Improving Oil output: NUPRC investigates producers’ operations

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    Effective today, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, will invite exploration and production, E&P, companies to scrutinise their operational and commercial activities.

    The Commission Chief Executive, CCE, NUPRC, Gbenga Komolafe, in a statement yesterday, said the development became imperative given Nigeria’s declining oil production output, which fell below the one million mark in August.

    Komolafe was quoted as saying that the Commission is determined to take bold and revolutionary steps, using a non-kinetic approach to address the challenges of crude oil theft, improve national crude oil production, and save the economy from further decline.

    He said NUPRC is not an operator but has a statutory responsibility as a regulator, to probe into the situation and seek drastic solutions to the challenges, as the current situation has seriously affected the country’s economy, and also threatened the funding of the national budgets.

    The statement reads in part: “The Commission will do everything within its authority to challenge the narrative and halt further degeneration by ensuring transparency in hydrocarbon accounting.

    “One of the steps, in line with its technical and regulatory powers, is to probe into the operational and commercial activities of exploration and production companies operating within the country to ascertain the level of compliance with the terms and conditions in their operational contracts, as well as the challenges impeding expected deliveries.

    “The Commission will particularly be interested in the mode of operation of the companies in relation to the approvals as per their operational licences, the level of conformity with the technical provisions and production terms, their level of investments to enhance capacity utilisation, and the challenges they are facing, especially those contributing to the current unacceptable situation.

    “Beginning Wednesday September 28, the Commission will be engaging all the exploration and production companies individually to get to the root of the current situation as it believes strongly that there might be more fundamental issues in the industry affecting expected output and deliveries beyond the much touted issue of crude theft.

    “Already invitations have been extended to all the operators for the engagement during which they would be expected to present their work programme performance, acreage status, divestment plans (if any), field development plan (FDP) implementation status, upstream investment in the last five years, exploration activities including geophysical acquisition/processing/re-processing, leads and prospects maturation plans, and exploratory wells drilled in the last five years.”

    Komolafe explained that during the engagements, the E&P companies would be required to present their reserve status, life index, current reserves replacement ratio, RRR, and reserves growth strategy, RGS.

    They are also required to present status of joint venture/production sharing contract activities, including on-going facility projects, number of drilled wells, re-entry applications and approvals grafted in the past five years.

    Furthermore, they are to submit shut-in wells, their potential as well as reactivation plans and expected incremental volumes as well as technical production performance and production optimisation strategy, production profile for the last 10 years and status of production facilities, and also unit technical cost of production on field basis.

    “The Commission would also insist on knowing their gas development strategy, gas reserves commitment status and domestic gas delivery obligation performance; status of utilisation activities (if any); crude oil evacuation route and exported volumes from January this year, status of statutory payments as well as the challenges they are facing in the course of their operations.

    “The move by the Commission is to ensure transparency and accountability in the industry to guarantee effective operation and output delivery in the interest of the country’s economy and the benefit of the investors and industry operators.”

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