Joseph Bakare
The Federal Government would soon make public six new regulations that is expected to help harness the gains of the Petroleum Industry Act (PIA).
The regulations would set fresh modalities for oil and gas royalty, award of oil blocks, fees and rentals for the industry.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which disclosed this in Abuja explained that the new regulations being set on host community issues are coming in the face of energy transition and geo-political issues, which are ushering new dimensions to global economy.
The new regulations are Nigerian Upstream Fee and Rent Regulations, Petroleum Licensing Round Regulations, Domestic Gas Delivery Obligations Regulations, Nigeria Conversion Regulations, Nigeria Royalty Regulations and Nigeria Host Community (Commission) Regulations.
Minister of State for Petroleum Resources, Timipre Sylva, said at a stakeholders consultation on the draft regulations organised by NUPRC yesterday that there was need for innovative ways in the exploitation and exploration of fossil fuel in the country.
The Minister noted that only effective regulations could help the country harness the gains of the PIA. “If we must continue to be relevant at the global stage, we must in designing regulation put in focus how we can balance the energy base load for Nigeria so that we will not be left behind in the energy transition train, while still harnessing our rich natural hydrocarbon reserves.
“The assent to the PIA by Mr President signalled a new era in the oil and gas sector of the economy after almost two decades of unsuccessful efforts to have the law passed in the country. The enactment of the PIA is expected to open up opportunities in the oil and gas sector of the economy,” he said.
Chief Executive Officer of NUPRC, Gbenga Komolafe, noted the feared impact of energy transition, saying it remained critical for Nigeria to take advantage of the oil and gas supply gap resulting from the current developments in Russia and Ukraine.
Komolafe said: “This is deliberately so, because we are conscious of prioritising regulations to meet the timelines in the PIA. As such, this first phase of the stakeholders’ engagement will capture robust discussions around issues dealing with royalty, licensing rounds, fees and rentals, burning issues on implementation of host community fund in line with Section 235 of the PIA.”
According to him, there are burning issues on implementation of host community fund in line with Section 235 of the PIA as well as finalising the 2020 bid round through issuance of PPL in line with Section 94 (2) of the PIA.
Leader of Host Communities of Nigeria Producing Oil and Gas (HOSCON), Prof. Jasper Jumbo, at the event, asked government to amend PIA, especially as it relates to the host communities.
He noted that the section on board nominations is below par, adding, “we are talking of mutual co-existence and protection of critical installed national asset, that is why we as fathers and leaders in the region, are coming in to say that we must be carried along. There is an organised host communities body, which must be carried along in the implementation of the new governance code in the industry.
Chairman, Senate Committee on Host Communities, Senator Bio Barakuma, stated that the passage of PIA was the biggest event in the petroleum industry, having lingered for over two decades. He added that the delay in the passage threw the industry to a world of uncertainties.
He expressed joy that a full chapter in the PIA is totally dedicated to host communities to address myriads of issues affecting them and oil exploration in general. He reckoned that the PIA may not address the entire challenges of host communities as no act driven by human efforts is perfect, but described the Act as a good takeoff point.
He noted that the stakeholder event was key and timely to enable the legislature to make its inputs. “There are a few grey areas seeking clarification. We may need an amendment of the PIA to address those”, he said.