Tag: NUPRC

• Dangote, others seek 597,000bpd to meet petrol demand

Upstream oil industry regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is unable to meet the crude feedstock required by local refineries to refine products including premium motor spirit (PMS) or petrol, automated gas oil (AGO) or diesel, aviation turbine kerosene (ATK) and domestic cooking fuel, kerosene, it was gathered yesterday.

This is because the local refineries including the Dangote Refinery have raised their domestic crude requirements for the second half of this year to 597,700 barrels per day (bpd) from 483,000 bpd in the first half, despite tight domestic supply according to the regulator.

NUPRC was only able to help secure 177,777 bpd from oil producers in the first six months of the year, way below what the refiners had asked for, it said in a statement.

According to Reuters, the refineries’ rising crude requirements and oil producers’ struggle to meet demand has put the 650,000-bpd Dangote Refinery in particular at odds with the regulator.

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Dangote Refinery has accused NUPRC of failing to enforce a law that requires oil producers to supply domestic refiners, saying in a statement that lax enforcement was raising its operational costs.

The refinery, which is the largest in Africa, said it has to increase its crude imports due to the insufficient domestic supplies and this could impact its ambitions this year and its long-term prospects, opening a new tab.

The NUPRC said oil producers could not satisfy the demands because some had operational challenges while others pledged most of their output to traders who financed drilling. It also said forcing them to raise their supply would violate their contracts.

In its statement, the regulator also projected national average crude oil production of 1.7 million bpd by December this year, higher than the 1.57 million bpd it projected for January through July, which producers did not meet.

“This comprehensive data provides insight into the projected crude oil needs for the refineries, crucial for understanding the energy landscape in Nigeria for the second half of 2024,” NUPRC Chief Executive,  Gbenga Komolafe, said in the statement.

NUPRC data showed that eight refineries are expected to be operational from August, with a total refining capacity of 864,500 bpd, meaning that oil producers would be required to supply over half that.

A total of 52 oil producers, including majors TotalEnergies, Chevron, Shell and ExxonMobil, opened a new tab that will supply the crude, mainly from their joint venture (JV) operations with Nigerian state oil firm, the Nigerian National Petroleum Corporation Ltd (NNPCL).

• NNPCL assures support for Dangote Refinery, others

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said it is implementing the Upstream Asset Divestment Framework to guide the seamlessly non-destructive exit of divesting entities and promote sustainable operation for the acquiring parties.

This is just as the Nigerian National Petroleum Company (NNPC) Limited also assured of its support for the Dangote Refinery and all other refineries in the country to ensure that

The Commission Chief Executive, Gbenga Komolafe, made this known at an energy conference- Nigeria Annual International Conference and Exhibition (NAICE) 2024,  which began in Lagos, yesterday.  The conference has as its theme: “Petroleum Industry Value Chain Optimisation: The Inevitability of Midstream and Downstream Development.”

Komolafe, who was represented at the event by the Executive Commissioner, Development and Production, Enorense Amadasu, said the commission was entrenching collaboration with its sister agency, the NMDPRA and other key stakeholders to deepen end-to-end value in critical areas of operations.

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To ensure robust development of oil and gas midstream operations, Komolafe said the commission would strengthen alignments on the administration of the Domestic Crude Supply Obligation and the Domestic Gas Delivery Obligation to grow the sector consistently with the provisions of the Petroleum Industry Act (PIA) 2021. He expressed the confidence that commission’s effort to foster regulatory alignments in this respect would stimulate further activities for domestic energy security.

“We are committed to entrenching collaboration for enhanced value to the industry and the nation at large, as we deliberate on the strategies and innovative approaches that will prepare the industry forward, let us remember that the optimisation of the midstream and downstream segments is not merely an option but inevitability.”

By focusing on this area, we can mitigate the risks associated with market volatility, enhance the refining capacities, and ensure a more stable and efficient energy security for our nation in the world undergoing change”, Komolafe stated.

Highlighting the importance of conscious action to mitigate the impact of energy transition and position the nation for a decarbonised world, the CCE noted that irrespective of any individual’s views, the world is on the energy transition course. He insisted that the dividend of the in-country value from the oil and gas resources via a midstream and a downstream operation is highly imperative.

