Oil & Energy
Upstream Regulatory Commission To Overhaul Oil Licencces, Leases
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.
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Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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