The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued seven new gazetted regulations aimed at providing a regulatory environment that assures efficiency, predictability, clarity, and effectiveness to the Nigerian oil and gas industry.
Engr. Gbenga Komolafe, Commission Chief Executive signed and issued the new regulations on Thursday at the Commission’s headquarters in a ceremony that was also witnessed by Dr Orji Ogonnaya Orji, Executive Secretary of the Nigerian Extractive Industry Transparency Initiative (NEITI).
These newly gazetted regulations have thereby brought to twelve (12), the number of regulations that have been concluded and issued by the Commission in line with its mandate as prescribed by the Petroleum Industry Act (PIA), 2021.
The seven(7) new regulations are; Nigeria Upstream Petroleum Measurement Regulations, 2023; Production Curtailment and Domestic Crude Oil Supply Obligation Regulations, 2023; Frontier Basins Exploration Fund Administration Regulations, 2023; and Nigeria Upstream Decommissioning and Abandonment Regulations.
The others are significant crude oil and gas discovery regulations, 2023; Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023; and the Nigeria Upstream Petroleum Unitization Regulations, 2023.
EnergyDay confirmed that five regulations were successfully gazetted into law between June and October 2022, and they include; Petroleum Licensing Round Regulations 2022; Petroleum Royalty Regulations 2022; Domestic Gas Delivery Obligations Regulations 2022.
The others are Conversion and Renewal (Licences and Lease); and the Nigeria Upstream Petroleum Host Communities Development Regulations 2022.
EnergyDay gathered that all the 12 regulations and the 6 others that are expected to be finalized soon would serve as the key regulatory tools to be deployed by the Commission in the discharge of its statutory functions under the PIA regime.
According to the NUPRC , all eighteen (18) regulations were initially identified as priorities.
Highlighting the functions of the 7 new regulations within the industry, Komolafe said, the Nigeria Upstream Petroleum Measurement Regulations, 2023, will close the metering gap in upstream petroleum operations; encourage accelerated hydrocarbon measurement metering devices roll-out in upstream petroleum operations.
He added that it would also encourage the development of independent and competitive meters used in the upstream subsector, attracts private investment in the provision of metering services; and also provide for the regulation of the measurement of petroleum produced.
The CCE also noted that the regulation would ensure transparent and accurate measurement of crude oil and gas as a basis for the calculation of oil and gas revenues accruable to the Government; and define requirements for the design, fabrication, manufacturing, testing, calibration, operation and maintenance of upstream metering equipment.
He emphasised that the regulation is a clear departure from the trajectory in Nigeria’s upstream sector since oil was discovered in Nigeria in 1956 and production commenced in 1958.
Speaking about the Production Curtailment and Domestic Crude Oil Supply Obligation Regulations, Komolafe further noted that the regulations provide general rules for production curtailment and utilization of the produced petroleum in relation to export and domestic crude oil supply obligations, pursuant to sections 8(c) and 109 of the Act.
He also noted that the Frontier Basins Exploration Fund Administration Regulations, will provide the general rules for the exercise of the Commission’s responsibilities with respect to frontier basins in Nigeria, pursuant to section 9 of the Act and the administration of the Frontier Exploration Fund. The aim is to encourage and attract investment to the frontier basins in Nigeria.
Explaining the function of the Nigeria Upstream Decommissioning and Abandonment Regulations 2023, the CCE said that the regulations seek to ensure that decommissioning and abandonment activities are conducted in accordance with good international petroleum industry practices.
He added that the regulations also set the framework for the establishment and administration of a Decommissioning and Abandonment Fund.
On the Significant Crude Oil and Gas Discovery Regulations, Komolafe said that the regulations would ensure optimum exploitation of petroleum covered by Petroleum Prospecting Licenses, granted under the Act, by the retention of areas of significant crude oil discovery and significant gas discovery by a licensee for a specified time in accordance with section 78 of the Act.
He further noted that the Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations, seeks to reduce the environmental and social impact associated with gas flaring and venting of natural gas and fugitive methane emissions into the atmosphere.
He noted that the regulations will preserve and protect the environment; prevent waste of natural resources; enhance energy transition in Nigeria; create social and economic benefits from gas flaring and venting; and set out the procedure for the Commission to exercise its rights to take gas at flare point in accordance with the Act and all other applicable laws.
Engr. Komolafe further explained that the Nigeria Upstream Petroleum Unitization Regulations, would establish the rules, principles, and procedures for the implementation of unitization of oil and gas from a petroleum reservoir that extends beyond the boundaries of a licence or lease area into an area to which another licence or lease relates.
The CCE therefore stated that issuing the regulations represented a significant milestone achievement for the Commission in its continued stride towards the attainment of the goals of the PIA and the reformation of the upstream petroleum sector.
He noted that the process of formulating the above regulations has been a rigorous and strenuous exercise characterised by several challenges at different stages of the regulation making process. Nevertheless, the outcome of that process is a result of critical thinking, vigorous engagements with the industry stakeholders, careful evaluation, and hard work by the Commission’s Regulation development team.
Komolafe however charged the Commission’s Regulation development team to re-double their ongoing efforts to speedily conclude work on the other regulations that they are currently working on as well as the others that have been identified and are being developed.
He, therefore, assured the industry stakeholders of the Commission’s continuous dedication to developing and issuing policies that will create an enabling environment for growth and more investments in the Nigerian upstream oil and gas sector.