Komolafe insisted that concrete steps towards upstream decarbonisation must be taken whilst creating the structures that allows midstream operations to thrive and diversify the nation’s economic base. He disclosed the Commission had made deliberate and conscious efforts to position the upstream appropriately through the implementation of the ongoing regulatory framework for upstream decarbonisation and carbon monetisation in Nigeria. This is just as he added that the NUPRC is championing decarbonisation initiatives to sustain and grow investments in upstream oil and gas while ensuring environmental, social and corporate governance principles.

In similar vein, the Group Chief Executive Officer, NNPC Limited, Mele Kyari, who spoke virtually at the conference, said the NNPC Limited was putting in place the required infrastructure that is needed to deepen domestic gas utilisation.

According to Kyari, the obligation for domestic gas supply and also domestic supply of crude oil into the country is by no means designed to make sure that things worked for the industry. “What it really means is that growing this economy, growing this market is a team in the middle class that is growing in the country”, he said, insisting that there must be a robust midstream and downstream in the country for this to happen.

He said the NNPCL was making every effort to make sure that the refineries owned by energy were coming to operation so that domestic supply of petroleum products could be improved. “We also continue to support other efforts, including the Dangote refinery and very many other smaller refineries that are coming. And we have a duty to support all this. That’s why we’re at the forefront of supporting these businesses to make sure that they function and they deliver value to our country”, he stated.

He said the NNPCL would continue to support every industry in the country, in the midstream, to do this adding the PIA has made it clear that there would be an open access environment, which means that people can produce oil or gas and they would have access wherever their access capacity existed.

Apart from everyone having access to those facilities, Kyari said the NNPCL was also taking another bold step to replace all of the pipelines to a bill of return and transfer mechanism, adding this is already in process.

“We have a split contract with a number of partners, and this will clearly, at the end, deliver product near the store to consumers across the country, guaranteeing security for the country, and also guarantee use and accessibility to transport petroleum and drugs across the country”, he stated.

He said the NNPC was still at the forefront of leading the process of creating the safety access so that, automobile fuel could now come from gas disclosing the NNPCL had commissioned over 13 safety stations across the country as well as building presence in all states of the nation.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday said the divestment of Nigerian Agip Oil Company (NOAC) onshore asset to Oando Plc has been completed.

The Commission’s Chief Executive, Gbenga Komolafe, made this known at the on going 2024 Nigerian Oil and Gas (NOG) conference in Abuja yesterday. He also noted that the agreement signing ceremony of the divestment will come soon.

He said  in terms of reserves and production,  land terrain accounts for 26% of total reserves, offshore accounts for 43%  and that swamp accounts for 33 per cent.

Komolafe said in Nigeria, deep offshore accounts for 43 per cent of total oil reserves total national oil production.

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He said deep offshore accounts for 30% daily production while deep water contributes 6% of the entire oil wells.

The NUPRC boss said “And for us in Nigeria, our  deep offshore accounts for 43 per cent of our total oil reserves, and also of our total national oil production, deep offshore accounts for 30 per cent of our daily production.

“And of the total wells developed, the deep offshore contributes 6% of the entire wells.”

He described the Nigerian deep offshore as  profitable and prolific.

Komolafe also noted that more capital expenditure is required for deep offshore development in other jurisdictions than in Nigeria.

Meanwhile, the Nigerian National Petroleum Company Limited (NNPCL) Executive Vice President, Oritsemeyiwa Eyesan, yesterday said the company’s Initial Public Offering (IPO) will be ready by the end of 2024. She recalled that NNPCL targeted to issue the IPO last year but it could not realize the target.

She noted however the announcement of the IPO will be dependent on the settlement of certain commercial issues.

Eyesan said: “NNPCL IPO, it is a work in progress. We are working on it and we assure that we would be IPO ready by sometime last year. We didn’t achieve that milestone.

“We are still working on it and I can assure you that in a very short while we will be IPO ready but the IPO announcement will be contingent on a number of commercial issues that we will have to clear before we will announce. But we can assure you that by the end of this year we will IPO ready.”

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) said Africa holds substantial oil and gas reserves. The continent’s proven oil reserves are estimated to be 125 billion barrels, representing approximately seven to nine per cent of the world’s total oil reserves, while the proven natural gas reserves are estimated at around 620 trillion cubic feet (Tcf).

Chief Executive, NUPRC, Mr Gbenga Komolafe, spoke during the unveiling of the African Petroleum Regulators’ Forum (AFRIPERF) to drive continental aspirations in the development and utilisation of hydrocarbon resources.

