Yemisi Izuora
The federal government has sought the understanding and continuous engagement of oil and gas industry operators to ensure timely approval of Field Development Plan, FDP.
Minister of State, Petroleum Resources, Ibe Kachikwu while giving the assurance said that every effort would be made to encourage investors by ensuring prompt approval of the FDP.
Kachikwu in his keynote address at the Society of Petroleum Engineers (SPE) Lagos section 61, technical symposium on Field Development Plan (FDP) approval process, noted that the FDP is one of the fundamental criteria in the development of upstream exploration and production projects in Nigeria.
The minister who was represented by Mr Johnson Awoyemi, the Senior Technical Adviser of the Ministry of Petroleum Resources, said that symposium put together by the association was not only apt but very timely.
He said that SPE serves a platform for promoting and disseminating technical knowledge and advice to government on policy initiatives regarding the development and production of oil and gas resources.
According to him, Government is ever ready to partner with any creativity on the part of SPE that will add value and enhance economic sustainability along the oil and gas value chain.
Kachikwu said that it is important that government acts quickly to evaluate and approve FDPs, thereby ensuring the momentum of investors does not dip.
He said that some of the main issues that have resulted in delay of approvals are the inadequacy or incompleteness of plans that do not address all the project development issues.
“Hence, as part of our 7 Big Wins, we initiated the Nigerian Gas Flare Commercialization Program (NGFCP) as a solution. The purpose of the NGFCP is to eliminate wastage of gas, thereby stimulating economic growth, driving investments and providing jobs in the nation through the use of widely available innovative technologies.
This initiative will provide an end-to-end solution that will positively impact the Nigerian economy. The Department of Petroleum Resources (DPR) will not approve any FDP, unless there is an end-to-end gas utilization solution in place,’’ he said.
He said that government deemed it tactful to initiate the NGFCP, which would provide multiple options eliminating bottlenecks associated with FDP’s approval.
He said that another issue is when the field would extend into neighbouring concessions or license areas and then unitisation of the asset becomes necessary.
“If we do not provide timely FDP approval, it will delayed production, revenue, profitability, economic development, job creations, growth and investments in the oil industry.
Therefore timely FDP Approval is a win-win for both the government and the investors. In a sense, FDP is the roadmap for the development of any asset in the oil and gas sector. To large degree, it defines the success or otherwise of the field. This is the document the regulator of our oil and gas industry,
DPR must approve before the commencement of activities in any oil field of our nation,’’ he said.
The minister said that in Nigeria, the enabling law that gives legal backing to FDP approval is the petroleum drilling and production regulation of 1969.
He said the law as amended for the petroleum inspectorate, procedure guide for the design and construction of oil and gas production facilities and numerous other guidelines developed in that regard by the DPR.
“These laws are made pursuant to the powers conferred on the Minister of Petroleum Resources under Section 9 of the petroleum Act (CAP 350) laws of the Federation of Nigeria, 1990.
The regulations put in statutory form –both the regulatory and operational details governing field exploration, development and production.
It also prescribes the various fees, rents and royalties that shall be payable when the field is put on production.
Furthermore, the laws of Nigeria prevent license holders from installing facilities or producing oil and gas without the
approval of the Minister of Petroleum Resources or its delegate, DPR,’’ Kachikwu added
The minister said that when considering whether to approve an FDP proposal, the DPR takes cognisance if the proposal meets government’s policy objectives.
He said that approval also includes the local content development and whether the methods proposed for the FDP are in accordance with good oilfield practices.
He said that in the evaluation process of FDP approvals, the government’s general target is to maximise the technical and commercial recovery of oil and gas resources and that government would also ensure the utilisation of natural gas in conformity with the domestic gas obligations before considering the approval of the FDP.
Mr Mordecai Ladan, the director, DPR in his presentation said that in moving forward the agency would try to fast track approval of the FDP provided the operators do the needful.
Ladan who was represented by Mr Babajide Fashina, Assistant Director, Operations, DPR said that the agency approves FDP procee is less than two weeks, provided operators submit their proposal timely.
According to him, early engagement between DPR and operators remain the most reliable way to fast rack prompt approval of FDP.
Doing the process efficiently by operators is one of the important aspects to enhanced approval processes.
“We are always open to provide guidance to operators on effective and efficient way to get FDP approval timely,’’ he said.
In his remark, Mr Temitope Oshutuyi, Chairman, SPE Lagos section 61 said that the topic is timely to address FDP challenges in the oil and gas sector.
Oshutuyi said that association is dedicated to technical dissemination of information in the industry and would continue to add values to its members companies.
“At the end of the session, we believed it would highlight steps to enable producing companies have their FDP approved on time”.