PIA: NUPRC Signs Seven New Regulations Into Law To Close Metering Gaps, Reduce Environmental impact Of Gas Flaring, Others

The Chief Executive of the Nigeria Upstream Petroleum Regulatory Commission, Mr Gbenga Komolafe on Thursday signed seven regulations into law in line with the provisions of the Petroleum Industry Act 2021.

The PIA 2021 empowers the Commission to make regulations which will give meaning and intent to the spirit of the Act.

The Commission had, in fulfillment of this mandate, swung into action with drafting of regulations of which five regulations have already been gazette and published to date.

The five Regulations that were successfully gazetted into law between June and October 2022 are the Petroleum Licensing Round Regulations 2022; the Petroleum Royalty Regulations 2022; Domestic Gas Delivery Obligations Regulations 2022; Conversion and Renewal (Licences and Lease) and the Nigeria Upstream Petroleum Host Communities Development Regulations 2022.

Speaking at the event, Komolafe said the Gazetting of these regulations demonstrated the Commission’s commitment towards providing a business enabling environment in the Nigerian Upstream Oil & Gas industry space.

He explained that the NUPRC’s drive to promote clarity, trust and predictability in the industry has remained un-flinching as evident in the efforts deplored towards ensuring that regulations and key policies necessitated by the PIA are developed and gazetted expeditiously to enable alignment with the provisions of the PIA.

He explained further that the seven regulations that was signed into law on Thursday are part of the 13 draft Regulations that were presented for discussion during the 1st, 2nd and 3rd phase of the Commission’s consultations with stakeholders between 2022 and 2023.

These Regulations are Upstream Petroleum Fees and Rents Regulations; Upstream Decommissioning and Abandonment Regulations; Unitization Regulations; Acreage Management (Drilling & Production) Regulations; Frontier Exploration Fund Administration Regulations and Upstream Environmental Remediation Fund Regulations.

Others are Upstream Petroleum Safety Regulations; Upstream Petroleum Environmental Regulations; Upstream Petroleum Measurement Regulations ; Advance Cargo Declaration Regulations; Significant Discovery Regulations; Domestic Crude Oil Supply Obligation Regulations; and Gas Flaring and Venting (Prevention of Waste and Pollution) Regulations.

He stated that the inputs of the Stakeholders from the various engagements were considered in the drafting of these regulations, noting that the draft regulations were subsequently forwarded to the Attorney General of the Federation and Minister of Justice for vetting, legislative standardization, and approval.

He said from these 13 Draft Regulations, seven of them have been concluded and are now signed into law.

They are the Nigeria Upstream Petroleum Measurement Regulations, 2023 which would close the metering gap in upstream petroleum operations; encourage accelerated hydrocarbon measurement metering devices roll out in upstream petroleum operations; encourage the development of independent and competitive meters used in the Upstream; attract private investment in the provision of metering services.

It is also expected to provide for the regulation of the measurement of petroleum produced; 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.

“This is a clear departure from the trajectory in the Nigeria upstream sector since oil was discovered in Nigeria in 1956 and production commenced in 1958,” he added.

The second Regulation that was signed into law is the Production Curtailment and Domestic Crude Oil Supply Obligation Regulations, 2023, which would provide the general rules for production curtailment and utilisation of the produced petroleum in relation to export and domestic crude oil supply obligation pursuant to sections 8(c) and 109 of the Act.

Also signed into law is the Frontier Basins Exploration Fund Administration Regulations, 2023 that 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 PIA and the administration of the Frontier Exploration Fund. The aim of this Regulation is to encourage and attract investment to the frontier basins in Nigeria.

Komolafe also signed into law the Nigeria Upstream Decommissioning and Abandonment Regulations 2023 which seeks to ensure that decommissioning and abandonment activities are conducted in accordance with good international petroleum industry practice.

The Regulations also set the framework for the establishment and administration of a Decommissioning and Abandonment Fund.

The Significant Crude Oil and Gas Discovery Regulations, 2023 was also signed into law to 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 specified time in accordance with section 78 of the Act.

The sixth Regulation that was signed into law is the Gas Flaring, Venting and Methane Emission (Prevention of Waste and Pollution) Regulations, 2023 which seeks to reduce environmental and social impact associated with gas flaring and venting of natural gas and fugitive methane emissions into the atmosphere; preserve and protect the environment; and prevent waste of natural resources.

It is also intended to 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.

Finally, the Commission also signed the Nigeria Upstream Petroleum Unitization Regulations, 2023 which establishes rules, principles, and procedures for the implementation of unitisation 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.

Komolafe stated that these seven regulations that were signed and issued on Thursday by the Commission brings to 12 the total number of regulations now gazetted, out of the 18 regulations initially identified as priority regulations.

He said, “They (Regulations) represent a significant milestone achievement for the Commission in its continues stride towards the attainment of the goals of the PIA and the reformation of the upstream petroleum sector. All the regulations are revolutionary in nature aimed at providing a regulatory environment that assures efficiency, predictability, clarity, and effectiveness to the industry in the discharge of the Commission’s mandate.

“All the Regulations now 12 in number and the others to be soon finalised would serve as the key regulatory tool that would be deployed by the Commission in the discharge of its statutory functions under the PIA regime.

“It is pertinent to note 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, whose efforts are a testament to the Commission’s continuing strive towards excellence in the discharge of its functions.”

He charged all stakeholders to re-double their on-going 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.

The NUPRC Boss also assures the industry 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.

“We therefore look forward to the support of all stakeholders in complying with the regulatory measures put in place by the NUPRC to ensure operations are conducted in line with international best practices,” he concluded.

ENDS