The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is adopting a more strategic approach in the administration of crude oil exploration licenses and leases in the country.
This is in line with the objective of the Petroleum Industry Act (PIA) to optimise value from acreage management and administration and the new acreage allocation principles enunciated in the law.
Chief Executive of the Commission, Gbenga Komolafe, who made this known yesterday said the assessment would seek to identify the areas of regulatory underperformance in acreage management and administration leading to the failure of licensees and lessees’ inability to carry out licence and lease performance obligations including the acquisition of data, drilling of wells and maturing of identified leads and prospects within the licence or lease span.
He said to position the Commission on a Performance Centred paradigm for acreage management, a new strategy of acreage allocation, management and administration based on a holistic assessment of the prior performance of all licenses and leases awarded prior to the PIA is required.
In a memo to senior management staff of the Commission, Komolafe listed the aspects of the new strategy to include review assignee performance and contributions to licences and lessees, review compliance performance in reporting milestones by licensees and lessees and the administration of regulatory consequence mechanisms.
He also listed reviewing loss allocation by licensees and lessees under the PIA, including, production, cost and revenue, and performance review of existing multi-client arrangements and streamlining on-going activities to the PIA.
The assessment framework would require all existing licences and lessees to undergo a performance assessment audit of operation of licences and leases based on a framework to be developed by Lease and focussed on OPLs, OMLs, Marginal Fields and Multi client arrangements. Evaluation is expected to cover the following:
Compliance with environmental requirements and with work programme commitments, compliance with revenue payment obligations and reporting obligations, audit of operation systems and third-party provider activities andassessment of Assignee roles and performance obligations
In the new dispensation, there would be need for a team with representation from relevant departments to achieve performance schematic of existing licences and leases; identify oversight weakness, identify licencee and lessee centred failures in regulatory reporting requirements and other performance indices.
It also include improving oversight mechanism in line with the objective of the PIA and aspects of new strategy as well as develop fresh Standard Operating Procedures (SOP) for acreage management and lease administration in line with the PIA.
The team, which will be made up of a member each from Exploration and Acreage Management: Development & Production; Health, Safety, Environment and Community; Economic Regulation and Strategic Planning and the Legal Secretary Departments, is expected to submit a final report by August 30, 2022.
TCN Assures Energy Delivery To Nigerian Homes
Nigerians have been assured of adequate and efficient supply of electricity to their homes.
The General Manager, Transmission Company of Nigeria (TCN), Maiwada Sarki Bello Paiko, gave the assurance during a media chat with newsmen at the dam site in Shiroro Hydro Electric Power station, Shiroro Local Government Area, Niger State, recently.
Paiko stated that since TCN took over the affairs of transmission, the company had done well in procuring power for onward delivery to consumers.
According to him, as a private organization, TCN would not compromise on standard, noting that the company was working 24 hours to ensure steady and adequate energy.
He said, “TCN has been working round the clock to fix the aging equipment in order to avoid disruption in the daily transmission of energy.
“The company in collaboration with the World Bank had constructed a new 132 KV from Zungeru power station switch yard to Tegina, new control rooms at Shiroro, replaced over aged equipment at Jebba transmission station, and upgraded Minna sub- station with additional 132/33 KV 100MVA transformer”.
He further disclosed that during the period under review, TCN has made landmark achievements by decommissioning, installing and commissioning new six 330KV current transformer on bus coupler at Jebba T/S in January, 2023, as well as new 330KV circuit breaker on Jebba-Kainji.
While noting that there is no business without challenges, Paiko enumerated some of the challenges confronting the organization to include insecurity along Shiroro-Kaduna 330KV Lines, Shiroro-Kamtapa 330KV line, Gwagwalada 330KV line, Shiroro-Tegina 132KV line, redial nature of Shiroro-Tegina-Kontagora-Yauri line, among others.
He hinted that plans were at advance stage for the construction of additional 330KV line from Shiroro-Kaduna and PLAN Turn -IN-TURN-OUT at Tegina T/S.
Paiko attributed the successes recorded during the period under review to the unflinching support of the President Bola Tinubu led federal government and the management of TCN in the provision of an enabling environment for officers to operate.
Crude Oil Theft: Illegal Connections Hit 4,800 – Kyari
Group Chief Executive Officer, Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has said there are over 4,800 illegal connections on crude oil pipelines in the Niger Delta region.
Kyari, who described oil theft and vandalism in the region as a calamity, warned that this could frustrate the projections of the Federal Government.
Speaking when he appeared before the Senate Committee on Appropriation on the proposed budget for 2024, in Abuja, Friday, Kyari said the daily oil production would depend greatly on the security situation in the oil rich region.
He said, “the situation we have in Niger Delta in terms of security is a calamity. We don’t have that anywhere in the world. To engage non-state actors as last resort as solution is abnormal. But we have to respond abnormally.
“You have over 4,800 illegal connections on our pipelines. That means, within every kilometer, you have an insertion. Even if you seal all the insertions, you can’t get what you want in terms of production.
“In the Niger Delta, people are coming from all parts of the country to do illegal refining. That’s why we engage locals to deal with it. We will contain this challenge. We are doing everything possible to restore sanity. What is happening is a colossal damage to the environment and the host communities”.
Kyari welcomed the projection of daily crude oil production of 1.78 million barrels at $77 per barrel of crude, explaining that OPEC restriction to a daily production of 1.5 million barrel does not affect condensates, which he said fetches Nigeria plenty of money.
