The government aims to tackle the challenges in the Public Service Commission (PSC) as it implements new regulations.Despite ongoing challenges like as theft and vandalism, Nigeria's oil production currently stands at a modest 1.3 million barrels per day. However, the Nigerian Upstream Regulatory Commission (NUPRC) has recently expressed optimism, stating that production is projected to increase to two million barrels per day by the conclusion of this year.
The commission further emphasized that, through a series of ongoing activities, the production is expected to reach a level of four million barrels per day in the medium term.
During a Stakeholders' Forum held in Abuja, industry participants convened for a week-long series of discussions on seven newly proposed regulations. Gbenga Komolafe, the Chief Executive of NUPRC, addressed the forum and highlighted ongoing efforts to address the obstacles impeding production from deep water assets.
According to Dr. Kelechi Ofoegbu, the Executive Commissioner of Economic Regulation and Planning, the productivity of assets managed by the Production Sharing Contract (PSC) in 2021 was just 23 percent. However, Dr. Ofoegbu emphasized that efforts are currently underway to promptly address the difficulties within the framework.
There is an existing committee that is dedicated to addressing the matter. The production rate in 2021 was approximately 23%, and both we and the operators are cognizant of the existing challenges that contributed to this outcome. Komolafe expressed the intention to adopt a comprehensive approach in order to devise strategies that can effectively counteract the aforementioned trend.
Regarding production, the speaker highlighted the objective of achieving a daily output of two million barrels by the end of this year, with a further aspiration of reaching four million barrels per day in the near to immediate future.
As per his statement, the nation would depend on production from all accessible land areas, whether through the Production Sharing Contracts (PSCs) or the Joint Ventures (JVs). This situation arises in the context of local refineries importing crude oil, while the Nigerian LNG Limited recently reported a significant decline in its output, attributing it to poor gas production from deep water sources, resulting in a reduction of almost 50 percent.
Nathaniel Oyatogun, the representative of the Oil Producer Trade Section of the Lagos Chamber of Commerce, emphasized the necessity of enhancing the regulatory framework in order to bolster investments and foster economic growth inside the country.
The speaker emphasized the necessity of a conducive regulatory environment that effectively translates the provisions outlined in the Petroleum Industry Act into practical implementation.
The NUPRC is putting forth a series of seven regulations, namely the Draft Upstream Commercial Operations Regulations, Draft Upstream Petroleum Code of Conduct and Compliance Regulations, Draft Upstream Petroleum Development Contract Administration Regulations, Draft Upstream Revocation of Licences and Lease Regulations, Draft Petroleum Assignment of Interest Regulations, Draft Nigerian Upstream Petroleum (Administrative Harmonization) Regulations, and Draft Amendment to the Nigerian Upstream Petroleum Host Communities Development Regulations 2022.
The Draft Assignment Regulations of 2023 are anticipated to enhance the existing guidelines on divestment of interest by transforming them into a formal regulation. This endeavor aims to enhance the efficacy of the regulations in aligning with present-day circumstances.
The proposed Draft Nigerian Upstream Petroleum (Administrative Harmonisation) Regulations 2023 aim to establish clear regulatory guidelines for the implementation of the dual regulatory system in the upstream sector. This system arises from the retention of licenses and leases granted under the Petroleum Act, which have not been converted under the Petroleum Industry Act (PIA).
The proposed amendment to the host community regulation aims to introduce changes to the current implementation of the host community regime. These amendments seek to streamline administrative procedures and address the regulatory challenges that have arisen since the establishment of the initial regulation one year ago.
The primary objective of the Draft Upstream Commercial Operations Regulations 2023 is to develop a comprehensive framework for the review and approval of Field Development Plans, as well as the yearly work programme and budget approvals.
The contract regulation, in contrast, is anticipated to establish the structure for the regulatory management of contracts pertaining to the development of petroleum resources (including joint development agreements, production sharing agreements, and service agreements) in the upstream petroleum sector.
The Draft Upstream Revocation of Licences and Lease Regulations establish the structure for effectively implementing the Revocation Provisions of the Act and addressing subsequent matters following revocation in a methodical manner that guarantees systematic handling.