Oil Majors Get Regulatory Assurance To Invest In $10bn Deepwater Space
The logo which has simple features typifies the essence of Upstream operations with a rig icon embedded in the logo to reflect the mandate of the commission.
Oil Majors Get Regulatory Assurance To Invest In $10bn Deepwater Space.
The newly created Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has given international oil companies operating in Nigeria its assurance to look into identified grey areas in its implementation of the Petroleum Industry Act (PIA).
Chief executive officer, NUPRC, Mr Gbenga Komolafe made the call in his maiden meeting with top members of the Oil Producers Trade Section (OPTS) yesterday in Lagos.
The commission also announced the immediate promotion of 195 its staff and unveiled its new logo as it begins operation as the new upstream oil and gas sector regulator.
The IOCs also indicated they were reconsidering their earlier exit plan following uncertainties created by the PIA which made counter provision on already signed Memorandum of Understanding (MoU) with the Nigerian National Petroleum Corporation (NNPC), for deep water asset development.
NAN reports that a 12-year dispute on the operational guideline with regard to Production Sharing Contract (PSC) in the deep water space had cost parties over $9 billion in contingent liabilities.
However, the new PSC understanding is expected to yield $780 million in immediate revenues to the government and unlock $10 billion investment.
At the stakeholder meeting with members of the OPTS, composed of major IOCs, Komolafe, said the PIA has a timeline of about six to 12 months to clear some grey areas and that the Commission is interested more in encouraging investment in the sector.
Komolafe said the essence of the meeting was to clearly identify areas of concerns and challenges affecting their operations, as he assured them that all issues raised would be addressed as the PIA is subject to review so as to accommodate all inhibiting challenges.
On point at the meeting were the issues around timeline on gas flare out and PSC agreement earlier reached with the NNPC before the passage of the new law.
Rich Kennedy, managing director of Chevron and the Chairman of the OPTS, raised the two issues as major setbacks in their operations.
He complained that there was a renewed PSC agreement with the NNPC which the PIA, if implemented, would truncate.
However, in response, Komolafe assured the oil majors that all earlier agreements would be respected as any attempt to tinker with it would be counterproductive.
The OPTS comprises 29 companies which are the major players in Nigeria’s oil and gas sector.
Present at the meeting were Mr Rick Kennedy, Chairman, OPTS and managing director Chevron Nigeria Ltd; Mr Osagie Okunbor, country chair, Shell Companies in Nigeria; and Mr Mike Sangster managing director, TotalEnergies Nigeria.
Others were Mr Richard Laing, managing director, ExxonMobil Nigeria Ltd. and Mr Roberto Daniele, managing director, ENI Companies in Nigeria.
Komolafe noted that the OPTS was a critical stakeholder and partner in the development and operations of upstream assets in the Nigerian oil and gas industry.
He said the NUPRC was established following the signing of the PIA by President Muhammadu Buhari on Aug. 16 and was aimed at optimising the sector’s contribution to national development.
“The implementation of the PIA is very germane to the president and this current administration and he has given us a period of six to 12 months to begin to deliver some of the key deliverables.
“It is against this backdrop that I have decided to host this meeting in Lagos to reinforce my acknowledgment of your association and to solicit your collaboration as industry stakeholders,” Komolafe said.
He noted that the meeting was coming at a critical time when the clamour from the global community was focused on energy transition from fossil fuels to cleaner energy.
According to him, this has resulted in funding challenges for exploration activities being faced by the companies.
He said the meeting was to familiarise the commission with the OPTS members and listen to the challenges hindering optimisation of key areas in the upstream sector.
“Permit me also to say that this is the first in the series of engagements with you as our vision is to build a 21st century regulator that will be fair, just and be a critical business enabler in the upstream petroleum sector.
It is in this wise that we urge you all to join hands with us in building confidence in the industry for robust investment,” Komolafe said.
Kennedy, while congratulating Komolafe on his appointment, assured him of the support and cooperation of the OPTS in achieving the mandate of the commission.
Meanwhile, the elevation of 195 staff, which are part of the 2021 promotion exercise, came barely two weeks after Komolafe resumed duty as the head of the Commission.
The NUPRC was created by the Petroleum Industry Act (PIA) as the new petroleum upstream regulatory agency in place of the defunct Department of Petroleum Resources (DPR). The staff were inherited from DPR.
Komolafe, explained that the promotion was in recognition of the resilience and hard work put in by staff to meet the aspirations of the government for the Upstream sector of the Nigerian oil and gas industry.
He said that the welfare of staff will continue to be the focus of his administration in the Commission.
“I have ensured immediate approval for promotion of 195 union staff that have been stagnated in the defunct Department of Petroleum Resources (DPR) to stave off industrial crisis that could further harm the low daily oil production in Nigeria and worsen the nations federation generated oil revenue,” Komolafe stated further.
The NUPRC boss said that the decision to promote the staff followed his engagements with them adding that the measure “was also to boost staff morale and to ensure that the staff are not short changed in the unfolding transition and manpower re organisations in line with the PIA”.
He noted that “there is a positive correlation between boosting the nation’s crude production for optimised federation revenue and elevated staff morale in NUPRC”.
Unveiling the new logo Engr. Komolafe who was represented by Mr. Ibrahim Ciroma, deputy director & Head Corporate Services Strategic Business Unit, NUPRC, said it has become the commission’s new signage and brand identity.
He said the logo which has simple features typifies the essence of Upstream operations with a rig icon embedded in the logo to reflect the mandate of the commission.