely approval of FDPs. “Technological advancements such as surveillance with down hole gauges, multi-phase flow meters, digitization, artificial intelligence, were slowly being adopted by DPR. DPR sought to ensure that these technologies had been tested,” he added.

The Group General Manager, National Petroleum Investment Management Services (NAPIMS), Mr. Roland Ewubare said that FDP is necessary because not every field is economic to develop, adding that mistakes come at a heavy price.

He noted that every hydrocarbon accumulation is uniquely different, as such each new development creates a new challenge.

He listed the challenges to timely approval of FDPs to partners working in isolation, understanding the fiscal regimes, gas utilization, project execution and contracting strategy.

He emphasized the need for synergy of utilization of facilities of other operators in developing a field development plan, especially new operators with single concession.

Receive News Alerts on Whatsapp: +2348136370421

No comments yet