• Tue. Sep 20th, 2022

Nigerian Upstream Commission targets June for drilling marginal fields – Arise News

ByChad J. Johnson

Apr 12, 2022

As Nigeria continues to struggle to increase its daily crude oil production, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe, said on Monday that the agency is targeting the first half of 2022 for fringe field winners to start. drilling in order to find their “first oil”.

He said this during a speech on ARISE News Morning Show on Monday.

The process that began in 2020 had been bogged down by bureaucratic challenges, meaning the actual oil drilling has yet to start more than a year after award certificates were officially presented to winners.

On May 30, 2021, the then Department of Petroleum Resources (DPR) announced the conclusion of the exercise, the first since 2003, with the presentation of letters to the winners in Abuja by the industry regulator.

The regulator had leased 57 marginal fields covering land, marsh and offshore, with 161 companies ultimately shortlisted to advance to the final stage from 591 entities that had applied for pre-qualification.

The leader of the DPR, which has now morphed into the NUPRC, Sarki Auwalu, at the time said the exercise was worth around $500 million in signing bonuses.

However, a number of winners had denounced the slow pace of events, pointing out that they had continued to pay heavy interest on borrowed loans to pay for transactions, despite the loans having been non-performing for over a year.

But Komolafe, while responding to a question regarding the 2020 marginal field price issue, said that although the commission inherited a difficult situation, it expects that by the first half (H1) of this year, all problems are solved.

“It is essential because one of our cardinal objectives is to ensure that national oil production is increased and, of course, we realize that the fields will really help to improve it.

“We tackled the problem head-on. It was really very difficult to manage the problem in the sense that the model used poses serious problems to settle the case quickly.

“But I want to assure Nigerians and indeed the winners that we have been able, as I speak, to try to bring the problem down to a manageable state and put in place a strategy to end the challenge.

“At the moment we have over 80% payment compliance. In fact, one of the challenges we’ve had is that even while training the SPVs, they still have difficulty working together due to the nature of the model used.

“But overall, I want to say that we as a commission will learn from this experience, and I want to assure Nigeria that the next marginal offer will certainly not be bogged down by these kinds of challenges that we have. encountered in managing fallout from the 2020 marginal field.

“Before the first half of the year, we want to see a situation where some of the winners will proceed with the development plan in the field. For the moment still, we have registered almost 90% of the co-beneficiaries forming their SPV and at this stage, it is the very comfortable stage where the commission can go ahead to issue petroleum prospecting licenses (PPL),” he explained.

Komolafe described the massive theft of crude oil in the Niger Delta as criminal and horrific, saying that while more than $2 billion worth of oil would have been illegally siphoned off in 2021, when added to the first quarter of 2022, they have may have climbed beyond $3 billion.

Recently, Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, speaking at the end of the 284th Monetary Policy Committee (MPC) meeting in Abuja, blamed the oil theft trend on the Nigeria’s inability to meet its oil needs. production quota.

Describing the situation as unprecedented, he said the event had a debilitating effect on government revenue and rising reserves, adding that world prices have risen and are being aggravated by the shortage in the supply of petroleum products.

For its part, the association of indigenous exploration and production companies, the Independent Petroleum Producers Group (IPPG), recently summed it up succinctly, describing the event as an “existential threat”.

IPPG Chairman, Mr. Abdulrasaq Isa, speaking at the 5th Nigeria International Energy Summit (NIES), had said that the challenge must be met before it finally kills the sector.

Additionally, a few weeks ago, Aiteo Eastern Exploration and Production Company (AEEPCO), operator of the Nembe Creek Trunk Line (NCTL) pipeline, threatened to vacate the facility due to relentless vandalism, sabotage and outright theft and simple.

In the same vein, THISDAY reported that a co-founder and former CEO of Seplat Energy Plc, Mr. Austin Avuru, recently called for a state of emergency in the Nigerian oil and gas sector, revealing that up to 80% of the oil pumped in the country, particularly in the east, is stolen.

Avuru’s comments came days after a businessman and chairman of Heirs Holdings, Mr Tony Elumelu, also lamented the deteriorating state of the industry, pointing out that around 95% of the oil production does not arrive at the terminal.

Last week, the General Overseer of the Redeemed Christian Church of God (RCCG), Rev. Enoch Adeboye, warned that Nigeria could go bankrupt if the trend is left unchecked.

He also raised concerns about the country’s economic future, warning that Nigeria’s debt-to-income ratio could pose a danger for decades to come.

Continuing, Komolafe said it was not the commission’s duty to secure government oil and gas assets, saying the organization does not “regulate” criminal activity.

“The commission does not regulate criminals, that is not the mandate of the agency. It doesn’t really extend to the treatment of criminals. We don’t have the abrasive or coercive mechanisms to rein in the criminals. Our mandate actually covers technical and commercial regulatory functions,” he explained.

Komolafe noted that anything that affects the petroleum sector affects the health of the entire nation, reiterating that upstream and downstream parts of the industry are currently facing challenges.

“What we are witnessing has reached a very alarming situation, a very horrible situation,” he lamented.

According to him, getting investors to invest their hard-earned money in the sector has been very difficult with the prevailing difficult conditions, including the theft of the commodity by saboteurs. “It is worrying because of the activities of these criminals,” he lamented.

According to rough estimates, the NUPRC had said that Nigeria lost more than 115,000 barrels per day (bpd) to oil theft and vandalism between January 2021 and February 2022.

Komolafe reiterated that the NUPRC had set up a panel to audit the activities of operators in the upstream sector to determine the true volume of oil lost due to the threat.

The director general of the commission further pushed back against insinuations that the steering committee headed by Timipre Sylva was slowing down work on the entry into force of the Petroleum Industry Law (PIA), saying that the collaboration had taken place without clashes.

Emmanuel Addeh in Abuja and Funmi Ogundare in Lagos