The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has constituted a committee to address issues bordering inactive crude oil blocks.

Kelechi Ofoegbu, Executive Commissioner, Economic Regulation and Strategic Planning, NUPRC, made this known at a consultation forum on Friday in Abuja.

The committee, he said, will adopt holistic measures to reverse the trend of the 23 failed oil blocks being managed by oil companies under the Production Sharing Contracts (PSC) with Nigerian National Petroleum Company (NNPC) Limited.

Mr Ofoegbu spoke to journalists at the end of the 4th Phase of its Consultation Forum with Stakeholders on regulations development, as mandated by Section 216 (4)(g) of the Petroleum Industry Act (PIA).

Recall that the latest Oil and Gas Industry Report for 2021, released by the Nigeria Extractive Industries Transparency Initiative (NEITI), revealed that 23 oil blocks managed by both international and local oil companies under crude oil PSC with NNPC Ltd failed to produce crude or were inactive.

PSC is an arrangement or contract where the contracted oil company undertakes to fund operations to explore, develop and produce petroleum within a concession area, under an Oil Prospecting Licence and for an agreed number of years.

“The percentage is correct but there are reasons behind that and also well known to us and also to the operators.

“The committee, which includes the NNPC Ltd will look at it holistically and come out with measures that would reverse that trend.

“So there are measures such as tackling crude theft, attracting further investments and all of that,” Mr Ofoegbu said.

Speaking on the sector’s overarching mandate, he said Nigeria was initially producing 1.2 million barrels per day (bpd), adding that the aim was to exit 2023 with 2 million bpd and in the mid to short term to do 4 million bpd.

“We are going to rely on the production from every available acreage,” he added. 

Section 216 of the PIA required that prior to bringing into existence any regulations we should seek opinions, consult and engage with the stakeholders.

He said in keeping with that provision, the NUPRC had been convening stakeholders, while the forum was the fourth edition with stakeholders.

“We looked at the draft Assignment Regulations, Assignment Regulations. Vocation Regulations, Development Contract Regulations, today we are looking at the Commercial Regulations.

“The aim of the consultation is basically to have support for what we are proposing and to also enrich the document and the process and ensure the outcome will stand the test of time,” Mr Ofoegbu said. 

According to him, the finalised draft would be sent to the federal ministry of justice for ratification and approval.

He said the aim was to improve commercial efficiency, reduce cost of production and promote profitability and ease of doing business. 

(NAN)