Sunday, August 7, 2022

NUPRC adopts new approach in acreage management, lease administration

Mr Komolafe said the commission will seek to identify the areas of regulatory underperformance in acreage management and administration.

• August 6, 2022

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says it will adopt a new approach in the administration of licences and leases, especially as it concerns acreage allocation, to attain the objectives set by the Petroleum Industry Act (PIA).

The Chief Executive Officer (CEO) of NUPRC, Gbenga Komolafe, said in a statement on Friday that the new approach would optimise value in the new acreage management and administration of allocation principles enunciated in the PIA.

“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 licences and leases awarded prior to the PIA is required,” he said.

According to Mr Komolafe, the commission will seek to identify the areas of regulatory underperformance in acreage management and administration, leading to failure of licensees and lessees inability to carry out licence and lease performance obligations.

The commission would also seek to identify other issues, including acquisition of data, drilling of wells and maturing of identified leads and prospects within the licence or lease span.

The CEO in a memo to senior management staff of the commission, also listed the aspects of the new strategy to include review assignee performance and contributions to licences and lessees and review compliance performance in reporting milestones by licensees and lessees and the administration of regulatory consequence mechanisms.

Other aspects of the new strategy would include reviewing loss allocation by licensees and lessees under the PIA.

These include production, cost and revenue, as well as performance review of existing multi-client arrangements and streamlining ongoing activities to the PIA.

“The assessment framework will 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.

“Others are audit of operation systems and third-party provider activities and assessment of assignee roles and performance obligations.”

“In the new dispensation, there will be a need for a team with representation from relevant departments to achieve performance schematic of existing licences and leases; identify oversight weakness, identify licensee and lessee centred failures in regulatory reporting requirements and other performance indices.

“Also in the new dispensation, there will be improved oversight mechanisms in line with the objective of the PIA and aspects of the new strategy as well as developing 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 Aug. 30.” The statement further quoted Mr Komolafe as saying. 


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