A new dawn is now in place in the country’s oil and gas sector. This was the position of the Chief Executive, Nigeria Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, and the Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, as both men declared in unison that the era of marginal fields and discretional oil blocks allocation are over in the country.
Speaking at the 2022 Strategic International Annual Conference organised by the National Association of Energy Correspondents (NAEC), in Lagos, yesterday, Komolafe, represented by Dr. Abel Nsa, the NUPRC boss declared; “no marginal fields shall be declared under this era because the Petroleum Industry Act (PIA) provisions have foreclosed this as well as any discretionary allocation of oil blocks.”
According to him, 30 oil blocks have, so far, been awarded through the marginal oil fields programme. Of these were two blocks in 1999; 24 in 2004, two in 2010 and one before this year.“As at today, 17 of these oil blocks are currently producing while 13 are not. The PIA has adequately addressed this and Petroleum Protecting Licenses (PPLs) have been awarded to firms based in merit.”
He however regretted that notwithstanding all of these, oil theft in the country has remained, becoming one of the major issues the government and commission is addressing. “We are planning seven additional regulations in line with provisions in the PIA to guarantee return on every dollar invested in Nigeria over any other jurisdictions. Host community development Trust Fund has replaced Memorandum of Understanding (MoU) and GMoUs between oil companies and the host communities,” Komolafe explained.
He noted that the PIA also provided for incentives aimed at growing reserves towards realisation of 40 billion barrels reserves and provision for reward for production milestones as shown in the Sections 232 and 233 of the Act.
“There is a Road map for tackling the security challenges in the industry, we are collaborating with the security agencies, we are installing gadget for real time loss detection. All these are done according to the provisions of the PIA.
Kyari, while delivering the keynote address, appraised NNPC’s PSCs renewal deals with Shell, Chevron , ExxonMobil, noted that in the last three weeks, the NNPC has settled issues with its partners, insisting that the firm has met the terms and conditions in the PIA.
“Our production is very low mostly because of the security challenges in the Niger Delta, and we are working collaboratively with stakeholders in addressing this. If we resolve the security issues, we will get back to 2.1 million barrels per day,” he said.