The NUPRC unveiled the AFRIPERF at its maiden roundtable on the sidelines of the Nigeria Oil and Gas (NOG) Energy Week 2024 holding from July 1 to July 3, 2024 in Abuja.

The AFRIPERF roundtable has its theme as: “Fostering Collaboration and Sustainability in Africa’s Petroleum industry.”

He said: “Aside from hydrocarbon resources, Africa is blessed with potential for green and blue hydrogen, solar, wind, biomass and critical minerals for development of clean energy technologies and growing population pre-dominated by young people.”

He said with a population of 1.49 billion compared to a combined population of Europe and U.S. estimated at 1.1 billion, Africa had the second largest  population among the continents of the world.

This population, he said was expected to continue growing rapidly in the coming decades.

“Unfortunately, Africa’s Gross Domestic Product (GDP) which currently stands at three trillion dollars is very low compared to that of Europe at  $22 trillion and U.S at $26.9 trillion according to the World Bank, International Monetary Fund,” he added.

He explained that these statistics underscored Africa’s significant role in the global youth demographic and highlighted the need for collaboration for targeted policies and investments that would support this growing segment of the population.

He noted that the need for a unified platform that would bring together the regulators of the African Petroleum Industry was conceived during the African Energy Leadership Forum and Awards at the Offshore Technology Conference in Houston, USA, In May 2023.

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“As we are all aware, we are faced with rapidly evolving global energy landscape, it is, therefore, imperative that we leverage our collective strengths to secure the appropriate energy source for the development of our nations and benefit of our people.

“The recent surge in hydrocarbon discoveries across Africa, coupled with the pressing need for a sustainable energy transition, demands a concerted effort from all of us.

“AFRIPERF will enable us to address these challenges head-on, ensuring that our regulatory frameworks are robust, our policies forward-thinking, and our actions aligned with global best practices,” he said.

Speaking on the objectives of AFRIPERF, he said it would promote investment and cooperation among regulators of African petroleum producing countries, facilitate knowledge sharing, technology transfer, and the dissemination of best practices.

Deputy Director Reservoir Management and Unitisation/Energy Transition and Carbon Monetisation, NUPRC, Mr Joseph Ogunshola said the forum required concerted efforts to drive initiatives and objectives proposed for AFRIPERF.

Ogunshola, in a presentation entitled: “Fostering Collaborative and Sustainability of Africa’s Petroleum Industry: Establishment of the Africa Petroleum Regulatory Forum,” said 60 per cent of Africa’s export earnings were from hydrocarbons.

He underscored the need for access to clean cooking fuel, Liquefied Petroleum Gas (LPG) utilisation and balanced relationship between energy situation and economic growth and fair balance equitable energy transition.

Chief Executive Officer, Petroleum Commission, Ghana, Mr Ergbert Faibille, lauded the NUPRC for conceiving and putting together the forum, adding that Ghana would be supportive to ensure its success.

“The forum will enable the regulators in the continent to think through what our prospects are, what our challenges are and ensure that Africa is not left behind in the global energy industry,” he said.

Fabille, while expressing enthusiasm on the resolution of producing the Abuja Declaration on the Forum for future references called for an investment in a firm and harmonised regulatory environment across African continent

Also speaking, Kanni Touray, the Deputy Director-General, Petroleum Commission, the Gambia, expressed delight to be part of the forum.

Touray said that the forum would enable the Gambia to learn from Nigeria’s exploration and petroleum value chain.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday said it has extended the 2024 licensing bid round registration by 10 days.

Commission Chief Executive Officer, Gbenga Komolafe, in a press statement at Abuja, said the extension is to allow interested investors take advantage of the expanded opportunities.

The statement was entitled: “Nigeria Oil Block Licensing Round Updates on 2022/2023 and 2024 Licensing Rounds.”

He said: “To allow interested investors to take advantage of the expanded opportunities, the 2024 Licencing Round Schedule has been amended as follows:

“Registration/Submission of Pre-Qualification Documents which was initially scheduled to close on 25 June 2024 has been extended by 10 days and will now close on 5 July 2024.”

He said Data Access/ Data Purchase/Evaluation/Bid Preparation and Submission which was initially scheduled to open on 4 July 2024 and close on 29/11/24 will now start on 8 July 2024 and close on 29/11/24 as previously scheduled.”

Komolafe however, noted that all other dates in the published 2024 Licencing Round Schedule remain the same unless otherwise communicated.

