Crude oil theft: NUPRC launches aggressive campaign to reactivate shut-in wells, introduces Advance Cargo Declaration regime

Oredola Adeola

The Nigerian Upstream Regulatory Commission (NUPRC) has launched an aggressive campaign to boost oil and gas production by reactivating shut-in and declining wells, and also introduced the Advance Cargo Declaration regime to prevent the export of stolen crude oil by ensuring that Crude Oil and Gas cargoes exported from Nigeria are properly documented.

Engr. Gbenga Komolafe, Commission Chief Executive of NUPRC, made this intervention known at the annual International Stategic Conference 2023, organised by the Association of Energy Correspondents of Nigeria (NAEC) on Thursday in Lagos.

Speaking on the theme of the conference is ‘‘Nigeria’s Energy Transition: Enhancing Investment Opportunities and Addressing Challenges in the Oil and Gas Sector, Komolafe, who was represented by Mr. Abel Nsa, Head of the National Oil and Gas Excellence Centre (NOGEC) Department, NUPRC, said the initiative aims at ensuring that crude oil and gas cargoes exported from Nigeria have a unique identifier that confirms all documentation as regards the exported consignment.

He said, ‘‘This implies that any cargo without the unique identifier becomes tagged as illegitimate. This, by no small measure, enhances transparency in Nigeria’s export operations.

He further stated that NUPRC had deployed key resources to the Special Investigative Unit of the Commission to forestall any cases of sharp practices by operators in the sector.

‘‘Over the next few months, we are positive that we shall record a marked increase in our national oil and gas production volumes.

“Quick-win strategies such as our aggressive drive to reactivate shut-in and declining wells will boost production prior to the onset of more long-term initiatives like operations from the new Marginal Field awardees.

Also, the Commission is working alongside security operatives to bring a halt to the menace of crude oil theft, which has over the years contributed to a huge loss of production,” he said.

Engr. Komolafe also added that the NUPRC had commenced the implementation of the Drill or Drop Provision with a comprehensive review of assets which had been undeveloped by operators.

The CCE emphasised that the assets would be placed in a basket and then offered to willing and qualified investors with the capacity to explore, develop and produce the block(s) or field(s) in a timely, efficient, safe, and environmentally friendly manner.

He therefore noted that the ongoing mini bid round for seven Deep Offshore Petroleum Prospecting Licences (PPLs) would boost the nation’s reserves as well as bring about anticipated benefits to the nation and other stakeholders.

On reduction in unit cost per barrel and revenue, he explained that the Commission is committed to ensuring a significant reduction in the cost of doing business in the upstream petroleum industry.

‘‘Following an in-depth comparative analysis between the Unit Operating Cost (UOC) in Nigeria and those obtainable in other climes.

“We have commenced the development of cost studies and benchmarks to ensure an improvement in the cost efficiency of our upstream petroleum operations, in accordance with Section 8 of the Petroleum Industry Act 2021.

The NUPRC has also began a review of all Crude Handling Agreements (CHA) with a view to entrenching openness and competitiveness, thereby reducing the cost of production while increasing government revenue from the sector.

“It is noteworthy that in the year 2022, using the strategies listed above, the Commission outperformed its revenue collection target by 18.3 per cent.

Komolafe maintained that the Commission had stepped up efforts toward transparency in the sector and that transparency in hydrocarbon accounting was essential in ensuring maximum value derivation by the government and stakeholders.

According to him, transparency is essential to ensuring security of investments made by our financial partners.

Speaking on the country’s journey towards Energy transition and efforts to cut fugitive methane emissions from the oil and gas sector by 60%, the NUPRC disclosed that it has developed guidelines on the management of fugitive methane and GHG emissions in the upstream sector to drive the emission reduction and mitigations targets of the National Determined Contributions (NDCs).

The Commission emphasised that it has also established the Energy Transition and Carbon Monetisation Regulatory Unit within the Commission to drive the carbon monetisation efforts of the upstream sector.