NUPRC Takes Action To Support Marginal Field Awardees In Field Development

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced that it is preparing a production-based loan initiative to help the licence holders of the 2020 Marginal Field Bid Round find the funding they require.

NUPRC said that it will assist the recipients in starting complete field development in preparation for first oil.

The interaction would be between the Commission, Petroleum Production Licence (PPL) Awardees, Exploration and Production (E&P) service providers, and Nigerian Banks, said Mr. Gbenga Komolafe, Commission Chief Executive, NUPRC in a release on Tuesday.

"It aims to establish platforms for strategic alliance/partnership between the awardees and the service providers for drilling and well re-entry services.

“The arrangement is to be offered on service fee recoverable by the service providers from production to be attached,” he said.

Komolafe stated that the commission has already decided to hold an E&P International Finance Road show for financiers, investment bankers, private equity, and multilateral institutional investors in Abuja in the upcoming weeks.

The goal of the programme, according to CCE, is to highlight the high-value quick win possibilities that investors may take advantage of in the ongoing National Gas Flare Commercialization Plan, the ongoing Mini-bid awards, and the recent PPL awards.

He said the commission has created a Corporate Governance Framework for upstream petroleum operations in order to lessen the difficulties caused by the initial corporate governance issues that surfaced prior to the implementation of the Petroleum Industry Act (2021).

“The framework is currently at an advanced stage of internal review and stakeholders engagements required for its finalisation.

“This is to enhance sustainability, environmental and corporate governance requirements and to facilitate capital attraction by investors for the optimal and efficient development of the PPLs and other assets,” he said.

He disclosed that in order to enable dynamic data collection, hasten the attainment of first oil, and improve early cash flow, the commission revised the existing Extended Well Test (EWT) Guideline.

With 16 enterprises submitting Field Development Plans (FDP), two starting the unitization process, six re-entries, and two having completed the EWT, he said that this technique had already produced positive outcomes.

Nonetheless, he said that the Commission was aware of the protracted debate among some of the awardees that was brought on by misunderstandings or arguments among shareholders.

“We are collaboratively engaging the parties and mediating to facilitate early closure and diligent progression toward achieving the expected regulatory milestones, including value creation and hitting first oil.

“Since the award of forty-seven (47) PPLs to solely Nigerian entities in June 2022, the commission has made concerted efforts within the stipulations of the law, to provide statutory guidance and support toward the progression of the assets to field development.

“Steps taken include the convocation of Regulatory Induction Programme for PPL awardees to enable them have the requisite understanding of the statutory protocols from the award to first oil."

He added that a decision has also been made to hold a week-long tripartite engagement in Lagos in 2022 for all grantees and initial asset owners, with roughly 30 businesses in attendance.

“During that event, both the awardees and former asset owners resolved all impediments to the smooth take over by the awardees and operation to first oil.

“That event set the stage for engagements on issues required to fulfil initial work programme obligations,” he added.

He claimed that the administration of royalties and taxes, data exchange protocols, and leasing regulations were among the topics that were presented and carefully discussed.

Other items included in Komolafe's list included the Field Development Plan under the PIA (2021), the Permits Procedures for Drilling and Re-entry Applications, Production Accounting, the Deployment of Infrastructure, and the Development of Host Communities.