He further explained that in pursuit of the Commission’s commitment to derive value from the country’s abundant oil and gas reserves and increase production, the Commission has been working assiduously with multi-client companies to undertake more exploratory activities to acquire more data to foster and encourage further investment in the Nigerian upstream sector.

He added that as a result of additional data acquired in respect of deep offshore blocks, the Commission has added 17 deep offshore blocks to the 2024 Licensing Round. Further details on the blocks can be found on the bid portal.

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Komolafe said Petroleum Processing Lease PPL 300-CS & PPL 301-CS, PPL 2000 and PPL 2001, which the commission has advised bidders to apply for in clusters may now be applied for as single units.

“Lastly, in accordance with the published guidelines, we had earlier indicated that some of the assets on offer should be applied for as clusters, namely: PPL 300-CS & PPL 301-CS, PPL 2000 and PPL 2001.

“Bidders are hereby advised that they may, at their option, bid for those blocks as clusters or as single units,” he said.

Komolafe recalled that some deep offshore blocks were put on offer for the 2022/23 Mini Bid Round and other blocks which cut across onshore, continental shelf and deep offshore terrains were also put on offer for the Nigeria 2024 Licencing Round.

In order to vacate entry barriers, he said the Commission had sought and obtained the approval of Mr. President, Bola Ahmed Tinubu, who, as Petroleum Minister, in line with his avowed determination to create enabling and attractive investment regimes in the upstream oil and gas sector, approved attractive fiscal regimes and also minimised entry fees for both licencing rounds by putting a cap on the signature bonus payable for award of the acreages.

Komolafe said: “Consequently, it is necessary to ensure that the same bid criteria (in addition to the uniform signature bonus criteria) are applicable for both licencing rounds, to promote transparency and provide a level playing ground for all bidders.

“Since the criteria for the award of the oil blocks are now much more attractive than they initially were during the 2022/23 Mini Bid Round, it is in the interest of equity and fair play to give all investors the same opportunity to bid for the assets.  Consequently, all blocks in the 2022/23 and 2024 Licencing Rounds are available to all interested investors on br.nuprc.gov.ng and br2024.nuprc.gov.ng respectively, and the 2022/23 Mini Bid Round registration phase is reopened to new applicants.

“The public is therefore invited to take advantage of this development and attractive entry terms and conditions and participate in the exercise.

However, all the pre-qualified Applicants published on the 2022/23 Mini Bid Round portal will not be required to go through a new pre-qualification process, as their technical submissions remain valid and eligible even for the 2024 Licencing Round.

“They may however wish to resubmit new Commercial Bids to take advantage of the more attractive criteria applicable to both licencing rounds and revise their Bid Bonds to adapt to the new bid criteria. They are also free to bid for blocks on offer in the 2024 Licencing Round.”

• •Shell: PIA, Executive Order stimulate competition

A new dawn is on the horizon for the Nigerian upstream oil sector. This is coming on the heels of a renewed strategy that is being deployed in the forthcoming oil block licencing bid round scheduled to begin next month.

Addressing stakeholders yesterday at the Pre-Bid Conference for 2024 Licensing Round hosted by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in Lagos, the Commission Chief Executive, Gbenga Komolafe, an engineer, was emphatic that prospective licence winners must be genuine investors who are ready to invest and operate oil blocks won within a limited time frame to be specified by the Commission.

According to him, the objectives of this year’s exercise are to grow oil, gas reserves, to boost production, to enhance Nigerian content development and attract investment among others. This is a sharp contrast to what obtains previously when licencees after obtaining the licence opt to trade it off to other, who subsequently are not capable of operating the blocks.

He further said in the Licensing Round exercise, the NUPRC, in collaboration with the National Data Repository and multi-client partners, guarantees access  to comprehensive and high-quality geological data, facilitating informed decision-making and strategic investments.

“The blocks on offer have extensive 2D and 3D seismic data coverage, including multi-beam and analog data. Additionally, a 3D reprocessed Pre-stack Time Migration of remarkable quality is also available to prospective bidders.”

The availability of advanced seismic datasets and analytical tools via our dedicated portals exemplifies our commitment to excellence and technological advancement,” he said.

As against a previously announced 12 blocks on offer in the bid round, the Commission announced that it has also placed more oil blocks on sale following the acquisition of more geological data resulting in the identification of more prospective blocks- a feat it was able to attain in partnership with its multi-client partners.

