With wide interest from local and foreign investors in the seven deep offshore oil blocks put on offer during the 2022/2023 mini bid round, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced plans to conduct another mini bid round this year for additional 12 deep offshore blocks.
The Chief Executive Officer of NUPRC, Mr. Gbenga Komolafe, announced this on Thursday, at the commission’s Lagos Regional Office, during his presentation at a parley between him and members of the Oil Producers Trade Section (OPTS) and the Independent Petroleum Producers Group (IPPG).
He, however, stated that the ongoing mini bid round for the seven deep offshore blocks would be concluded this year.
The NUPRC engagement with the OPTS and IPPG was designed with a dual purpose of setting the tone for the Nigerian oil and gas upstream industry for 2024, as well as for the commission and the two associations to brainstorm on the NUPRC Regulatory Action Plan for 2024 and the near term.
The Regulatory Action Plan was issued by the NUPRC on January 1, 2024 to set a direction for the industry’s activities.
The NUPRC had in December, 2022 announced the beginning of the 2022/2023 mini bid round for the seven Deep Offshore blocks otherwise called Petroleum Prospecting Licences (PPLs).
The blocks covering an area of approximately 6,700 square kilometres in water depths ranging from 1,150metres to 3,100metres, are located off the city of Lagos rather than off the coast of the Niger Delta, further to the east where most of the country’s oil industry is concentrated.
The commission had listed the seven deep offshore open blocks as: PPL-300-DO, PPL-301-DO, PPL-302-DO, PPL-303-DO, PPL-304-DO, PPL-305-DO and PPL-306-DO.
Prior to the 2022/2023 mini bid round, Nigeria has had a major bid round for such assets about 17 years ago when in 2007, 45 blocks drawn from the inland Basins of Anambra, Benue and Chad; the Niger Delta Continental Shelf; Onshore Niger Delta and Deep Offshore were auctioned.
But Komolafe said the proposed 12 oil blocks to be auctioned during the upcoming mini bid round are located in the Continental Shelf and deep offshore.
“Let me seize this opportunity to announce that in line with the provisions of Section 73 of the PIA, the commission will conclude the 2022/2023 Mini-bid Round and as well, conduct a new bid round of 12 blocks located in the Continental Shelf and Deep Offshore.
“We hereby call on investors to participate in the bid round process that will commence soon for shared prosperity”, the NUPRC boss said.
Komolafe also disclosed that the commission would be engaging certified metering experts to conduct technical integrity audit of the metering facilities in the Nigerian upstream sector with a view to ensuring that metering facilities function at best practices and industry allowable limit of error.
In the weeks ahead, he revealed that the commission would be conducting a tour of upstream facilities in Nigeria as part of the commission’s oversight and monitoring functions.
Furthermore, Komolafe announced that the commission had equally put in place a robust framework to guide issues of divestment and implementation of the decommissioning and abandonment as well as the implementation of the Community Development Trust.
The regulator explained that the NUPRC Regulatory Action Plan for 2024 and the near term was intentionally issued on January 1, 2024 to set a direction for the industry’s activities.
According to him, the plan attracted significant publicity both in the local and international media, adding that the Regulatory Action Plan was not just a document but was designed as a signpost for the industry and stakeholders.
He told the operators under the aegis of OPTS and IPPG to be rest assured that the commission had considered possible implications and had designed planned responsibility to accommodate industry dynamics.
“Our goal is to enhance and facilitate a business environment that is resilient, adaptable and align with global best practices.
“As members of OPTS and IPPG, you will continue to play pivotal role in shaping the industry response to the evolving energy dynamics for the prosperity of our nation. The implementation of the Regulatory Action Plan will be a collaborative effort to our mutual benefits”, he stated.
To facilitate open communication between operators and relevant stakeholders, Komolafe said the commission would be establishing a dedicated platform for continuous engagement on the regulatory action plan.
He explained that the platform would provide all stakeholders, OPTS and IPPG, with opportunities to share insights, seek clarifications and actively participate in shaping the landscape for the collective good of all.
He extended his gratitude to his guests and partners for their unwavering commitment to the development of the country’s hydrocarbon resources as an industry and to work with the commission as a regulator for the realisation of the action plan.
“Let us therefore embrace our challenges with optimism knowing that our collaborative efforts will propel the Nigerian upstream petroleum industry to greater heights”, he concluded.
Responding, the Chairman of OPTS/Managing Director of Shell Nigeria, Mr Osagie Okunbor; and the Chairman of IPPG, Mr. Abdulrazaq Isa, expressed appreciation to the NUPRC boss and his team for engaging them to discuss a key regulatory policy as the Regulatory Action Plan.
Also at another meeting with marginal field awardees/owners at the same venue, Komolafe said the essence of the engagement with them was to hear their challenges and explore ways of helping them as part of the important stakeholders, especially as they are indigenous companies.
He said the commission was permitted to hand-hold them and encourage their growth in a manner that they could make their contribution to the hydrocarbon development in the country.
“So, this meeting with them is an attempt to organize a group of marginal field owners. If you listened to my speech, we have encouraged them to come together as an association so that it will be easy for us to encourage their development and relate with them.
“So, as a regulator, we are going to really help to foster that coming together,” he said.
Noting that the commission was not a financier, Komolafe acknowledged the funding issues facing the marginal field owners in the country.
To proactively solve that funding challenge, he said the NUPRC was putting together a Code of Conduct for the marginal field owners.
He also said the Code of Conduct was a regulatory tool and part of regulations that would help the companies to put proper governance around their businesses to make it easy for them to access funding.
He explained, “No financier will want to fund an organisation that is not seen as organised, that doesn’t have proper governance. Ordinarily, they should know this on their own, but as a regulator and as part of our ways to enable their businesses, we are really reaching out to make sure they resolve that, so that by the time we relate with maybe multilateral organisations and other funding entities, we help them to overcome the challenges they have.”
Peter Uzoho
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