According to him, Port Harcourt refineries would come on stream in December while Warri Refinery would resume production in first quarter of 2024, giving December 2024 as production target of the Kaduna Refinery.
Kyari disclosed that the entity would have liquidated as the company’s cash flow could no longer sustain the burden of the subsidy regime, but for the quick and bold intervention of President Bola Tinubu to terminate the fuel subsidy regime saying, “i will advise that we stick to the submission of Mr. President on the quota
“There is no way we will get crude oil less than $70. Once economies are growing, there will be sustained demands for crude oil in our country and other countries. The estimates supplied by Mr. President is realistic.
“When we say production, we mean total production of crude oil and condensates. So we combine condensates and crude oil as total marginal production. So we know our estimates is realistic. There is no curtailment on condensates from OPEC”.
Kyari further gave an update on the Turn Around Maintenance of the nation’s four refineries.
Hydrogen In The Limelight At COP28
The UN’s COP28 climate talks, a mega-conference running for two weeks, are organized around daily themes. The fifth day on Tuesday, last week, focused on energy and brought out much high-level discussion of hydrogen.
The high hopes for green hydrogen were apparent at last year’s COP27 summit in Egypt with a flurry of big project announcements. Those have faded from the news as few major projects have reached financial commitment.
Yet the seriousness of discussions in Dubai this week, pursued by top ministry officials and high-level executives, showed that the momentum toward green hydrogen continues to quietly build.
This year’s conference lacks the flashy announcements, but it is moving forward with putting the basic structures in place to support a future hydrogen economy.
COP28 is showing that, while a viable market for ‘green’ hydrogen still appears far from a ‘tipping point’, the ongoing activities of companies and governments is a growing force.
A ‘High-Level Ministerial-CEO Roundtable on Hydrogen’ convened on Tuesday, sponsored by the COP28 President’s Office, with two hours of talks that cumulatively felt like a hydrogen wave.
Ministers from numerous countries described their governments’ initiatives and financial support. An official from the US DOE spoke about $7bn for seven selected ‘hydrogen hubs’, also money for electrolysis development, and a hydrogen tax credit that can extend for up to 10 years at $3 per kilogram.
Then, top executives of some 15 companies, members of the Hydrogen Council, spoke of their already significant investments in the emerging sector.
Executives from Air Liquide, Air Products, Hy24, Masdar, Next Era Energy, OCI Global, Port of Rotterdam, Topsoe, Thyssenkrupp, and others, called for incentives and clear regulation to enable global trade in the energy-rich element.
These progress reports notwithstanding, the President’s roundtable made its most important statement with the announcement of two rather obscure initiatives: It featured the launch of a “Declaration of Intent on Mutual Recognition of Certification Schemes for Hydrogen and Derivatives”; it also introduced a new ISO methodology for GHG emissions assessment of hydrogen.
Thirty-nine countries have endorsed the Hydrogen Declaration of Intent to pursue mutual recognition of hydrogen certification schemes, according to COP28.
Later in the day, another roundtable focused on the basic tasks of putting the hydrogen structure together.
Part of the so-called Breakthrough Agenda that began with COP26 two years ago, it gathered representatives of World Bank, IEA, IRENA, the UN Industrial Development Organization (UNIDO), the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE), other major non-profits and some governments.
They considered needs in key areas, including standards and certification, demand creation, research and innovation, finance and investment. The bright spot, after the morning’s announcements, was standards and certifications.
“We’ve seen standards and certification really rise in the agenda, almost in a surprising way”, said Paul Durant, who is Head of Climate Innovation for the UK government. Mr. Durant chaired the roundtable meeting.
The subsequent discussion of demand creation indicated less certainty, where a huge gap between hydrogen and fossil fuel cost was considered.
“When it comes to demand creation, we are in the very beginning”, said Oleksiy Tatarenko, Senior Principal, Hydrogen Initiatives at Rocky Mountain Institute (RMI), whose large team is working specifically on demand creation.
He spoke of the need for combined policy interventions and market-based mechanisms to grow demand for hydrogen.
“We still have a massive challenge, even in the developed countries. Making an economic case, sector by sector, you have a gap in hydrogen competitiveness versus carbon fuels or other solutions.
“Today saw a big outcome for hydrogen… We are now putting into place concrete elements to ensure it will happen”, said Laurent Antoni, Executive Director, IPHE, who spoke at both roundtables.
His organization has advocated for years for the ISO methodology and helped to shepherd the declaration on certification schemes to agreement.
“We need to rely on robust regulations, which themselves have to rely on certification, the labelling of hydrogen.
“And within the certification schemes what matters, the main point, is carbon footprint”, he said.
He also stressed the importance of the new ISO method to ensure everyone uses precisely the same methodology to quantify the carbon footprint, to allow comparison across markets and borders.
It’s a key common piece needed in all countries’ regulations to facilitate a future hydrogen market. That’s a big breakthrough, he thinks.
Antoni, an electrochemist, won’t talk colours in regard to hydrogen.
“When speaking about a kind of hydrogen, what you’re really speaking about is the carbon footprint”, he said.
“And the carbon footprint of the hydrogen is regardless you of the primary energy and technology used to produce it.
“What matters for hydrogen is to use decarbonized hydrogen”, he said, adding that “It’s not a ‘silver bullet’, but without low-emission hydrogen, we won’t achieve our climate targets”.
By: Alan Mammoser
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