From Uche Usim, Abuja
The Nigerian Upstream Petroleum Commission (NUPRC) has adopted a new strategy in acreage allocation, which automatically blocks any oil and gas company that performed poorly in previous lease contracts from accessing new jobs as stipulated in the new Petroleum Industry Act (PIA).
The acreage management system allows the issuing Authority (NUPRC) to specify a timeline during which investment must be accomplished on the allocated licence covering the assigned portion for the purposes of oil prospecting and exploration.
The Chief Executive of NUPRC, Gbenga Komolafe, in a statement on Saturday, stated that the new arrangement seeks to optimize value from acreage management and administration.
He added that qualification for new contracts would be based on scaling a holistic assessment of previous performance of all licenses and leases awarded before the PIA era.
“The assessment would seek to identify the areas of regulatory under performance in acreage management and administration leading to failure of licensees and lessees inability to carry out licence and lease performance obligations including acquisition of data, drilling of wells and maturing of identified leads and prospects within the licence or lease span”, Komolafe explained.
He listed the aspects of the new strategy to include review assignee performance and contributions to licences and lessees, review compliance performance in reporting milestones by licensees and lessees and the administration of regulatory consequence mechanisms, review loss allocation by licensees and lessees under the PIA, including, production, cost and revenue, and performance review of existing multi-client arrangements and streamlining on-going activities to the PIA.
“The assessment framework would 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 focused on OPLs, OMLs, Marginal Fields and Multi client arrangements. Evaluation is expected to cover; Compliance with environmental requirements and with work programme commitments, compliance with revenue payment obligations and reporting obligations, audit of operating systems and third-party provider activities and assessment of Assignee roles and performance obligations” he added.
Komolafe noted that in the new dispensation, there would be 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; improve oversight mechanism in line with the objective of the PIA and aspects of new strategy as well as develop 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 August 30, 2022”, he stated.