NUPRC: Unlocking Funding For Indigenous Awardees Of Petroleum Prospecting Licenses

In June last year, the Nigerian Upstream Petroleum Regulatory Commission under the leadership of the Chief Executive, Engr Gbenga Komolafe awarded 47 Petroleum Prospecting Licenses (PPL) to solely Nigerian entities.

The exercise is pursuant to the provisions of the Petroleum Industry Act (PIA), 2021 and in fulfillment of the promise which the Commission had made earlier in the 2021 fiscal period.

The award of 47 Petroleum Prospecting Licenses (PPL) to solely Nigerian entities marked the conclusion of some of the most urgent and critical tasks inherited by the Commission when it was inaugurated in October 2021, after the signing into law of the PIA 2021.

Some of the companies, which emerged winners from the exercise included: Matrix Energy, AA Rano, Andova Plc, Duport Midstream, Genesis Technical, Twin Summit, Bono Energy, Deep Offshore Integrated, Oodua Oil, MRS and Petrogas.

Others were North Oils and Gas, Pierport, Metropole, Pioneer Global, Shepherd Hill, Akata, NIPCO, Aida, YY Connect, Accord Oil, Pathway Oil, Tempo Oil and Virgin Forest, among others.

The government believes that the marginal fields hold significant volumes that could help to improve oil production, generate more revenues and add immense value to the country.

Before the exercise, the Commission had informed all participants in the marginal field bid round programme that it had put all necessary machinery in place to progress the bid round exercise to conclusion in line with the PIA 2021.

Following the award of the 47 Petroleum Prospecting Licenses (PPL) to solely Nigerian entities, the Commission took concerted steps to providing statutory guidance and support toward the progression of the Assets to development/First Oil pursuant to extant petroleum laws.

It is instructive to note that one of the steps taken by thee Commission is the convocation of Regulatory Induction Programme for PPL awardees. This was essentially done to enable the entities to have the requisite understanding of the statutory protocols from the award to First oil.

The Commission had also held a week long tripartite engagement at its Lagos office for all Awardees and the Initial Asset Owners between 14 and 20 December 2022 with about 30 entities in attendance.

The event which was greeted with fanfare by the Awardees and former asset owners resolved all outstanding issues that could inhibit smooth take-over and operation to first oil by the PPL awardees.

The Commission is further hand-holding the entities through the various regulatory gates necessarily required to fulfil initial work programme obligations to stream optimal value from the various assets and manage any ensuing challenges within the Regulatory framework.

In recognition of the funding challenges facing the awardees, a production based lending engagement has been planned in Abuja in the weeks ahead between the Commission, PPL Awardees, E&P Service providers (Rig Operators, Well Services etc) and Nigerian Banks.

This would help to provide platforms for strategic partnership/alliance between the PPL Awardees and the Service providers for well re-entry and drilling services to be offered on service fee to be recovered by the service provider from production to be streamed.

Also, the Commission has concluded plans to organise an E&P International Financing Roadshow scheduled to take place in the coming weeks in Abuja for Financiers, Investment bankers, Private Equities, Multi-lateral Institutional Investors to showcase the high value quick win opportunities for financing appetite.

The objective of this is to showcase the immense opportunities available in the recent PPL awards, showcase the ongoing National Gas Flare Commercialization Programme and highlight the importance of the Ongoing mini-bid awards.

Furthermore, the Commission has developed a Corporate Governance Framework for Upstream Operations in Nigeria which is currently at advance stage of internal review and stakeholders’ engagement required for its finalization.

This is to enhance Environmental, Sustainability and Governance requirement to facilitate capital attraction by companies investing in Nigeria for the optimal and efficient development of the PPLs and other assets.

Interestingly, the strategies so far adopted by NUPRC have yielded positive results with 16 companies submitting Field Development Plan (FDP), while two have commenced unitization processes. There are six re-entries and two EWT.

As a Commission, the NUPRC is also not unmindful of the protracted dispute among some of the awardees occasioned by shareholder disagreements and/or misunderstanding.

To tackle this, the Commission is actively working collaboratively and engaging the parties and mediating to facilitate early closure and assiduous progression to achieve the expected regulatory milestones to drive the attainment of first oil and value creation.