“The newly identified blocks will be added to the pool of blocks originally scheduled for the bid exercise and their details will be made available on the bid round portal. In addition to these blocks, the seven deep offshore blocks from the 2022 Mini-Bid Round Exercise which cover an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m shall also be concluded along with this licensing round,” the CCE explained.

Komolafe, who expressed the Commission’s determination to conduct the bid round in a transparent manner in accordance with Section 76 (1) of the Petroleum Industry Act (PIA) 2021, said each bloc has been chosen for its potential to bolster the nation’s reserve and economic posterity, adding that as at last April, Nigeria’s oil reserve stood at 37.5 billion barrels of oil and 209 trillion cubic feet (tcf) of gas.

“We are not just a regulator, but a business enabler. This bid round will enable us an unprecedented opportunity to unlock Nigeria’s vast hydrocarbon potential, attract investment and propel our nation towards greater economic prosperity and shared prosperity,” he stated.

The NUPRC helmsman therefore called on investors to trust their investments in the Nigerian oil sector because it is cheaper for them to conduct exploration and production to produce oil in the country because of the depth of the oil wells.

He further explained that Nigeria remains an investment haven and a destination of first choice for investors because the nation has a stable democracy; blessed with a good location that is close to the coast line stretching of 900 kilometers; ease of access to the Europe, American market; attractive fiscal regime; effective regulatory regime; presence of International Oil Companies (IOCs) with confidence in Nigeria; ease of discovery of oil and high prospect, among others.

 “The 2024 Oil Block Licensing Bid Round is not merely a transactional opportunity, but a testament to Nigeria’s commitment to advancing a resilient and sustainable industry. This is why stakeholders in the industry should collaborate in other to harness the opportunities that promise not only to meet the immediate needs of the country’s growing economies but also to secure a sustainable future for the next generations for shared prosperity,” Komolafe urged.

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He explained that the recent Presidential Executive Orders issued in March aimed at improving the efficiency and attractiveness of Nigeria’s oil and gas sector, were generously targeted to incentivise oil and gas development and also introduced measures to balance the implementation of Nigerian Oil and Gas Industry Content Development Act, 2010, to ensure that oil and gas development is not hindered by local content bottlenecks.

The Executive Orders also include directives on reduction of contracting costs and timelines to enhance global competitiveness of our oil and gas industry and achieving higher rate of return on oil and gas investments.

This perhaps explains the reduction of signature bonus for this year’s edition. According to Komolafe, a review of Welligence Energy Analytics reports on Licensing round across the globe including Brazil, Guyana, Angola, Middle East, North Africa, SouthEast Asia etc, revealed that the era of huge front-loaded signature bonuses is over.

Arising from this study, he said, emphasis shifted from high signature to production bonus and commitment to work programme ahead of entry signature fees which has now been reduced to a token in order to vacate entry barriers in alignment with the agenda of President Bola Tinubu’s administration to shore up production output and attract more investors into the sector.

This, he said, is to serve as incentives to potential block winners as the savings from the reduction will enable a winner plough the extra into its capital expenditure and stimulate them to begin immediate exploration activities of blocks won.

He said: “The reduction in signature bonus was done after an extensive study which showed that Nigeria charged the highest signature bonus in the world. This, we realised does not allow for immediate operations of the well so won.”

Komolafe noted that with the stiff global competition in the sector, and the increasing challenge of raising funds for investment in fossil fuel due to the fast unfolding switch to greener energy, it is only reasonable to reduce such payments.

At the event, the Executive Director, Schlumberger, Nosa Omorodion noted that given the position and regulations of government through the NUPRC, it presents “an opportunity for NUPRC to demonstrate that Nigeria is ready for business.” He said integrity is important and ensuring that things are done according to the rules, adding that corporate governance and competency are key. He advised that the new oil bloc that would be placed should be published and made open for perspectives investors to see.

Similarly, the Gas and Commercial Director, Shell E&P Africa, Hans Nijkamp, said: “Shell has been in Nigeria since 1937 and we are ready to stay for a very long time,” Noting that the deep water is the company’s ‘playground’ for the future, Hans said Nigeria is currently on track saying that the fiscal regulatory framework makes it look like Nigeria is already in the future. He added that the company is determined to focus on oil and gas in the deepwater and taking the gas to the domestic market through the NLNG.

According to him, the PIA is a groundbreaking moment, as it has improved things significantly in the sector.  “The PIA and the Executive Order signed by Mr President together makes Nigeria more competitive,” he said.