NUPRC Adopts New Strategy For Managing Acres, Leasing

In order to meet the goals outlined by the Petroleum Industry Act, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says it would take a fresh approach to the administration of licences and leases, particularly with regard to acreage allotment (PIA).

The new strategy will maximise value under the new acreage management and administration of allocation principles outlined in the PIA, according to the Chief Executive Officer (CEO) of NUPRC, Gbenga Komolafe.

“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 Komolafe, the committee aims to pinpoint the regulatory gaps in acreage management and administration that prevent licensees and lessees from fulfilling their commitments under licences and leases.

The commission would also look at other problems, including as data collection, well drilling, and the maturation of leads and prospects within the licence or lease period.

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

Another component of the new plan would be to examine how licensees and lessees allocated losses under the PIA.

These include simplifying ongoing efforts to the PIA and reviewing the performance of current multi-client arrangements in addition to production, cost, and revenue.

“The assessment framework will require all existing licences and lessees to undergo a performance assessment audit of the 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 the need for a team with representation from relevant departments to achieve performance schematic of existing licences and leases; identify oversight weakness, identify licencee and lessee centred failures in regulatory reporting requirements and other performance indices.

“Also in the new dispensation, there will be improved 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 Aug. 30.” the statement further quoted Komolafe as saying.